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$150,000,000
FORM OF CREDIT AGREEMENT
AMONG
U-STORE-IT TRUST,
U-STORE-IT, L.P.,
AS BORROWER,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
XXXXXX BROTHERS INC.
AND
WACHOVIA CAPITAL MARKETS, LLC,
AS JOINT LEAD ARRANGERS
WACHOVIA CAPITAL MARKETS, LLC,
AS SYNDICATION AGENT
AND
XXXXXX COMMERCIAL PAPER INC.,
AS ADMINISTRATIVE AGENT
DATED AS OF OCTOBER __, 2004
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TABLE OF CONTENTS
Page
Section 1.DEFINITIONS................................................................1
1.1 Defined Terms......................................................1
1.2 Other Definitional Provisions.....................................24
Section 2.AMOUNT AND TERMS OF COMMITMENTS...........................................24
2.1 Commitments.......................................................24
2.2 Procedure for Borrowing...........................................25
2.3 Repayment of Loans; Evidence of Debt..............................25
2.4 Commitment Fees, etc..............................................26
2.5 Termination or Reduction of Commitments...........................26
2.6 Optional Prepayments..............................................26
2.7 Mandatory Prepayments.............................................27
2.8 Conversion and Continuation Options...............................27
2.9 Minimum Amounts and Maximum Number of Eurodollar Tranches.........27
2.10 Interest Rates and Payment Dates..................................28
2.11 Computation of Interest and Fees..................................28
2.12 Inability to Determine Interest Rate..............................28
2.13 Pro Rata Treatment and Payments...................................29
2.14 Requirements of Law...............................................30
2.15 Taxes.............................................................31
2.16 Indemnity.........................................................33
2.17 Illegality........................................................33
2.18 Change of Lending Office..........................................34
2.19 Extension of Termination Date.....................................34
2.20 Commitment Increases..............................................35
Section 3.LETTERS OF CREDIT.........................................................36
3.1 L/C Commitment....................................................36
3.2 Procedure for Issuance of Letter of Credit........................36
3.3 Fees and Other Charges............................................37
3.4 L/C Participations................................................37
3.5 Reimbursement Obligation of the Borrower..........................38
3.6 Obligations Absolute..............................................39
3.7 Letter of Credit Payments.........................................39
3.8 Applications......................................................40
Section 4.BORROWING BASE PROPERTIES.................................................40
4.1 Acceptance of Borrowing Base Properties...........................40
4.2 Release of Borrowing Base Properties..............................43
4.3 Frequency of Calculations of Borrowing Base.......................43
4.4 Appraisals Required by Governmental Authorities...................44
4.5 Recording of Mortgages............................................44
4.6 Status of Escrowed Documents......................................46
Page
Section 5.REPRESENTATIONS AND WARRANTIES............................................46
5.1 Financial Condition...............................................47
5.2 No Change.........................................................47
5.3 Corporate Existence; Compliance with Law..........................47
5.4 Corporate Power; Authorization; Enforceable Obligations...........48
5.5 No Legal Bar......................................................48
5.6 No Material Litigation............................................48
5.7 No Default........................................................49
5.8 Ownership of Property; Liens......................................49
5.9 Intellectual Property.............................................49
5.10 Taxes.............................................................49
5.11 Federal Regulations...............................................49
5.12 Labor Matters.....................................................49
5.13 ERISA.............................................................50
5.14 Investment Company Act; Other Regulations.........................50
5.15 Subsidiaries......................................................50
5.16 Use of Proceeds...................................................50
5.17 Environmental Matters.............................................51
5.18 Accuracy of Information, etc......................................52
5.19 Security Documents................................................52
5.20 Solvency..........................................................53
5.21 REIT Status; Borrower Tax Status; Listing.........................53
5.22 Regulation H......................................................53
Section 6.CONDITIONS PRECEDENT......................................................53
6.1 Conditions to Initial Extension of Credit.........................53
6.2 Conditions to Each Extension of Credit............................57
6.3 Conditions to Borrowing Base Properties...........................57
Section 7.AFFIRMATIVE COVENANTS.....................................................60
7.1 Financial Statements..............................................61
7.2 Certificates; Other Information...................................61
7.3 Payment of Obligations............................................63
7.4 Conduct of Business and Maintenance of Existence; Compliance......63
7.5 Maintenance of Property; Insurance................................63
7.6 Inspection of Property; Books and Records; Discussions............63
7.7 Notices...........................................................64
7.8 Environmental Laws................................................65
7.9 Interest Rate Protection..........................................65
7.10 Additional Collateral, etc........................................65
7.11 Further Assurances................................................66
7.12 Maintenance of Occupancy Rate.....................................66
Section 8.NEGATIVE COVENANTS........................................................67
8.1 Financial Condition Covenants.....................................67
8.2 Limitation on Indebtedness........................................67
8.3 Limitation on Liens...............................................68
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Page
8.4 Limitation on Fundamental Changes.................................69
8.5 Limitation on Disposition of Property.............................69
8.6 Limitation on Restricted Payments.................................70
8.7 Limitation on Investments.........................................71
8.8 Limitation on Transactions with Affiliates........................72
8.9 Limitation on Sales and Leasebacks................................72
8.10 Limitation on Changes in Fiscal Periods...........................72
8.11 Limitation on Negative Pledge Clauses.............................72
8.12 Limitation on Restrictions on Subsidiary Distributions............72
8.13 Limitation on Lines of Business...................................73
8.14 Limitation on Subject Property and Ground Leases..................73
8.15 Special Covenants Relating to the REIT............................73
8.16 Taxation of the Borrower..........................................73
8.17 Limitation on Hedge Agreements....................................74
Section 0.XXXXXX OF DEFAULT.........................................................74
Section 10.THE AGENTS...............................................................77
10.1 Appointment.......................................................77
10.2 Delegation of Duties..............................................77
10.3 Exculpatory Provisions............................................77
10.4 Reliance by Agents................................................77
10.5 Notice of Default.................................................78
10.6 Non-Reliance on Agents and Other Lenders..........................78
10.7 Indemnification...................................................79
10.8 Agent in Its Individual Capacity..................................79
10.9 Successor Administrative Agent....................................79
10.10 Authorization to Release Liens and Guarantees.....................80
10.11 The Arrangers; the Syndication Agent..............................80
Section 11.MISCELLANEOUS............................................................80
11.1 Amendments and Waivers............................................80
11.2 Notices...........................................................81
11.3 No Waiver; Cumulative Remedies....................................83
11.4 Survival of Representations and Warranties........................84
11.5 Payment of Expenses...............................................84
11.6 Successors and Assigns; Participations and Assignments............85
11.7 Adjustments; Set-off..............................................88
11.8 Counterparts......................................................89
11.9 Severability......................................................89
11.10 Integration.......................................................89
11.11 GOVERNING LAW.....................................................89
11.12 Submission To Jurisdiction; Waivers...............................89
11.13 Acknowledgments...................................................90
11.14 Confidentiality...................................................90
11.15 Release of Collateral and Guarantee Obligations...................91
11.16 Accounting Changes................................................91
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11.17 Delivery of Lender Addenda........................................92
11.18 WAIVERS OF JURY TRIAL.............................................92
iv
ANNEXES:
A Pricing Grid
SCHEDULES:
1.1A Initial Borrowing Base Properties
1.1B Real Property
4.1(b) Limited Review Criteria
5.4 Consents, Authorizations, Filings and Notices
5.15 Subsidiaries
5.19(a)-1 UCC Filing Jurisdictions
5.19(a)-2 UCC Financing Statements to Remain on File
5.19(a)-3 UCC Financing Statements to be Terminated
5.19(b) Mortgage Filing Jurisdictions
6.1(c) Terminated Indebtedness
8.2(d) Existing Indebtedness
8.2(f) Exceptions to Non-Recourse
8.3(f) Existing Liens
EXHIBITS:
A Form of Guarantee and Collateral Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
D Form of Mortgage
E Form of Assignment and Acceptance
F Form of Legal Opinion of Xxxxx & Xxxxxxx L.L.P.
G Form of Note
H Form of Exemption Certificate
I Form of Lender Addendum
J Form of Borrowing Notice
K-1 Form of New Lender Supplement
K-2 Form of Commitment Increase Supplement
L Form of Borrowing Base Certificate
M Form of Borrowing Base Property Officer's Certificate
N Form of Escrow Agreement
O Form of Environmental Indemnity Agreement
CREDIT AGREEMENT, dated as of October __, 2004, among
U-STORE-IT TRUST, a Maryland real estate investment trust (the "REIT"),
U-STORE-IT, L.P., a Delaware limited partnership (the "Borrower"), the several
banks and other financial institutions or entities from time to time parties to
this Agreement (the "Lenders"), XXXXXX BROTHERS INC. and WACHOVIA CAPITAL
MARKETS, LLC, as joint advisors, joint lead arrangers and joint bookrunners
(collectively, in such capacity, the "Arrangers"), WACHOVIA CAPITAL MARKETS,
LLC, as syndication agent (in such capacity, the "Syndication Agent"), and
XXXXXX COMMERCIAL PAPER INC., as administrative agent (in such capacity, the
"Administrative Agent").
W I T N E S S E T H:
WHEREAS, the existing equity holders (the "Existing Equity
Holders") of the Borrower have formed the REIT and contributed substantially all
of the outstanding equity interests of the Borrower held by the Existing Equity
Holders to the REIT in a series of one or more transactions (the
"Restructuring") and the remaining partnership interests are owned by the
members of the Permitted Investors;
WHEREAS, the Borrower and its Subsidiaries intend to obtain
collateralized mortgage-backed security financing of certain of their real
property with gross proceeds equal to approximately $270,000,000 (the "CMBS
Financing");
WHEREAS, the shares of common stock of the REIT will be
offered pursuant to an initial public offering (the "IPO");
WHEREAS, in connection with the Restructuring, the CMBS
Financing and the IPO, the Borrower requested that the Lenders make available a
revolving credit facility in an aggregate amount equal to $150,000,000; and
WHEREAS, the Lenders are willing to make such credit
facilities available upon and subject to the terms and conditions hereinafter
set forth;
NOW, THEREFORE, in consideration of the premises and the
agreements hereinafter set forth, the parties hereto hereby agree as follows:
Section 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms listed
in this Section 1.1 shall have the respective meanings set forth in this Section
1.1.
"Acquisition Price": with respect to any Subject Property, the
purchase price paid by the Borrower or any of its Subsidiaries for such Property
less closing costs and any amounts paid by the Borrower or such Subsidiary as a
purchase price adjustment, to be held in escrow, to be retained as a contingency
reserve, or other similar amounts.
"Adjusted Asset Value": with respect to any Subject Property,
on any date of determination, (i) with respect to any Subject Property owned in
fee simple or leased by the REIT or any of its Subsidiaries for more than two
full fiscal quarters ended prior to such date of
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determination and for which financial statements are available, an amount equal
to (a) the Net Operating Income of such Subject Property for the two full fiscal
quarters of the Borrower most recently ended for which financial statements are
available multiplied by two divided by (b) the Capitalization Rate and (ii)
otherwise, an amount equal to 90% of the Acquisition Price of such Property,
provided that, if an Appraisal has been obtained with respect to such Subject
Property, then the Adjusted Asset Value shall be an amount equal to the lesser
of (x) the Appraised Value of such Property and (y) the value determined
pursuant to the preceding clause (i) or (ii), as applicable. Notwithstanding the
foregoing, the Adjusted Asset Value for any Lease-Up Property shall be an amount
equal to 90% of the Acquisition Price of such Property.
"Adjusted EBITDA": for any period, Consolidated EBITDA for
such period less Reserves for Capital Expenditures for all Subject Properties
for such period.
"Adjusted Total Revenue": for any period, an amount equal to
(i) the total revenue of the Borrower and its Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP, minus (ii) the
aggregate amount of total revenue of all the Excluded Financing Subsidiaries for
such period.
"Adjustment Date": as defined in the Pricing Grid.
"Administrative Agent": as defined in the preamble hereto.
"Affiliate": as to any Person, any other Person that, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a Person means
the power, directly or indirectly, either to (a) vote 10% or more of the
securities having ordinary voting power for the election of directors (or
persons performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"Agents": the collective reference to the Syndication Agent
and the Administrative Agent.
"Aggregate Exposure": with respect to any Lender at any time,
an amount equal to the amount of such Lender's Commitment then in effect or, if
the Commitments have been terminated, the amount of such Lender's Extensions of
Credit then outstanding.
"Aggregate Exposure Percentage": with respect to any Lender at
any time, the ratio (expressed as a percentage) of such Lender's Aggregate
Exposure at such time to the sum of the Aggregate Exposures of all Lenders at
such time.
"Agreement": this Credit Agreement, as amended, supplemented
or otherwise modified from time to time.
"Anticipated Mortgage Payment": for any period of
determination, an amount equal to the annual principal and interest payment
sufficient to amortize in full during a 30-year period an amount equal to the
average daily aggregate Total Extensions of Credit during such period,
calculated using an interest rate equal to the greater of (i) the yield on a
10-year United
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States Treasury Note at such time as determined by the Administrative Agent plus
1.50% or (ii) 8.5%.
"Applicable Margin": for each Type of Loan, the rate per annum
set forth under the relevant column heading below:
Base Rate Eurodollar
Loans Loans
--------- ----------
0.75% 1.75%
; provided, that on and after the first Adjustment Date occurring after the
completion of two full fiscal quarters of the Borrower after the Closing Date,
the Applicable Margin will be determined pursuant to the Pricing Grid.
"Applicable Reserve Amount": $0.15.
"Application": an application, in such form as the relevant
Issuing Lender may specify from time to time, requesting such Issuing Lender to
issue a Letter of Credit.
"Appraisal": with respect to any Subject Property, an
appraisal commissioned by and addressed to the Administrative Agent, conforming
with the Uniform Standards of Professional Appraisal Practice as defined by The
Appraisal Foundation and in form and substance reasonably acceptable to the
Administrative Agent, prepared by a professional appraiser acceptable to the
Administrative Agent, having at least the minimum qualifications required by any
Governmental Authority governing the Administrative Agent and the Lenders,
including FIRREA, and determining the "as is" market value of such Property in
its current condition as of such date as between a willing buyer and a willing
seller.
"Appraised Value": with respect to any Subject Property, the
"as is" market value of such Property as reflected in the most recent Appraisal
of such Property.
"Asset Value": with respect to any Subject Property, on any
date of determination, (i) with respect to any Subject Property owned by the
REIT or any of its Subsidiaries for more than two full fiscal quarters ended
prior to such date of determination and for which financial statements are
available, an amount equal to (a) the Adjusted EBITDA of such Subject Property
for the two full fiscal quarters of the Borrower most recently ended for which
financial statements are available multiplied by two divided by (b) the
Capitalization Rate and (ii) otherwise, an amount equal to 90% of the
Acquisition Price of such Property. Notwithstanding the foregoing, the Asset
Value for any Lease-Up Property shall be an amount equal to 90% of the
Acquisition Price of such Property.
"Arrangers": as defined in the preamble hereto.
"Assignee": as defined in Section 11.6(c).
"Assignor": as defined in Section 11.6(c).
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"Available Commitment": with respect to any Lender at any
time, an amount equal to the excess, if any, of (a) such Lender's Commitment
then in effect over (b) such Lender's Extensions of Credit then outstanding.
"Base Rate": for any day, a rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate
in effect on such day and (b) the Federal Funds Effective Rate in effect on such
day plus 1/2 of 1%. For purposes hereof: "Prime Rate" shall mean the prime
lending rate as set forth on the British Banking Association Telerate Page 5 (or
such other comparable publicly available page as may, in the reasonable opinion
of the Administrative Agent after notice to the Borrower, replace such page for
the purpose of displaying such rate if such rate no longer appears on the
British Bankers Association Telerate page 5), as in effect from time to time.
The Prime Rate is a reference rate and does not necessarily represent the lowest
or best rate actually available. Any change in the Base Rate due to a change in
the Prime Rate or the Federal Funds Effective Rate shall be effective as of the
opening of business on the effective day of such change in the Prime Rate or the
Federal Funds Effective Rate, respectively.
"Base Rate Loans": Loans for which the applicable rate of
interest is based upon the Base Rate.
"Benefitted Lender": as defined in Section 11.7.
"Board": the Board of Governors of the Federal Reserve System
of the United States (or any successor).
"Borrower": as defined in the preamble hereto.
"Borrowing Base": on any date of determination, an amount
equal to the lesser of:
(i) (x) the sum of the Borrowing Base Values of the Borrowing
Base Properties for such date as set forth in the most recent Borrowing
Base Report delivered by the Borrower pursuant to Section 4.2(b),
Section 6.1(s), Section 6.3(h) or Section 7.2(f) multiplied by (y)
0.60, provided that, the Borrowing Base Value of all Lease-Up
Properties may not exceed 10% of the Borrowing Base and any excess of
such amounts shall be excluded when determining the Borrowing Base; and
(ii) the maximum amount necessary to cause the ratio of (x)
the Net Operating Income for all Borrowing Base Properties for the
period of two consecutive fiscal quarters of the REIT most recently
ended for which financial statements are available multiplied by two to
(y) the Anticipated Mortgage Payment for such period to be equal to
1.50 to 1.00.
"Borrowing Base Leverage Ratio": on any date of determination,
the ratio of (a) the Total Extensions of Credit on such date to (b) the sum of
the Borrowing Base Values of the Borrowing Base Properties for such date as set
forth in the most recent Borrowing Base Report delivered by the Borrower
pursuant to Section 4.2(b), Section 6.1(s), Section 6.3(h) or Section 7.2(f).
5
"Borrowing Base Property": (a) each Subject Property owned in
fee simple or leased by a Loan Party and listed on Schedule 1.1A on the Closing
Date and (b) each Subject Property owned in fee simple or leased by a Loan Party
and (i) which the Administrative Agent and, to the extent required, the Required
Lenders have agreed to include in the calculation of the Borrowing Base pursuant
to Section 4.1 and (ii) with respect to which the Administrative Agent has
received all documents required to be executed and delivered pursuant to Section
4.1 and Section 6.3.
"Borrowing Base Report": a report substantially in the form of
Exhibit L, executed and certified by the chief financial officer or the
controller of the Borrower, setting forth the calculations required to establish
the Borrowing Base Value for each Borrowing Base Property and the Borrowing Base
for all Borrowing Base Properties, with supporting detail reasonably
satisfactory to the Administrative Agent.
"Borrowing Base Value": with respect to each Borrowing Base
Property, on any date of determination, (i) if such Borrowing Base Property has
been owned in fee simple or leased by any Loan Party for more than two full
fiscal quarters ended prior to such date of determination and financial
statements are available for such period, an amount equal to (a) the Net
Operating Income of such Borrowing Base Property for the two full fiscal
quarters of the Borrower most recently ended for which financial statements are
available multiplied by two divided by (b) the Capitalization Rate, and (ii)
otherwise, an amount equal to 90% of the Acquisition Price of such Borrowing
Base Property, provided that, if an Appraisal has been obtained with respect to
such Borrowing Base Property, then the Borrowing Base Value shall be an amount
equal to the lesser of (x) the Appraised Value of such Property and (y) the
value determined pursuant to the preceding clause (i) or (ii), as applicable.
Notwithstanding the foregoing, (1) the Borrowing Base Value for any Lease-Up
Property shall be an amount equal to 90% of the Acquisition Price of such
Property and (2) the Borrowing Base Value of any of the following types of
Subject Property shall be $0:
(A) Subject Property not owned in fee simple by a Loan Party,
unless a Loan Party has a leasehold interest in such Property and
the Administrative Agent has approved the applicable lease in
writing, provided that, there may not be more than five Subject
Properties leased by the Loan Parties included in the determination
of the Borrowing Base at any one time;
(B) Subject Property, or any interest of a Loan Party therein,
subject to a Lien (other than as permitted by Sections 8.3(b)
through (e)) or a negative pledge clause;
(C) with respect to any Subject Property owned or leased by a
Subsidiary Guarantor, the Borrower's direct or indirect ownership
interest of such Subsidiary Guarantor is subject to a Lien (other
than as permitted by Sections 8.3(b) through (e)) or a negative
pledge clause;
(D) Subject Property with respect to which any Loan Party is
prohibited from taking the following actions without the consent of
any Person: (I) creating Liens on such Property as security for
Indebtedness of such Loan Party and (II) the sale, transfer or other
Disposition of such Property;
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(E) Subject Property (other than a Lease-Up Property) on any
date of determination, the Occupancy Rate of which is less than 50%
on such date;
(F) Business Park Properties representing aggregate leaseable
square footage in excess of 5% of the aggregate leaseable square
footage of all Borrowing Base Properties;
(G) Subject Property subject to structural defects, title
defects, environmental conditions or other adverse matters which
materially and adversely affect the profitable operation of such
Property as determined by the Administrative Agent in its sole
discretion;
(H) Subject Property, at any time after the 90th day following
the Recordation Date, for which the Administrative Agent does not
have a valid and perfected first priority Lien on such Property and
any Collateral relating to such Property;
(I) Subject Property with respect to which a Default under the
related Mortgage has occurred and is continuing; and
(J) Subject Property designated by the Borrower as having a
Borrowing Base Value of $0, provided that, the Borrower may rescind
such designation upon written notice to the Administrative Agent.
"Borrowing Date": any Business Day specified by the Borrower
as a date on which the Borrower requests the Lenders to make Loans hereunder.
"Borrowing Notice": with respect to any request for borrowing
of Loans hereunder, a notice from the Borrower, substantially in the form of,
and containing the information prescribed by, Exhibit J, delivered to the
Administrative Agent.
"Business Day": (a) for all purposes other than as covered by
clause (b) below, a day other than a Saturday, Sunday or other day on which
commercial banks in
New York City are authorized or required by law to close and
(b) with respect to all notices and determinations in connection with, and
payments of principal and interest on, Eurodollar Loans, any day which is a
Business Day described in clause (a) and which is also a day for trading by and
between banks in Dollar deposits in the interbank eurodollar market.
"Business Park Property": a business park owned and operated
by the Borrower or any of its Subsidiaries immediately adjacent to a Storage
Property.
"Capital Expenditures": for any period, with respect to any
Person, the aggregate of all expenditures by such Person for the acquisition or
leasing (pursuant to a capital lease) of fixed or capital assets or additions to
equipment (including replacements, capitalized repairs and improvements during
such period) which are required to be capitalized under GAAP on a balance sheet
of such Person.
"Capital Lease Obligations": with respect to any Person, the
obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right
7
to use) real or personal property, or a combination thereof, which obligations
are required to be classified and accounted for as capital leases on a balance
sheet of such Person under GAAP; and, for the purposes of this Agreement, the
amount of such obligations at any time shall be the capitalized amount thereof
at such time determined in accordance with GAAP.
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.
"Capitalization Rate": 8.50%.
"Cash Equivalents": (a) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States government or issued by
any agency thereof and backed by the full faith and credit of the United States,
in each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of six months or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States of America or any state thereof having combined
capital and surplus of not less than $500,000,000; (c) commercial paper of an
issuer rated at least A-2 by Standard & Poor's Ratings Services ("S&P") or P-2
by Xxxxx'x Investors Service, Inc. ("Moody's"), or carrying an equivalent rating
by a nationally recognized rating agency, if both of the two named rating
agencies cease publishing ratings of commercial paper issuers generally, and
maturing within six months from the date of acquisition; (d) repurchase
obligations of any Lender or of any commercial bank satisfying the requirements
of clause (b) of this definition, having a term of not more than 30 days with
respect to securities issued or fully guaranteed or insured by the United States
government; (e) securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P or A by Moody's; (f) securities with maturities of six months or less
from the date of acquisition backed by standby letters of credit issued by any
Lender or any commercial bank satisfying the requirements of clause (b) of this
definition; and (g) shares of money market mutual or similar funds which invest
exclusively in assets satisfying the requirements of clauses (a) through (f) of
this definition.
"Change of Control": the occurrence of any of the following
events: (a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act), shall become, or obtain rights (whether by means
or warrants, options or otherwise) to become, the "beneficial owner" (as defined
in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of
more than 25% of the outstanding common stock of the REIT; (b) the board of
directors of the REIT shall cease to consist of a majority of Continuing
Directors; or (c) the REIT shall cease to own and control, of record and
beneficially, directly, 75% of each class of outstanding Capital Stock of the
Borrower free and clear of all Liens (except Liens created by the Guarantee and
Collateral Agreement).
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"Closing Date": the date on which the conditions precedent set
forth in Section 6.1 shall have been satisfied, which date shall be not later
than October __, 2004.
"CMBS Financing": as defined in the recitals.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral": all Property of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by any Security
Document.
"Commitment": as to any Lender, the obligation of such Lender
to make Loans and participate in Letters of Credit, in an aggregate principal
and/or face amount not to exceed the amount set forth under the heading
"Commitment" opposite such Lender's name on Schedule 1 to the Lender Addendum
delivered by such Lender, or, as the case may be, in the Assignment and
Acceptance pursuant to which such Lender became a party hereto, as the same may
be changed from time to time pursuant to the terms hereof. The original
aggregate amount of the Total Commitments is $150,000,000.
"Commitment Fee Rate": 0.25% per annum; provided, that on and
after the first Adjustment Date occurring after the completion of two full
fiscal quarters of the Borrower after the Closing Date, the Commitment Fee Rate
will be as determined pursuant to the Pricing Grid.
"Commitment Increase Notice": as defined in Section 2.20(a).
"Commitment Percentage": as to any Lender at any time, the
percentage which such Lender's Commitment then constitutes of the Total
Commitments (or, at any time after the Commitments shall have expired or
terminated, the percentage which the aggregate amount of such Lender's
Extensions of Credit then outstanding constitutes of the Total Extensions of
Credit then outstanding).
"Commitment Period": the period from and including the Closing
Date to the Termination Date.
"Commonly Controlled Entity": an entity, whether or not
incorporated, that is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group that includes the Borrower and
that is treated as a single employer under Section 414 of the Code.
"Compliance Certificate": a certificate duly executed by a
Responsible Officer, substantially in the form of Exhibit B.
"Confidential Information Memorandum": a collective reference
to the marketing materials furnished to the initial Lenders in connection with
the syndication of the Facility.
"Consolidated Adjusted Asset Value": on any date of
determination, the sum (without duplication) of (a) the aggregate Adjusted Asset
Value of all Subject Properties on such date plus (b) the book value (determined
in accordance with GAAP) of all other tangible assets of the REIT and its
Subsidiaries on such date, provided that, (x) the portion of the Consolidated
9
Adjusted Asset Value attributable to clause (b) above shall not exceed 5% of the
Consolidated Adjusted Asset Value and (y) the portion of the Consolidated
Adjusted Asset Value attributable to Lease-Up Properties shall not exceed 10% of
the Consolidated Adjusted Asset Value and any excess of such amounts shall be
excluded when determining the Consolidated Adjusted Asset Value.
"Consolidated EBITDA": for any period, Consolidated Net Income
of the REIT and its Subsidiaries for such period plus, without duplication and
to the extent reflected as a charge in the statement of such Consolidated Net
Income for such period, the sum of (a) income tax expense, (b) interest expense
of the REIT and its Subsidiaries, amortization or writeoff of debt discount and
debt issuance costs and commissions, discounts and other fees and charges
associated with Indebtedness, (c) depreciation and amortization expense, (d)
amortization of intangibles (including, but not limited to, goodwill) and
organization costs, (e) any extraordinary, unusual or non-recurring non-cash
expenses or losses (including, whether or not otherwise includable as a separate
item in the statement of such Consolidated Net Income for such period, losses on
sales of assets outside of the ordinary course of business), and (f) any other
non-cash charges, and minus, to the extent included in the statement of such
Consolidated Net Income for such period, the sum of (a) interest income (except
to the extent deducted in determining such Consolidated Net Income), (b) any
extraordinary, unusual or non-recurring income or gains (including, whether or
not otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, gains on the sales of assets outside of
the ordinary course of business), (c) any other non-cash income and (d) any cash
payments made during such period in respect of items described in clause (e)
above subsequent to the fiscal quarter in which the relevant non-cash expenses
or losses were reflected as a charge in the statement of Consolidated Net
Income, all as determined on a consolidated basis.
"Consolidated Fixed Charge Coverage Ratio": for any period,
the ratio of (a) Adjusted EBITDA for such period to (b) Consolidated Fixed
Charges for such period.
"Consolidated Fixed Charges": for any period, the sum (without
duplication) of (a) Consolidated Interest Expense for such period, (b) all
regularly scheduled payments made during such period on account of principal of
Indebtedness of the REIT or any of its Subsidiaries, other than balloon
principal, bullet or similar principal payments which repays in full such
Indebtedness, and (c) the REIT's and its Subsidiaries' pro-rata share of all
expenses and payments referred to in the preceding clauses (a) and (b) of any
unconsolidated Person in which they have an equity interest.
"Consolidated Interest Coverage Ratio": for any period, the
ratio of (a) Adjusted EBITDA for such period to (b) Consolidated Interest
Expense for such period.
"Consolidated Interest Expense": for any period, the total
interest expense of the REIT and its Subsidiaries (including that attributable
to Capital Lease Obligations and any capitalized interest expense) for such
period with respect to all outstanding Indebtedness of the REIT and its
Subsidiaries (including, without limitation, all commissions, discounts and
other fees and charges owed by the REIT and its Subsidiaries with respect to
letters of credit, bankers' acceptance financing and net costs of the REIT and
its Subsidiaries under Hedge Agreements in respect of interest rates to the
extent such net costs are allocable to such period in accordance
10
with GAAP, plus the REIT's and its Subsidiaries' pro-rata share of all such
expenses of any unconsolidated Person in which they have an equity interest.
"Consolidated Leverage Ratio": on any date of determination,
the ratio of (a) Consolidated Total Debt on such day to (b) Consolidated
Adjusted Asset Value in effect on such day.
"Consolidated Net Income": of any Person for any period, the
consolidated net income (or loss) of such Person and its Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP; provided,
that in calculating Consolidated Net Income of the REIT and its consolidated
Subsidiaries for any period, there shall be excluded (a) the income (or deficit)
of any Person accrued prior to the date it becomes a Subsidiary of the REIT or
is merged into or consolidated with the REIT or any of its Subsidiaries, (b) the
income (or deficit) of any Person (other than a Subsidiary of the Borrower) in
which the REIT or any of its Subsidiaries has an ownership interest, except to
the extent that any such income is actually received by the REIT or such
Subsidiary in the form of dividends or similar distributions and (c) the
undistributed earnings of any Subsidiary of the REIT to the extent that the
declaration or payment of dividends or similar distributions by such Subsidiary
is not at the time permitted by the terms of any Contractual Obligation (other
than under any Loan Document) or Requirement of Law applicable to such
Subsidiary.
"Consolidated Total Asset Value": on any date of
determination, the sum (without duplication) of (a) the aggregate Asset Value of
all Subject Properties on such date plus (b) the book value (determined in
accordance with GAAP) of all other tangible assets of the REIT and its
Subsidiaries on such date, provided that, (x) the portion of the Consolidated
Total Asset Value attributable to clause (b) above shall not exceed 5% of the
Consolidated Total Asset Value and (y) the portion of the Consolidated Total
Asset Value attributable to Lease-Up Properties shall not exceed 10% of the
Consolidated Total Asset Value and any excess of such amounts shall be excluded
when determining the Consolidated Total Asset Value.
"Consolidated Total Debt": at any date, the aggregate
principal amount of all Indebtedness of the REIT and its Subsidiaries at such
date, determined on a consolidated basis in accordance with GAAP.
"Construction Budget": the fully-budgeted costs for the
acquisition and construction of a given piece of real property (including the
cost of acquiring such piece of real property) as reasonably determined by the
Borrower in good faith.
"Continuing Directors": the directors of the REIT on the
Closing Date, after giving effect to the IPO and the other transactions
contemplated hereby, and each other director of the REIT, if, in each case, such
other director's nomination for election to the board of directors of the REIT
is recommended by at least 66 2/3% of the then Continuing Directors.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
Property is bound.
11
"Control Investment Affiliate": as to any Person, any other
Person that (a) directly or indirectly, is in control of, is controlled by, or
is under common control with, such Person and (b) is organized by such Person
primarily for the purpose of making equity or debt investments in one or more
companies. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.
"Default": any of the events specified in Section 9, whether
or not any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"Derivatives Counterparty": as defined in Section 8.6.
"Disposition": with respect to any Property, any sale, lease,
sale and leaseback, assignment, conveyance, transfer or other disposition
thereof; and the terms "Dispose" and "Disposed of" shall have correlative
meanings.
"Dollars" and "$": dollars in lawful currency of the United
States of America.
"Domestic Subsidiary": any Subsidiary of the Borrower
organized under the laws of any jurisdiction within the United States of
America.
"Environmental Indemnity Agreement": the Environmental
Indemnity Agreement to be executed and delivered by each Loan Party executing a
mortgage, substantially in the form of Exhibit O.
"Environmental Laws": any and all laws, rules, orders,
regulations, statutes, ordinances, guidelines, codes, decrees, or other legally
enforceable requirements (including, without limitation, common law) of any
international authority, foreign government, the United States, or any state,
local, municipal or other governmental authority, regulating, relating to or
imposing liability or standards of conduct concerning protection of the
environment or of human health, or employee health and safety, as has been, is
now, or may at any time hereafter be, in effect.
"Environmental Permits": any and all permits, licenses,
approvals, registrations, notifications, exemptions and other authorizations
under any Environmental Law.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Escrow Agent": _____________, and its successors and assigns.
"Escrow Agreement": the Escrow Agreement to be executed and
delivered by the REIT, the Borrower, the Subsidiary Guarantors, the
Administrative Agent and the Escrow Agent, substantially in the form of Exhibit
O, as the same may be amended, supplemented or otherwise modified from time to
time.
"Eurocurrency Reserve Requirements": for any day, the
aggregate (without duplication) of the maximum rates (expressed as a decimal
fraction) of reserve requirements in
12
effect on such day (including, without limitation, basic, supplemental, marginal
and emergency reserves) under any regulations of the Board or other Governmental
Authority having jurisdiction with respect thereto dealing with reserve
requirements prescribed for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the Board) maintained by a member
bank of the Federal Reserve System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period, the rate per annum determined on the basis of the rate for
deposits in Dollars for a period equal to such Interest Period commencing on the
first day of such Interest Period appearing on Page 3750 of the Telerate screen
as of 11:00 A.M., London time, two Business Days prior to the beginning of such
Interest Period. In the event that such rate does not appear on Page 3750 of the
Telerate screen (or otherwise on such screen), the "Eurodollar Base Rate" for
purposes of this definition shall be determined by reference to such other
comparable publicly available service for displaying eurodollar rates as may be
selected by the Administrative Agent.
"Eurodollar Loans": Loans for which the applicable rate of
interest is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each
Interest Period, a rate per annum determined for such day in accordance with the
following formula (rounded upward to the nearest 1/100th of 1%):
Eurodollar Base Rate
--------------------------------------------------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar
Loans under a particular Facility the then current Interest Periods with respect
to all of which begin on the same date and end on the same later date (whether
or not such Loans shall originally have been made on the same day).
"Event of Default": any of the events specified in Section 9,
provided that any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"Exchange Act": the Securities Exchange Act of 1934, as
amended, together with the rules and regulations promulgated thereunder.
"Excluded Foreign Subsidiary": any Foreign Subsidiary in
respect of which either (a) the pledge of all of the Capital Stock of such
Subsidiary as Collateral or (b) the guaranteeing by such Subsidiary of the
Obligations, would, in the good faith judgment of the Borrower, result in
adverse tax consequences to the Borrower.
"Excluded Financing Subsidiary": any Subsidiary of the
Borrower (i) which is the primary obligor with respect to any Indebtedness
outstanding under Section 8.2(d) or 8.2(f) and such Indebtedness expressly
prohibits the pledge of the Capital Stock of such Subsidiary to secure the
Obligations and (ii) which does not own or lease a Borrowing Base Property.
13
"Extensions of Credit": as to any Lender at any time an amount
equal to the sum of (a) the aggregate principal amount of all Loans made by such
Lender then outstanding and (b) such Lender's Commitment Percentage of the L/C
Obligations then outstanding.
"Facility": the Commitments and the extensions of credit made
thereunder.
"Fair Market Value": with respect to any asset, the price
which could be negotiated in an arm's length transaction, for cash, between a
willing seller and a willing buyer, neither of which is under pressure or
compulsion to complete the transaction. Fair Market Value shall be determined by
the board of directors of the general partner of the Borrower acting in good
faith and evidenced by a board resolution thereof delivered to the
Administrative Agent or, with respect to any asset valued at less than
$1,000,000, such determination may be by a duly authorized officer of the
Borrower evidenced by a certificate of Responsible Officer delivered to the
Administrative Agent.
"Federal Funds Effective Rate": for any day, 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 on the
next succeeding Business Day by the Federal Reserve Bank of
New York, or, if
such rate is not so published for any day that is a Business Day, the average of
the quotations for the day of such transactions received by the Administrative
Agent from three federal funds brokers of recognized standing selected by it.
"FIRREA": the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, as amended.
"Foreign Subsidiary": any Subsidiary of the Borrower that is
not a Domestic Subsidiary.
"Funding Office": the office specified from time to time by
the Administrative Agent as its funding office by notice to the Borrower and the
Lenders.
"Funds From Operations": for any period, with respect to the
REIT and its Subsidiaries, Consolidated Net Income of the REIT and its
Subsidiaries for such period, plus real estate depreciation and amortization
(excluding amortization of financing costs), plus amortization associated with
the purchase of property management companies, plus non-charges for the
impairment of real estate assets for such period, minus, to the extent included
in the statement of such Consolidated Net Income for such period (without
duplication), gains or losses from debt restructuring and sales of property, and
after adjustments for unconsolidated partnerships and joint ventures (with
adjustments for unconsolidated partnerships and joint ventures calculated to
reflect funds from operations on the same basis) together with adjustments for
the non-cash deferred portion of any income tax provision for unconsolidated
subsidiaries and the payment of dividends on preferred stock, as interpreted by
the National Association of Real Estate Investment Trusts in its March, 1995,
White Paper on Funds From Operations; provided that, the following shall be
excluded when calculating "Funds From Operations": (i) non-cash adjustments for
loan amortization costs, and (ii) interest expense charges (or benefits) for
minority interest marked-to-market adjustments arising under Statement of
14
Financial Accounting Standards No. 150 of the Financial Accounting Standards
Board ("FAS 150") as interpreted under GAAP.
"GAAP": generally accepted accounting principles in the United
States of America as in effect from time to time.
"Governmental Authority": any nation or government, any state
or other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).
"Guarantee and Collateral Agreement": the Guarantee and
Collateral Agreement to be executed and delivered by the REIT, the Borrower and
each Subsidiary Guarantor, substantially in the form of Exhibit A, as the same
may be amended, supplemented or otherwise modified from time to time.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation, including a reimbursement, counterindemnity or similar
obligation, of the guaranteeing person that guarantees or in effect guarantees,
or which is given to induce the creation of a separate obligation by another
Person (including any bank under any letter of credit) that guarantees or in
effect guarantees any Indebtedness, leases, dividends or other obligations (the
"primary obligations") of any other third Person (the "primary obligor") in any
manner, whether directly or indirectly, including, without limitation, any
obligation of the guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any Property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the purchase
or payment of any such primary obligation or (2) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase Property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of any such
primary obligation against loss in respect thereof; provided, however, that the
term Guarantee Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Guarantee Obligation of any guaranteeing person shall be deemed to be the lower
of (a) an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee Obligation is made and (b) the
maximum amount for which such guaranteeing person may be liable pursuant to the
terms of the instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person may be
liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by the Borrower in good
faith.
"Guarantors": the collective reference to the REIT and the
Subsidiary Guarantors.
15
"Hedge Agreements": all interest rate or currency swaps, caps
or collar agreements, foreign exchange agreements, commodity contracts or
similar arrangements entered into by the Borrower or its Subsidiaries providing
for protection against fluctuations in interest rates, currency exchange rates,
commodity prices or the exchange of nominal interest obligations, either
generally or under specific contingencies.
"Increase Effective Date": the date on which the
Administrative Agent shall have received a Commitment Increase Notice and all
conditions precedent to the effectiveness of the related Commitment increase set
forth in Section 2.20 shall have been satisfied, which date shall occur no later
than the second anniversary of the Closing Date.
"Increase Option Period": the period beginning on the Closing
Date to, but excluding, the date that is the second anniversary of the Closing
Date.
"Indebtedness": of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money, (b) all
obligations of such Person for the deferred purchase price of Property or
services (other than trade payables incurred in the ordinary course of such
Person's business), (c) all obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments, (d) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to Property acquired by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of default are limited
to repossession or sale of such Property), (e) all Capital Lease Obligations of
such Person, (f) all obligations of such Person, contingent or otherwise, as an
account party or applicant under acceptance, letter of credit, surety bond or
similar facilities, (g) all obligations of such Person, contingent or otherwise,
to purchase, redeem, retire or otherwise acquire for value any Capital Stock of
such Person, (h) all Guarantee Obligations of such Person in respect of
obligations of the kind referred to in clauses (a) through (g) above, (i) all
obligations of the kind referred to in clauses (a) through (h) above secured by
(or for which the holder of such obligation has an existing right, contingent or
otherwise, to be secured by) any Lien on Property (including, without
limitation, accounts and contract rights) owned by such Person, whether or not
such Person has assumed or become liable for the payment of such obligation and
(j) for the purposes of Section 9(e) only, all obligations of such Person in
respect of Hedge Agreements. The Indebtedness of any Person shall include the
Indebtedness of any other entity (including any partnership in which such Person
is a general partner) to the extent such Person is liable therefor as a result
of such Person's ownership interest in or other relationship with such entity,
except to the extent the terms of such Indebtedness expressly provide that such
Person is not liable therefor, provided that, Indebtedness shall include such
Person's pro-rata share of any Indebtedness of any joint venture in which such
Person is a partner, regardless if such Person is liable therefor.
"Indemnified Liabilities": as defined in Section 11.5.
"Indemnitee": as defined in Section 11.5.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.
16
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": the collective reference to all
rights, priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign laws or otherwise,
including, without limitation, copyrights, copyright licenses, patents, patent
licenses, trademarks, trademark licenses, technology, know-how and processes,
and all rights to xxx at law or in equity for any infringement or other
impairment thereof, including the right to receive all proceeds and damages
therefrom.
"Interest Payment Date": (a) as to any Base Rate Loan, the
last day of each March, June, September and December to occur while such Loan is
outstanding and the final maturity date of such Loan, (b) as to any Eurodollar
Loan having an Interest Period of three months or shorter, the last day of such
Interest Period, (c) as to any Eurodollar Loan having an Interest Period longer
than three months, each day that is three months, or a whole multiple thereof,
after the first day of such Interest Period and the last day of such Interest
Period and (d) as to any Loan (other than any Base Rate Loan), the date of any
repayment or prepayment made in respect thereof.
"Interest Period": as to any Eurodollar Loan, (a) initially,
the period commencing on the borrowing or conversion date, as the case may be,
with respect to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower in its notice of borrowing or notice of
conversion, as the case may be, given with respect thereto; and (b) thereafter,
each period commencing on the last day of the next preceding Interest Period
applicable to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower by irrevocable notice to the
Administrative Agent not later than 11:00 A.M.,
New York City time, on the date
that is three Business Days prior to the last day of the then current Interest
Period with respect thereto; provided that, all of the foregoing provisions
relating to Interest Periods are subject to the following:
(1) if any Interest Period would otherwise end on a day that
is not a Business Day, such Interest Period shall be extended
to the next succeeding Business Day unless the result of such
extension would be to carry such Interest Period into another
calendar month in which event such Interest Period shall end
on the immediately preceding Business Day;
(2) any Interest Period that would otherwise extend beyond the
Termination Date shall end on the Termination Date; and
(3) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end
of such Interest Period) shall end on the last Business Day of
the calendar month at the end of such Interest Period.
"Investments": as defined in Section 8.7.
"IPO": as defined in the recitals.
17
"Issuing Lender": Wachovia Bank, National Association or any
Lender from time to time designated by the Borrower as an Issuing Lender with
the consent of such Lender and the Administrative Agent.
"L/C Commitment": $10,000,000.
"L/C Fee Payment Date": the last day of each March, June,
September and December and the last day of the Commitment Period.
"L/C Obligations": at any time, an amount equal to the sum of
(a) the aggregate then undrawn and unexpired amount of the then outstanding
Letters of Credit and (b) the aggregate amount of drawings under Letters of
Credit that have not then been reimbursed pursuant to Section 3.5.
"L/C Participants": with respect to any Letter of Credit, the
collective reference to all the Lenders other than the Issuing Lender that
issued such Letter of Credit.
"Lease-Up Property": any Subject Property upon which
construction of all improvements has been completed but has not reached
stabilization. For the purposes of this definition, the "stabilization" of any
Subject Property is the earlier to occur of (a) the first date on which the
Occupancy Rate equals or exceeds 65% and (b) the date that is twelve months
after the completion of such construction.
"Xxxxxx Entity": any of Xxxxxx Commercial Paper Inc. or any of
its affiliates (including Syndicated Loan Funding Trust).
"Lender Addendum": with respect to any initial Lender, a
Lender Addendum, substantially in the form of Exhibit I, to be executed and
delivered by such Lender on the Closing Date as provided in Section 11.17.
"Lenders": as defined in the preamble hereto.
"Letters of Credit": as defined in Section 3.1(a).
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement and any
capital lease having substantially the same economic effect as any of the
foregoing).
"Loan": any loan made by any Lender pursuant to this
Agreement.
"Loans": as defined in Section 2.1.
"Loan Documents": this Agreement, the Security Documents, the
Environmental Indemnity Agreement, the Escrow Agreement, the Applications and
the Notes.
18
"Loan Parties": the REIT, the Borrower and each Subsidiary of
the Borrower that is a party to a Loan Document.
"Material Adverse Effect": a material adverse effect on (a)
the Transactions, (b) the business, assets, property, operations, condition
(financial or otherwise) or prospects of the Borrower and its Subsidiaries taken
as a whole or (c) the validity or enforceability of this Agreement or any of the
other Loan Documents or the rights or remedies of the Agents or the Lenders
hereunder or thereunder.
"Material Environmental Amount": an amount or amounts payable
by the Borrower and/or any of its Subsidiaries, in the aggregate in excess of
$1,000,000, for: costs to comply with any Environmental Law; costs of any
investigation, and any remediation, of any Material of Environmental Concern;
and compensatory damages (including, without limitation damages to natural
resources), punitive damages, fines, and penalties pursuant to any Environmental
Law.
"Material Subsidiary": any Subsidiary of the Borrower (other
than any Excluded Foreign Subsidiary or Excluded Financing Subsidiary or any
Subsidiary of an Excluded Foreign Subsidiary or Excluded Financing Subsidiary)
which (a) owns, or otherwise has any interest in, any Borrowing Base Property or
any other property or asset which is taken into account when calculating
Borrowing Base Value; (b) has total assets greater than or equal to 5% of total
assets of the Borrower determined on a consolidated basis (calculated as of the
end of the fiscal quarter most recently ending for which financial statements
are available) or (c) has total revenues greater than or equal to 5% of the
total revenues of the Borrower determined on a consolidated basis (calculated
for the fiscal quarter most recently ending for which financial statements are
available). In any event, the term "Material Subsidiaries" shall mean and
include all Subsidiaries of the Borrower, which, together with the Borrower,
account for 90% or more of the Adjusted Total Revenue of the Borrower determined
on a consolidated basis for the fiscal quarter most recently ended for which
financial statements are available. If more than one combination of Subsidiaries
satisfies such threshold, then those Subsidiaries so determined to be "Material
Subsidiaries" shall be specified by the Borrower. Schedule 5.15 sets forth the
Material Subsidiaries as of the Closing Date.
"Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum products,
polychlorinated biphenyls, urea-formaldehyde insulation, asbestos, pollutants,
contaminants, radioactivity, and any other substances or forces of any kind,
whether or not any such substance or force is defined as hazardous or toxic
under any Environmental Law, that is regulated pursuant to or could give rise to
liability under any Environmental Law.
"Mortgages": each of the mortgages and deeds of trust made by
any Loan Party in favor of, or for the benefit of, the Administrative Agent for
the benefit of the Secured Parties, substantially in the form of Exhibit D (with
such changes thereto as shall be advisable under the law of the jurisdiction in
which such mortgage or deed of trust is to be recorded), as the same may be
amended, supplemented or otherwise modified from time to time.
19
"Multiemployer Plan": a Plan that is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Operating Income": with respect to any Subject Property
for any period, the sum (without duplication) of (a) rents and other revenues
received in the ordinary course of business from operating such Property
(including the proceeds of rent loss insurance, but excluding pre-paid rents and
revenues and security deposits (except to the extent applied in satisfaction of
tenants' obligations for rents)) during such period minus (b) all expenses paid
or accrued related to the ownership, operation or maintenance of such Property,
including, but not limited to, taxes, assessments and other similar charges,
insurance, utilities, payroll costs, maintenance, repair and landscaping
expenses and on-site marketing expenses during such period minus (c) Reserves
for Capital Expenditures with respect to such Property for such period minus (d)
an implied management fee in an amount equal to 5.0% of the total gross revenues
for such Property for such period.
"Net Proceeds": with respect to any issuance or sale of equity
securities of any Person, the aggregate amount of all cash proceeds and the Fair
Market Value of all other Property received by such Person from such issuance,
net of investment banking fees, legal fees, accountants' fees, underwriting
discounts and commissions and other customary fees and expenses actually
incurred by such Person in connection therewith.
"New Lender": as defined in Section 2.20(b).
"Non-Excluded Taxes": as defined in Section 2.15(a).
"Non-U.S. Lender": as defined in Section 2.15(d).
"Note": as defined in Section 2.3.
"Obligations": the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity of the
Loans and Reimbursement Obligations and interest accruing after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding)
the Loans, the Reimbursement Obligations and all other obligations and
liabilities of the Borrower to the Administrative Agent or to any Lender or any
Qualified Counterparty, whether direct or indirect, absolute or contingent, due
or to become due, or now existing or hereafter incurred, which may arise under,
out of, or in connection with, this Agreement, any other Loan Document, the
Letters of Credit, any Specified Hedge Agreement or any other document made,
delivered or given in connection herewith or therewith, whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses (including, without limitation, all fees, charges and disbursements of
counsel to the Administrative Agent or to any Lender that are required to be
paid by the Borrower pursuant hereto) or otherwise; provided, that (i)
obligations of the Borrower or any Subsidiary under any Specified Hedge
Agreement shall be secured and guaranteed pursuant to the Security Documents
only to the extent that, and for so long as, the other Obligations are so
secured and guaranteed and (ii) any release of Collateral or Guarantors
20
effected in the manner permitted by this Agreement shall not require the consent
of holders of obligations under Specified Hedge Agreements.
"Occupancy Rate": with respect to any Subject Property on any
date of determination, the ratio, expressed as a percentage of (a) the aggregate
leaseable square footage of all completed space of such Property actually
occupied by tenants that are not Affiliates of any Loan Party, paying rent at
market rates pursuant to binding leases as to which no monetary default has
occurred and has continued for a period in excess of 45 days to (b) the
aggregate leaseable square footage of all completed space of such Property.
"Other Taxes": any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document.
"Participant": as defined in Section 11.6(b).
"Payment Office": the office specified from time to time by
the Administrative Agent as its payment office by notice to the Borrower and the
Lenders.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).
"Permitted Investors": the collective reference to Xxxxxx X.
Xxxxxxx, Xxxxx X. Xxxxxxx, Xxxx X. Xxxxxxx, the Xxxxxx X. Xxxxxxx Family
Irrevocable Trust and the Xxxxxxx Xxxxxxx Family Irrevocable Trust.
"Person": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"Plan": at a particular time, any employee benefit plan that
is covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5)
of ERISA.
"Pricing Grid": the pricing grid attached hereto as Annex A.
"Pro Forma Balance Sheet": as defined in Section 5.1(a).
"Projections": as defined in Section 7.2(c).
"Property": any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible or
intangible, including, without limitation, Capital Stock.
"Property Management Agreement": with respect to a Subject
Property, an agreement entered into by a Loan Party to engage a Person to advise
such Loan Party with
21
respect to the management of such Property. As of the Closing Date, all
Borrowing Base Properties are subject to the Property Management Agreement,
dated as of October __, 2004, between the Borrower and YSI Management LLC, a
Delaware corporation.
"Qualified Counterparty": with respect to any Specified Hedge
Agreement, any counterparty thereto that, at the time such Specified Hedge
Agreement was entered into, was a Lender or an affiliate of a Lender.
"Recordation Date": the earlier of: (i) the date on which an
Event of Default shall have occurred and is continuing or (ii) the date on which
the Administrative Agent receives notice pursuant to Section 7.2(g) stating that
the Borrowing Base Leverage Ratio equals or exceeds 0.55 to 1.00.
"REIT": as defined in the preamble.
"REIT Status": with respect to any Person, (a) the
qualification of such Person as a real estate investment trust under Sections
856 through 860 of the Code, and (b) the applicability to such Person and its
shareholders of the method of taxation provided for in Sections 857 et seq. of
the Code.
"Register": as defined in Section 11.6(d).
"Regulation H": Regulation H of the Board as in effect from
time to time.
"Regulation U": Regulation U of the Board as in effect from
time to time.
"Reimbursement Obligation": the obligation of the Borrower to
reimburse each Issuing Lender pursuant to Section 3.5 for amounts drawn under
Letters of Credit issued by such Issuing Lender.
"Related Fund": with respect to any Lender, any fund that (x)
invests in commercial loans and (y) is managed or advised by the same investment
advisor as such Lender, by such Lender or an Affiliate of such Lender.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
"Reportable Event": any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty day notice
period is waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of
PBGC Reg. Section 4043.
"Required Lenders": at any time, the holders of more than 66?%
of the Total Commitments then in effect or, if the Commitments have been
terminated, more than 66?% of the Total Extensions of Credit then outstanding.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in
22
each case applicable to or binding upon such Person or any of its Property or to
which such Person or any of its Property is subject.
"Reserves for Capital Expenditures": with respect to any
Subject Property for any period, an amount equal to (a) the aggregate leaseable
square footage of all completed space of such Property multiplied by (b) the
Applicable Reserve Amount multiplied by (c) the number of days actually elapsed
during such period divided by (d) 365.
"Responsible Officer": the chief executive officer, president
or chief financial officer of the general partner of the Borrower, but in any
event, with respect to financial matters, the chief financial officer of the
general partner of the Borrower.
"Restricted Payments": as defined in Section 8.6.
"Restructuring": as defined in the recitals.
"SEC": the Securities and Exchange Commission (or successors
thereto or an analogous Governmental Authority).
"Secured Parties": as defined in the Guarantee and Collateral
Agreement.
"Security Documents": the collective reference to the
Guarantee and Collateral Agreement, the Mortgages and all other security
documents hereafter delivered to the Administrative Agent granting a Lien on any
Property of any Person to secure the obligations and liabilities of any Loan
Party under any Loan Document.
"Single Employer Plan": any Plan that is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Solvent": with respect to any Person, as of any date of
determination, (a) the amount of the "present fair saleable value" of the assets
of such Person will, as of such date, exceed the amount of all "liabilities of
such Person, contingent or otherwise", as of such date, as such quoted terms are
determined in accordance with applicable federal and state laws governing
determinations of the insolvency of debtors, (b) the present fair saleable value
of the assets of such Person will, as of such date, be greater than the amount
that will be required to pay the liability of such Person on its debts as such
debts become absolute and matured, (c) such Person will not have, as of such
date, an unreasonably small amount of capital with which to conduct its
business, and (d) such Person will be able to pay its debts as they mature. For
purposes of this definition, (i) "debt" means liability on a "claim", and (ii)
"claim" means any (x) right to payment, whether or not such a right is reduced
to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured or (y) right to an
equitable remedy for breach of performance if such breach gives rise to a right
to payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured
or unsecured.
"Specified Hedge Agreement": any Hedge Agreement entered into
by the Borrower or any Subsidiary Guarantor and any Qualified Counterparty.
23
"Storage Property": a self-storage facility owned and operated
by the Borrower or any of its Subsidiaries.
"Subject Property": any Storage Property or Business Park
Property.
"Subsidiary": as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrower.
"Subsidiary Guarantor": each Subsidiary of the Borrower that
is a party to the Guarantee and Collateral Agreement.
"Syndication Agent": as defined in the preamble hereto.
"Tangible Net Worth": for any Person on any date of
determination, such Person's total stockholder's equity, plus accumulated
depreciation and amortization, minus (to the extent reflected in determining
stockholders' equity of such Person): (a) the amount of any write-up in the book
value of any assets reflected in any balance sheet resulting from revaluation
thereof or any write-up in excess of the cost of such assets acquired, and (b)
the aggregate of all amounts appearing on the asset side of any such balance
sheet for patents, patent applications, copyrights, trademarks, trade names,
goodwill and other like assets which would be classified as intangible assets
under GAAP.
"Termination Date": October __, 2007, as it may be extended
pursuant to Section 2.19.
"Tie-In Jurisdiction": a jurisdiction in which a "tie-in"
endorsement may be obtained for a title insurance policy covering real property
located in such jurisdiction, which endorsement effectively ties coverage to
other title insurance policies covering real property located in other
jurisdictions.
"Total Commitments": at any time, the aggregate amount of the
Commitments then in effect.
"Total Extensions of Credit": at any time, the aggregate
amount of the Extensions of Credit of the Lenders outstanding at such time.
"Transactions": a collective reference to the Restructuring,
the financing thereof pursuant to this Agreement, the CMBS Financing and the
IPO.
"Transferee": as defined in Section 11.15.
24
"Type": as to any Loan, its nature as a Base Rate Loan or a
Eurodollar Loan.
"Wholly Owned Subsidiary": as to any Person, any other Person
all of the Capital Stock of which (other than directors' qualifying shares
required by law) is owned by such Person directly and/or through other Wholly
Owned Subsidiaries.
"Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor
that is a Wholly Owned Subsidiary of the Borrower.
1.2 Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in the other Loan Documents or any certificate or other
document made or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to the REIT, the Borrower and its Subsidiaries not
defined in Section 1.1 and accounting terms partly defined in Section 1.1, to
the extent not defined, shall have the respective meanings given to them under
GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
(e) All calculations of financial ratios set forth in Section
8.1 and the calculation of the ratio of Consolidated Total Debt to Consolidated
Total Asset Value for purposes of determining the Applicable Margin shall be
calculated to the same number of decimal places as the relevant ratios are
expressed in and shall be rounded upward if the number in the decimal place
immediately following the last calculated decimal place is five or greater. For
example, if the relevant ratio is to be calculated to the hundredth decimal
place and the calculation of the ratio is 5.126, the ratio will be rounded up to
5.13.
Section 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Commitments. (a) Subject to the terms and conditions
hereof, the Lenders severally agree to make revolving credit loans ("Loans") to
the Borrower from time to time during the Commitment Period in an aggregate
principal amount at any one time outstanding (i) for each Lender which, when
added to such Lender's Commitment Percentage of the L/C Obligations then
outstanding, does not exceed the amount of such Lender's Commitment and (ii) for
all Lenders, does not exceed the Borrowing Base at such time. During the
Commitment Period the Borrower may use the Commitments by borrowing, prepaying
the Loans in whole or in part, and reborrowing, all in accordance with the terms
and conditions hereof. The Loans may from time to time be Eurodollar Loans or
Base Rate Loans, as determined by the Borrower and notified to the
Administrative Agent in accordance with Sections 2.2 and 2.8,
25
provided that no Loan shall be made as a Eurodollar Loan after the day that is
one month prior to the Termination Date.
(b) The Borrower shall repay all outstanding Loans on the
Termination Date.
2.2 Procedure for Borrowing. The Borrower may borrow under the
Commitments on any Business Day during the Commitment Period, provided that the
Borrower shall deliver to the Administrative Agent a Borrowing Notice (which
Borrowing Notice must be received by the Administrative Agent prior to 12:00
Noon,
New York City time, (a) three Business Days prior to the requested
Borrowing Date, in the case of Eurodollar Loans, or (b) one Business Day prior
to the requested Borrowing Date, in the case of Base Rate Loans). Any Loans made
on the Closing Date shall initially be Base Rate Loans, and no Loan may be made
as, converted into or continued as a Eurodollar Loan having an Interest Period
in excess of one month prior to the date which is the earlier of (i) 60 days
after the Closing Date and (ii) the date on which the Arrangers notify the
Borrower that the primary syndication of the Facility is complete. Each
borrowing of Loans under the Commitments shall be in an amount equal to (x) in
the case of Base Rate Loans, $1,000,000 or a whole multiple in excess of
$100,000 thereof (or, if the then aggregate Available Commitments are less than
$1,000,000, such lesser amount) and (y) in the case of Eurodollar Loans,
$2,000,000 or a whole multiple of $100,000 in excess thereof. Upon receipt of
any such Borrowing Notice from the Borrower, the Administrative Agent shall
promptly notify each Lender thereof. Each Lender will make its Commitment
Percentage of the amount of each borrowing of Loans available to the
Administrative Agent for the account of the Borrower at the Funding Office prior
to 12:00 Noon,
New York City time, on the Borrowing Date requested by the
Borrower in funds immediately available to the Administrative Agent. Such
borrowing will then be made available to the Borrower by the Administrative
Agent in like funds as received by the Administrative Agent.
2.3 Repayment of Loans; Evidence of Debt. (a) The Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of the appropriate Lender, the then unpaid principal amount of each Loan
of such Lender on the Termination Date (or on such earlier date on which the
Loans become due and payable pursuant to Section 9). The Borrower hereby further
agrees to pay interest on the unpaid principal amount of the Loans from time to
time outstanding from the date hereof until payment in full thereof at the rates
per annum, and on the dates, set forth in Section 2.10.
(b) Each Lender shall maintain in accordance with its
usual practice an account or accounts evidencing indebtedness of the Borrower to
such Lender resulting from each Loan of such Lender from time to time, including
the amounts of principal and interest payable and paid to such Lender from time
to time under this Agreement.
(c) The Administrative Agent, on behalf of the Borrower,
shall maintain the Register pursuant to Section 11.6(d), and a subaccount
therein for each Lender, in which shall be recorded (i) the amount of each Loan
made hereunder and any Note evidencing such Loan, the Type of such Loan and each
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) both the amount of any sum received by the Administrative
Agent hereunder from the Borrower and each Lender's share thereof.
26
(d) The entries made in the Register and the accounts of
each Lender maintained pursuant to Section 2.3(b) shall, to the extent permitted
by applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans made to
the Borrower by such Lender in accordance with the terms of this Agreement.
(e) The Borrower agrees that, upon the request to the
Administrative Agent by any Lender, the Borrower will promptly execute and
deliver to such Lender a promissory note of the Borrower evidencing any Loans of
such Lender, substantially in the form of Exhibit G (a "Note"), with appropriate
insertions as to date and principal amount; provided, that delivery of Notes
shall not be a condition precedent to the occurrence of the Closing Date or the
making of the Loans or issuance of Letters of Credit on the Closing Date.
2.4 Commitment Fees, etc. (a) The Borrower agrees to pay to
the Administrative Agent for the account of each Lender a commitment fee for the
period from and including the Closing Date to the last day of the Commitment
Period, computed at the Commitment Fee Rate on the average daily amount of the
Available Commitment of such Lender during the period for which payment is made,
payable quarterly in arrears on the last day of each March, June, September and
December and on the Termination Date, commencing on the first of such dates to
occur after the date hereof.
(b) The Borrower agrees to pay to the Administrative
Agent the fees in the amounts and on the dates from time to time agreed to in
writing by the Borrower and the Administrative Agent.
2.5 Termination or Reduction of Commitments. The Borrower
shall have the right, upon not less than three Business Days' notice to the
Administrative Agent, to terminate the Commitments or, from time to time, to
reduce the aggregate amount of the Commitments; provided that no such
termination or reduction of Commitments shall be permitted if, after giving
effect thereto and to any prepayments of the Loans made on the effective date
thereof, the Total Extensions of Credit would exceed the Total Commitments. Any
such reduction shall be in an amount equal to $10,000,000, or a whole multiple
of $5,000,000 in excess thereof, and shall reduce permanently the Commitments
then in effect.
2.6 Optional Prepayments. The Borrower may at any time and
from time to time prepay the Loans, in whole or in part, without premium or
penalty (except as otherwise provided herein), upon irrevocable notice delivered
to the Administrative Agent no later than 11:00 A.M.,
New York City time, three
Business Days prior thereto in the case of Eurodollar Loans and no later than
11:00 A.M.,
New York City time, one Business Day prior thereto in the case of
Base Rate Loans, which notice shall specify the date and amount of such
prepayment and whether such prepayment is of Eurodollar Loans or Base Rate
Loans; provided, that if a Eurodollar Loan is prepaid on any day other than the
last day of the Interest Period applicable thereto, the Borrower shall also pay
any amounts owing pursuant to Section 2.16. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof. If any
such notice is given, the amount specified in such notice shall be due and
payable on the
27
date specified therein, together with (except in the case of Base Rate Loans)
accrued interest to such date on the amount prepaid. Partial prepayments of
Loans shall be in an aggregate principal amount of $1,000,000 or a whole
multiple thereof.
2.7 Mandatory Prepayments. If, on any date the Total
Extensions of Credit exceeds the Borrowing Base in effect on such date, the
Borrower shall repay the Total Extensions of Credit outstanding on such date to
the extent of such excess (without resulting in a permanent reduction of the
Commitments), provided that if the aggregate principal amount of Loans then
outstanding is less than the amount of the Total Extensions of Credit
outstanding on such date (because L/C Obligations constitute a portion thereof),
the Borrower shall, to the extent of the balance of such excess, replace
outstanding Letters of Credit and/or deposit an amount in cash in a cash
collateral account established with the Administrative Agent for the benefit of
the Secured Parties on terms and conditions satisfactory to the Administrative
Agent.
2.8 Conversion and Continuation Options. (a) The Borrower may
elect from time to time to convert Eurodollar Loans to Base Rate Loans by giving
the Administrative Agent at least two Business Days' prior irrevocable notice of
such election, provided that any such conversion of Eurodollar Loans may be made
only on the last day of an Interest Period with respect thereto. The Borrower
may elect from time to time to convert Base Rate Loans to Eurodollar Loans by
giving the Administrative Agent at least three Business Days' prior irrevocable
notice of such election (which notice shall specify the length of the initial
Interest Period therefor), provided that no Base Rate Loan may be converted into
a Eurodollar Loan (i) when any Event of Default has occurred and is continuing
and the Administrative Agent has, or the Required Lenders have, determined in
its or their sole discretion not to permit such conversions or (ii) after the
date that is one month prior to the Termination Date. Upon receipt of any such
notice the Administrative Agent shall promptly notify each relevant Lender
thereof.
(b) The Borrower may elect to continue any Eurodollar
Loan as such upon the expiration of the then current Interest Period with
respect thereto by giving irrevocable notice to the Administrative Agent, in
accordance with the applicable provisions of the term "Interest Period" set
forth in Section 1.1, of the length of the next Interest Period to be applicable
to such Loan, provided that no Eurodollar Loan may be continued as such (i) when
any Event of Default has occurred and is continuing and the Administrative Agent
has, or the Required Lenders have, determined in its or their sole discretion
not to permit such continuations or (ii) after the date that is one month prior
to the Termination Date, and provided, further, that if the Borrower shall fail
to give any required notice as described above in this paragraph or if such
continuation is not permitted pursuant to the preceding proviso, such Loans
shall be converted automatically to Base Rate Loans on the last day of such then
expiring Interest Period. Upon receipt of any such notice the Administrative
Agent shall promptly notify each relevant Lender thereof.
2.9 Minimum Amounts and Maximum Number of Eurodollar Tranches.
Notwithstanding anything to the contrary in this Agreement, all borrowings,
conversions, continuations and optional prepayments of Eurodollar Loans and all
selections of Interest Periods shall be in such amounts and be made pursuant to
such elections so that, (a) after giving effect thereto, the aggregate principal
amount of the Eurodollar Loans comprising each Eurodollar Tranche shall be equal
to $2,000,000 or a whole multiple of $100,000 in excess thereof and (b) no more
than ten Eurodollar Tranches shall be outstanding at any one time.
28
2.10 Interest Rates and Payment Dates. (a) Each Eurodollar
Loan shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
plus the Applicable Margin in effect for such day.
(b) Each Base Rate Loan shall bear interest for each day
on which it is outstanding at a rate per annum equal to the Base Rate in effect
for such day plus the Applicable Margin in effect for such day.
(c) (i) If all or a portion of the principal amount of
any Loan or Reimbursement Obligation shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), all outstanding Loans and
Reimbursement Obligations (whether or not overdue) (to the extent legally
permitted) shall bear interest at a rate per annum that is equal to (x) in the
case of the Loans, the rate that would otherwise be applicable thereto pursuant
to the foregoing provisions of this Section plus 2% or (y) in the case of
Reimbursement Obligations, the rate applicable to Base Rate Loans plus 2%, and
(ii) if all or a portion of any interest payable on any Loan or Reimbursement
Obligation or any commitment fee or other amount payable hereunder shall not be
paid when due (whether at the stated maturity, by acceleration or otherwise),
such overdue amount shall bear interest at a rate per annum equal to the rate
then applicable to Base Rate Loans plus 2%, in each case, with respect to
clauses (i) and (ii) above, from the date of such non-payment until such amount
is paid in full (after as well as before judgment).
(d) Interest shall be payable in arrears on each Interest
Payment Date, provided that interest accruing pursuant to paragraph (c) of this
Section shall be payable from time to time on demand.
2.11 Computation of Interest and Fees. (a) Interest, fees and
commissions payable pursuant hereto shall be calculated on the basis of a
360-day year for the actual days elapsed, except that, with respect to Base Rate
Loans on which interest is calculated on the basis of the Prime Rate, the
interest thereon shall be calculated on the basis of a 365- (or 366-, as the
case may be) day year for the actual days elapsed. The Administrative Agent
shall as soon as practicable notify the Borrower and the Lenders of each
determination of a Eurodollar Rate. Any change in the interest rate on a Loan
resulting from a change in the Base Rate or the Eurocurrency Reserve
Requirements shall become effective as of the opening of business on the day on
which such change becomes effective. The Administrative Agent shall as soon as
practicable notify the Borrower and the Lenders of the effective date and the
amount of each such change in interest rate.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower and the Lenders in the absence of
manifest error. The Administrative Agent shall, at the request of the Borrower,
deliver to the Borrower a statement showing the quotations used by the
Administrative Agent in determining any interest rate pursuant to Section
2.10(a).
2.12 Inability to Determine Interest Rate. If prior to the
first day of any Interest Period:
29
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that,
by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for
such Interest Period, or
(b) the Administrative Agent shall have received notice from
the Required Lenders that the Eurodollar Rate determined or to be
determined for such Interest Period will not adequately and fairly
reflect the cost to the Lenders (as conclusively certified by the
Lenders) of making or maintaining their affected Loans during such
Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the Lenders as soon as practicable thereafter. If such notice is
given (x) any Eurodollar Loans requested to be made on the first day of such
Interest Period shall be made as Base Rate Loans, (y) any Loans that were to
have been converted on the first day of such Interest Period to Eurodollar Loans
shall be continued as Base Rate Loans and (z) any outstanding Eurodollar Loans
shall be converted, on the last day of the then current Interest Period with
respect thereto, to Base Rate Loans. Until such notice has been withdrawn by the
Administrative Agent, no further Eurodollar Loans shall be made or continued as
such, nor shall the Borrower have the right to convert Loans to Eurodollar
Loans.
2.13 Pro Rata Treatment and Payments. (a) Each borrowing by
the Borrower from the Lenders hereunder, each payment by the Borrower on account
of any commitment fee or Letter of Credit fee, and any reduction of the
Commitments of the Lenders, shall be made pro rata according to the Commitment
Percentages of the Lenders. Each payment of interest in respect of the Loans and
each payment in respect of fees payable hereunder shall be applied to the
amounts of such obligations owing to the Lenders pro rata according to the
respective amounts then due and owing to the Lenders.
(b) Each payment (including each prepayment) by the Borrower
on account of principal of the Loans shall be made pro rata according to the
respective outstanding principal amounts of the Loans then held by the Lenders.
Each payment in respect of Reimbursement Obligations in respect of any Letter of
Credit shall be made to the Issuing Lender that issued such Letter of Credit.
(c) The application of any payment of Loans (including
optional and mandatory prepayments) shall be made, first, to Base Rate Loans
and, second, to Eurodollar Loans. Each payment of the Loans (except in the case
of Base Rate Loans) shall be accompanied by accrued interest to the date of such
payment on the amount paid.
(d) All payments (including prepayments) to be made by
the Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without setoff or counterclaim and shall be made prior
to 12:00 Noon,
New York City time, on the due date thereof to the Administrative
Agent, for the account of the Lenders, at the Payment Office, in Dollars and in
immediately available funds. Any payment made by the Borrower after 12:00 Noon,
New York City time, on any Business Day shall be deemed to have been on the next
following Business Day. If any payment hereunder (other than payments on the
Eurodollar Loans) becomes due and payable on a day other than a Business Day,
such payment shall be
30
extended to the next succeeding Business Day. If any payment on a Eurodollar
Loan becomes due and payable on a day other than a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day unless the result
of such extension would be to extend such payment into another calendar month,
in which event such payment shall be made on the immediately preceding Business
Day. In the case of any extension of any payment of principal pursuant to the
preceding two sentences, interest thereon shall be payable at the then
applicable rate during such extension.
(e) Unless the Administrative Agent shall have been notified
in writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Borrowing Date therefor, such Lender shall pay
to the Administrative Agent, on demand, such amount with interest thereon at a
rate equal to the greater of (i) the Federal Funds Effective Rate and (ii) a
rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation, for the period until such Lender makes such
amount immediately available to the Administrative Agent. A certificate of the
Administrative Agent submitted to any Lender with respect to any amounts owing
under this paragraph shall be conclusive in the absence of manifest error. If
such Lender's share of such borrowing is not made available to the
Administrative Agent by such Lender within three Business Days after such
Borrowing Date, the Administrative Agent shall also be entitled to recover such
amount with interest thereon at the rate per annum applicable to Base Rate
Loans, on demand, from the Borrower.
(f) Unless the Administrative Agent shall have been notified
in writing by the Borrower prior to the date of any payment due to be made by
the Borrower hereunder that the Borrower will not make such payment to the
Administrative Agent, the Administrative Agent may assume that the Borrower is
making such payment, and the Administrative Agent may, but shall not be required
to, in reliance upon such assumption, make available to the Lenders their
respective pro rata shares of a corresponding amount. If such payment is not
made to the Administrative Agent by the Borrower within three Business Days
after such due date, the Administrative Agent shall be entitled to recover, on
demand, from each Lender to which any amount which was made available pursuant
to the preceding sentence, such amount with interest thereon at the rate per
annum equal to the daily average Federal Funds Effective Rate. Nothing herein
shall be deemed to limit the rights of the Administrative Agent or any Lender
against the Borrower.
(g) Upon receipt by the Administrative Agent of payments on
behalf of Lenders, the Administrative Agent shall promptly distribute such
payments to the Lender or Lenders entitled thereto, in like funds as received by
the Administrative Agent.
2.14 Requirements of Law. (a) If the adoption of or any change
in any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
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(i) shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement, any Letter of
Credit, any Application or any Eurodollar Loan made by it, or
change the basis of taxation of payments to such Lender in
respect thereof (except for Non-Excluded Taxes covered by
Section 2.15 and changes in the rate of tax on the overall net
income of such Lender);
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar
requirement against assets held by, deposits or other
liabilities in or for the account of, advances, loans or other
extensions of credit by, or any other acquisition of funds by,
any office of such Lender that is not otherwise included in
the determination of the Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other
condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Lender,
upon its demand, any additional amounts necessary to compensate such Lender for
such increased cost or reduced amount receivable. If any Lender becomes entitled
to claim any additional amounts pursuant to this Section, it shall promptly
notify the Borrower (with a copy to the Administrative Agent) of the event by
reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption of
or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under or in respect of any Letter of
Credit to a level below that which such Lender or such corporation could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's or such corporation's policies with respect to capital adequacy)
by an amount deemed by such Lender to be material, then from time to time, after
submission by such Lender to the Borrower (with a copy to the Administrative
Agent) of a written request therefor, the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender or such corporation
for such reduction.
(c) A certificate as to any additional amounts payable
pursuant to this Section submitted by any Lender to the Borrower (with a copy to
the Administrative Agent) shall be conclusive in the absence of manifest error.
The obligations of the Borrower pursuant to this Section shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.15 Taxes. (a) All payments made by the Borrower under this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any
32
Governmental Authority, excluding net income taxes and franchise taxes (imposed
in lieu of net income taxes) imposed on any Agent or any Lender as a result of a
present or former connection between such Agent or such Lender and the
jurisdiction of the Governmental Authority imposing such tax or any political
subdivision or taxing authority thereof or therein (other than any such
connection arising solely from such Agent's or such Lender's having executed,
delivered or performed its obligations or received a payment under, or enforced,
this Agreement or any other Loan Document). If any such non-excluded taxes,
levies, imposts, duties, charges, fees, deductions or withholdings
("Non-Excluded Taxes") or any Other Taxes are required to be withheld from any
amounts payable to any Agent or any Lender hereunder, the amounts so payable to
such Agent or such Lender shall be increased to the extent necessary to yield to
such Agent or such Lender (after payment of all Non-Excluded Taxes and Other
Taxes) interest or any such other amounts payable hereunder at the rates or in
the amounts specified in this Agreement; provided, however, that the Borrower
shall not be required to increase any such amounts payable to any Lender with
respect to any Non-Excluded Taxes (i) that are attributable to such Lender's
failure to comply with the requirements of paragraph (d) or (e) of this Section
or (ii) that are United States withholding taxes imposed on amounts payable to
such Lender at the time such Lender becomes a party to this Agreement, except to
the extent that such Lender's assignor (if any) was entitled, at the time of
assignment, to receive additional amounts from the Borrower with respect to such
Non-Excluded Taxes pursuant to this paragraph (a).
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable
by the Borrower, as promptly as possible thereafter the Borrower shall send to
the Administrative Agent for the account of the relevant Agent or Lender, as the
case may be, a certified copy of an original official receipt received by the
Borrower showing payment thereof. If the Borrower fails to pay any Non-Excluded
Taxes or Other Taxes when due to the appropriate taxing authority or fails to
remit to the Administrative Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Agents and the Lenders
for any incremental taxes, interest or penalties that may become payable by any
Agent or any Lender as a result of any such failure. The agreements in this
Section shall survive the termination of this Agreement and the payment of the
Loans and all other amounts payable hereunder.
(d) Each Lender (or Transferee) that is not a "U.S. Person" as
defined in Section 7701(a)(30) of the Code (a "Non-U.S. Lender") shall deliver
to the Borrower and the Administrative Agent (or, in the case of a Participant,
to the Lender from which the related participation shall have been purchased)
two copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI,
or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest" a statement substantially in the form of
Exhibit H and a Form W-8BEN, or any subsequent versions thereof or successors
thereto properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. federal withholding tax on
all payments by the Borrower under this Agreement and the other Loan Documents.
Such forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of any Participant, on or
before the date such Participant purchases the related participation). In
addition, each Non-U.S. Lender shall
33
deliver such forms promptly upon the obsolescence or invalidity of any form
previously delivered by such Non-U.S. Lender. Each Non-U.S. Lender shall
promptly notify the Borrower at any time it determines that it is no longer in a
position to provide any previously delivered certificate to the Borrower (or any
other form of certification adopted by the U.S. taxing authorities for such
purpose). Notwithstanding any other provision of this paragraph, a Non-U.S.
Lender shall not be required to deliver any form pursuant to this paragraph that
such Non-U.S. Lender is not legally able to deliver.
(e) A Lender that is entitled to an exemption from or
reduction of non-U.S. withholding tax under the law of the jurisdiction in which
the Borrower is located, or any treaty to which such jurisdiction is a party,
with respect to payments under this Agreement shall deliver to the Borrower
(with a copy to the Administrative Agent), at the time or times prescribed by
applicable law or reasonably requested by the Borrower, such properly completed
and executed documentation prescribed by applicable law as will permit such
payments to be made without withholding or at a reduced rate, provided that such
Lender is legally entitled to complete, execute and deliver such documentation
and in such Lender's reasonable judgment such completion, execution or
submission would not materially prejudice the legal position of such Lender.
2.16 Indemnity. The Borrower agrees to indemnify each Lender
for, and to hold each Lender harmless from, any loss or expense that such Lender
may sustain or incur as a consequence of (a) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment after the Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (c) the making of a prepayment or conversion of
Eurodollar Loans on a day that is not the last day of an Interest Period with
respect thereto. Such indemnification may include an amount equal to the excess,
if any, of (i) the amount of interest that would have accrued on the amount so
prepaid, or not so borrowed, converted or continued, for the period from the
date of such prepayment or of such failure to borrow, convert or continue to the
last day of such Interest Period (or, in the case of a failure to borrow,
convert or continue, the Interest Period that would have commenced on the date
of such failure) in each case at the applicable rate of interest for such Loans
provided for herein (excluding, however, the Applicable Margin included therein,
if any) over (ii) the amount of interest (as reasonably determined by such
Lender) that would have accrued to such Lender on such amount by placing such
amount on deposit for a comparable period with leading banks in the interbank
Eurodollar market. A certificate as to any amounts payable pursuant to this
Section submitted to the Borrower by any Lender shall be conclusive in the
absence of manifest error. This covenant shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.
2.17 Illegality. Notwithstanding any other provision herein,
if the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the
commitment of such Lender hereunder to make Eurodollar Loans, continue
Eurodollar Loans as such and convert Base Rate Loans to Eurodollar Loans shall
forthwith be canceled and (b) such Lender's Loans then outstanding as Eurodollar
Loans, if any, shall be
34
converted automatically to Base Rate Loans on the respective last days of the
then current Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such conversion of a Eurodollar Loan occurs on
a day which is not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to Section 2.16.
2.18 Change of Lending Office. Each Lender agrees that, upon
the occurrence of any event giving rise to the operation of Section 2.14,
2.15(a) or 2.17 with respect to such Lender, it will, if requested by the
Borrower, use reasonable efforts (subject to overall policy considerations of
such Lender) to designate another lending office for any Loans affected by such
event with the object of avoiding the consequences of such event; provided, that
such designation is made on terms that, in the sole judgment of such Lender,
cause such Lender and its lending office(s) to suffer no economic, legal or
regulatory disadvantage, and provided, further, that nothing in this Section
shall affect or postpone any of the obligations of any Borrower or the rights of
any Lender pursuant to Section 2.14, 2.15(a) or 2.17.
2.19 Extension of Termination Date. (a) Not earlier than 90
days prior to, nor later than 60 days prior to the Original Termination Date (as
defined below), the Borrower may request by written notice to Administrative
Agent (who shall promptly notify Lenders) a one-time, one year extension of the
Termination Date. Such request shall include a certificate signed by a
Responsible Officer stating that (i) the representations and warranties
contained in Section 5 are true and correct on and as of the date of such
certificate and (ii) no Default or Event of Default exists.
(b) The Termination Date shall be extended to the same date in
the following calendar year, effective as of a date to be determined by
Administrative Agent and the Borrower (the "Extension Effective Date"), and
Administrative Agent shall promptly notify Lenders thereof. On or prior to the
Extension Effective Date, the Borrower shall deliver to Administrative Agent, in
form and substance satisfactory to Administrative Agent: (x) corporate
resolutions and incumbency certificates of the Borrower dated as of the
Extension Effective Date approving such extension, (y) new or amended Notes, if
requested by any new or affected Lender, evidencing such new or extended
Commitments and (z) an acknowledgment and consent from each Guarantor affirming
the effectiveness of the Guarantee and Collateral Agreement and any Security
Document to which it is a party after giving effect to the Termination Date, as
extended hereunder.
(c) Only one extension of the Termination Date may be made,
and the Termination Date shall not, in any event, be extended beyond October __,
2008.
(d) The Borrower shall pay to Administrative Agent, for the
ratable benefit of the Lenders, an extension fee (the "Extension Fee") equal to
0.375% of the aggregate Commitments in effect on the Termination Date (without
giving effect to any extension thereof pursuant to this Section 2.19, the
"Original Termination Date"). The Extension Fee shall be payable on the Original
Termination Date and such extension fees are fully earned on the date paid. The
extension fee paid to each Lender is solely for its own account and is
nonrefundable.
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(e) Upon the satisfaction of the conditions by the Borrower
referred to in this Section 2.19, the extension of the Termination Date pursuant
to this Section 2.19 shall not require the consent of any Lender.
2.20 Commitment Increases. (a) In the event that the Borrower
wishes to increase the Commitments at any time during the Increase Option Period
when no Default or Event of Default has occurred and is continuing, subject to
the approval of the Administrative Agent, it shall notify the Administrative
Agent in writing of the amount (the "Offered Increase Amount") of such proposed
increase (such notice, a "Commitment Increase Notice") in a minimum amount equal
to at least $10,000,000. The Borrower may, at its election, (i) offer one or
more of the Lenders the opportunity to provide all or a portion of any Offered
Increase Amount pursuant to paragraph (c) below and/or (ii) with the consent of
each Issuing Lender and the Administrative Agent (which consent shall not be
unreasonably withheld), offer one or more additional banks, financial
institutions or other entities the opportunity to provide all or a portion of
such Offered Increase Amount pursuant to paragraph (b) below. Each Commitment
Increase Notice shall specify which Lenders and/or banks, financial institutions
or other entities the Borrower desires to provide such Offered Increase Amount.
The Borrower or, if requested by the Borrower, the Administrative Agent will
notify such Lenders, and/or banks, financial institutions or other entities of
such offer.
(b) Any additional bank, financial institution or other entity
which the Borrower selects to offer participation in any Offered Increase Amount
and which elects to become a party to this Agreement and provide a Commitment in
an amount so offered and accepted by it pursuant to clause (ii) of Section
2.20(a) shall execute a New Lender Supplement with the Borrower and the
Administrative Agent, substantially in the form of Exhibit K-1, whereupon such
bank, financial institution or other entity (herein called a "New Lender") shall
become a Lender for all purposes and to the same extent as if originally a party
hereto and shall be bound by and entitled to the benefits of this Agreement,
provided that, the Commitment of any such New Lender shall be in an amount not
less than $5,000,000.
(c) Any Lender which accepts an offer to it by the Borrower to
increase its Commitment pursuant to clause (i) of Section 2.20(a) shall, in each
case, execute a Commitment Increase Supplement with the Borrower, the Issuing
Banks and the Administrative Agent, substantially in the form of Exhibit K-2,
whereupon such Lender shall be bound by and entitled to the benefits of this
Agreement with respect to the full amount of its Commitment as so increased.
(d) On any Increase Effective Date, (i) each bank, financial
institution or other entity that is a New Lender pursuant to Section 2.20(b) or
any Lender which has increased its Commitment pursuant to Section 2.20(c) shall
make available to the Administrative Agent such amounts in immediately available
funds as the Administrative Agent shall determine, for the benefit of the other
relevant Lenders, as being required in order to cause, after giving effect to
such increase and the use of such amounts to make payments to such other
relevant Lenders, each Lender's portion of the outstanding Loans of all the
Lenders to equal its Commitment Percentage of such outstanding Loans and (ii)
the Borrower shall be deemed to have repaid and reborrowed all outstanding Loans
as of the date of any increase in the Commitments (with such reborrowing to
consist of the Types of Loans, with related Interest Periods if applicable,
36
specified in a notice delivered by the Borrower in accordance with the
requirements of Section 2.2). The deemed payments made pursuant to clause (ii)
of the immediately preceding sentence in respect of each Eurodollar Loan shall
be subject to indemnification by the Borrower pursuant to the provisions of
Section 2.16 if the deemed payment occurs other than on the last day of the
related Interest Periods.
(e) Notwithstanding anything to the contrary in this Section
2.20, (i) in no event shall any transaction effected pursuant to this Section
2.20 cause the sum of Total Commitments to exceed $200,000,000, (ii) in no event
may the Borrower deliver more than two Commitment Increase Notices, (iii) in no
event shall there be more than two Increase Effective Dates and (iv) no Lender
shall have any obligation to increase its Commitment unless it agrees to do so
in its sole discretion. Any increase pursuant to this Section 2.20 shall not
require the consent of the Lenders, other than the Lenders, if any, providing
Commitments pursuant to Section 2.20(c).
(f) The Administrative Agent shall have received on or prior
to each Increase Effective Date, for the benefit of the Lenders, (i) a legal
opinion of counsel to the Borrower covering such matters as are customary for
transactions of this type and such other matters as may be reasonably requested
by the Administrative Agent, (ii) certified copies of resolutions of the
Borrower authorizing such Offered Increase Amount and (iii) an acknowledgment
and consent from each Guarantor affirming the effectiveness of the Guarantee and
Collateral Agreement and any Security Document to which it is a party, after
giving effect to the related increase.
SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Subject to the terms and conditions
hereof, each Issuing Lender, in reliance on the agreements of the other Lenders
set forth in Section 3.4(a), agrees to issue letters of credit (the "Letters of
Credit") for the account of the Borrower on any Business Day during the
Commitment Period in such form as may be approved from time to time by such
Issuing Lender; provided, that no Issuing Lender shall have any obligation to
issue any Letter of Credit if, after giving effect to such issuance, (i) the L/C
Obligations would exceed the L/C Commitment, (ii) the aggregate amount of the
Available Commitments would be less than zero or (iii) the Total Extensions of
Credit would exceed the Borrowing Base. Each Letter of Credit shall (i) be
denominated in Dollars and (ii) expire no later than the earlier of (x) the
first anniversary of its date of issuance and (y) the date which is five
Business Days prior to the Termination Date; provided that any Letter of Credit
with a one-year term may provide for the renewal thereof for additional one-year
periods (which shall in no event extend beyond the date referred to in clause
(y) above).
(b) No Issuing Lender shall at any time be obligated to issue
any Letter of Credit hereunder if such issuance would conflict with, or cause
such Issuing Lender or any L/C Participant to exceed any limits imposed by, any
applicable Requirement of Law.
3.2 Procedure for Issuance of Letter of Credit. The Borrower
may from time to time request that an Issuing Lender issue a Letter of Credit by
delivering to such Issuing Lender at its address for notices specified herein an
Application therefor, completed to the
37
satisfaction of such Issuing Lender, and such other certificates, documents and
other papers and information as such Issuing Lender may request. Concurrently
with the delivery of an Application to an Issuing Lender, the Borrower shall
deliver a copy thereof to the Administrative Agent. Upon receipt of any
Application, an Issuing Lender will process such Application and the
certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and shall
promptly issue the Letter of Credit requested thereby by issuing the original of
such Letter of Credit to the beneficiary thereof or as otherwise may be agreed
to by such Issuing Lender and the Borrower (but in no event shall any Issuing
Lender be required to issue any Letter of Credit earlier than three Business
Days after its receipt of the Application therefor and all such other
certificates, documents and other papers and information relating thereto).
Promptly after issuance by an Issuing Lender of a Letter of Credit, such Issuing
Lender shall furnish a copy of such Letter of Credit to the Borrower. Each
Issuing Lender shall promptly give notice to the Administrative Agent of the
issuance of each Letter of Credit issued by such Issuing Lender (including the
face amount thereof), and shall provide a copy of such Letter of Credit to the
Administrative Agent as soon as possible after the date of issuance.
3.3 Fees and Other Charges. (a) The Borrower will pay a fee on
the aggregate drawable amount of all outstanding Letters of Credit at a per
annum rate equal to the Applicable Margin then in effect with respect to
Eurodollar Loans, shared ratably among the Lenders in accordance with their
respective Commitment Percentages and payable quarterly in arrears on each L/C
Fee Payment Date after the issuance date. In addition, the Borrower shall pay to
the relevant Issuing Lender for its own account a fronting fee on the aggregate
drawable amount of all outstanding Letters of Credit issued by it at a rate per
annum agreed between the Borrower and such Issuing Lender, payable quarterly in
arrears on each L/C Fee Payment Date after the issuance date.
(b) In addition to the foregoing fees, the Borrower shall pay
or reimburse each Issuing Lender for such normal and customary costs and
expenses as are incurred or charged by such Issuing Lender in issuing,
negotiating, effecting payment under, amending or otherwise administering any
Letter of Credit.
3.4 L/C Participations. (a) Each Issuing Lender irrevocably
agrees to grant and hereby grants to each L/C Participant, and, to induce each
Issuing Lender to issue Letters of Credit hereunder, each L/C Participant
irrevocably agrees to accept and purchase and hereby accepts and purchases from
each Issuing Lender, on the terms and conditions hereinafter stated, for such
L/C Participant's own account and risk, an undivided interest equal to such L/C
Participant's Commitment Percentage in each Issuing Lender's obligations and
rights under each Letter of Credit issued by such Issuing Lender hereunder and
the amount of each draft paid by such Issuing Lender thereunder. Each L/C
Participant unconditionally and irrevocably agrees with each Issuing Lender
that, if a draft is paid under any Letter of Credit issued by such Issuing
Lender for which such Issuing Lender is not reimbursed in full by the Borrower
in accordance with the terms of this Agreement, such L/C Participant shall pay
to the Administrative Agent for the account of such Issuing Lender upon demand
at such Issuing Lender's address for notices specified herein (and thereafter
the Administrative Agent shall promptly pay to such Issuing Lender) an amount
equal to such L/C Participant's Commitment Percentage of the amount of such
draft, or any part thereof, that is not so reimbursed. Each L/C Participant's
obligation to
38
pay such amount shall be absolute and unconditional and shall not be affected by
any circumstance, including (i) any setoff, counterclaim, recoupment, defense or
other right that such L/C Participant may have against the Issuing Lender, the
Borrower or any other Person for any reason whatsoever, (ii) the occurrence or
continuance of a Default or an Event of Default or the failure to satisfy any of
the other conditions specified in Section 5, (iii) any adverse change in the
condition (financial or otherwise) of the Borrower, (iv) any breach of this
Agreement or any other Loan Document by the Borrower, any other Loan Party or
any other L/C Participant or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
(b) If any amount (a "Participation Amount") required to be
paid by any L/C Participant to an Issuing Lender pursuant to Section 3.4(a) in
respect of any unreimbursed portion of any payment made by such Issuing Lender
under any Letter of Credit is paid to such Issuing Lender within three Business
Days after the date such payment is due, such Issuing Lender shall so notify the
Administrative Agent, which shall promptly notify the L/C Participants, and each
L/C Participant shall pay to the Administrative Agent, for the account of such
Issuing Lender, on demand (and thereafter the Administrative Agent shall
promptly pay to such Issuing Lender) an amount equal to the product of (i) such
Participation Amount, times (ii) the daily average Federal Funds Effective Rate
during the period from and including the date such payment is required to the
date on which such payment is immediately available to such Issuing Lender,
times (iii) a fraction the numerator of which is the number of days that elapse
during such period and the denominator of which is 360. If any Participation
Amount required to be paid by any L/C Participant pursuant to Section 3.4(a) is
not made available to the Administrative Agent for the account of the relevant
Issuing Lender by such L/C Participant within three Business Days after the date
such payment is due, the Administrative Agent on behalf of such Issuing Lender
shall be entitled to recover from such L/C Participant, on demand, such
Participation Amount with interest thereon calculated from such due date at the
rate per annum applicable to Base Rate Loans. A certificate of the
Administrative Agent submitted on behalf of an Issuing Lender to any L/C
Participant with respect to any amounts owing under this Section shall be
conclusive in the absence of manifest error.
(c) Whenever, at any time after an Issuing Lender has made
payment under any Letter of Credit and has received from the Administrative
Agent any L/C Participant's pro rata share of such payment in accordance with
Section 3.4(a), such Issuing Lender receives any payment related to such Letter
of Credit (whether directly from the Borrower or otherwise, including proceeds
of collateral applied thereto by such Issuing Lender), or any payment of
interest on account thereof, such Issuing Lender will distribute to the
Administrative Agent for the account of such L/C Participant (and thereafter the
Administrative Agent will promptly distribute to such L/C Participant) its pro
rata share thereof; provided, however, that in the event that any such payment
received by such Issuing Lender shall be required to be returned by such Issuing
Lender, such L/C Participant shall return to the Administrative Agent for the
account of such Issuing Lender (and thereafter the Administrative Agent shall
promptly return to such Issuing Lender) the portion thereof previously
distributed by such Issuing Lender.
3.5 Reimbursement Obligation of the Borrower. The Borrower
agrees to reimburse each Issuing Lender, on each date on which such Issuing
Lender notifies the Borrower of the date and amount of a draft presented under
any Letter of Credit and paid by such Issuing
39
Lender, for the amount of (a) such draft so paid and (b) any taxes, fees,
charges or other costs or expenses incurred by such Issuing Lender in connection
with such payment (the amounts described in the foregoing clauses (a) and (b) in
respect of any drawing, collectively, the "Payment Amount"). Each such payment
shall be made to such Issuing Lender at its address for notices specified herein
in lawful money of the United States of America and in immediately available
funds. Interest shall be payable on each Payment Amount from the date of the
applicable drawing until payment in full at the rate set forth in (i) until the
second Business Day following the date of the applicable drawing, Section
2.10(b) and (ii) thereafter, Section 2.10(c). Each drawing under any Letter of
Credit shall (unless an event of the type described in clause (i) or (ii) of
Section 9(f) shall have occurred and be continuing with respect to the Borrower,
in which case the procedures specified in Section 3.4 for funding by L/C
Participants shall apply) constitute a request by the Borrower to the
Administrative Agent for a borrowing pursuant to Section 2.2 of Base Rate Loans
in the amount of such drawing. The Borrowing Date with respect to such borrowing
shall be the first date on which a borrowing of Loans could be made, pursuant to
Section 2.2, if the Administrative Agent had received a notice of such borrowing
at the time the Administrative Agent receives notice from the relevant Issuing
Lender of such drawing under such Letter of Credit.
3.6 Obligations Absolute. The Borrower's obligations under
this Section 3 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
that the Borrower may have or have had against any Issuing Lender, any
beneficiary of a Letter of Credit or any other Person. The Borrower also agrees
with each Issuing Lender that such Issuing Lender shall not be responsible for,
and the Borrower's Reimbursement Obligations under Section 3.5 shall not be
affected by, among other things, the validity or genuineness of documents or of
any endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or any dispute between or among the Borrower and
any beneficiary of any Letter of Credit or any other party to which such Letter
of Credit may be transferred or any claims whatsoever of the Borrower against
any beneficiary of such Letter of Credit or any such transferee. No Issuing
Lender shall be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
such Issuing Lender. The Borrower agrees that any action taken or omitted by an
Issuing Lender under or in connection with any Letter of Credit issued by it or
the related drafts or documents, if done in the absence of gross negligence or
willful misconduct and in accordance with the standards or care specified in the
Uniform Commercial Code of the State of
New York, shall be binding on the
Borrower and shall not result in any liability of such Issuing Lender to the
Borrower.
3.7 Letter of Credit Payments. If any draft shall be presented
for payment under any Letter of Credit, the relevant Issuing Lender shall
promptly notify the Borrower and the Administrative Agent of the date and amount
thereof. The responsibility of the relevant Issuing Lender to the Borrower in
connection with any draft presented for payment under any Letter of Credit, in
addition to any payment obligation expressly provided for in such Letter of
Credit issued by such Issuing Lender, shall be limited to determining that the
documents (including each draft) delivered under such Letter of Credit in
connection with such presentment appear on their face to be in conformity with
such Letter of Credit.
40
3.8 Applications. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 3, the provisions of this Section 3 shall apply.
SECTION 4. BORROWING BASE PROPERTIES
4.1 Acceptance of Borrowing Base Properties.
(a) Initial Borrowing Base Properties. As of the Closing Date,
the Administrative Agent and the Lenders have approved for inclusion in
calculations of the Borrowing Base the Subject Properties identified on
Schedule 1.1A and the Borrowing Base Value attributable to each such
Property as of such date (as set forth on Schedule 1.1A); provided
that, on or prior to the Closing Date, the Administrative Agent and the
Lenders shall have received (in electronic form, if feasible and
acceptable to the Lenders), in form and substance reasonably
satisfactory to the Administrative Agent, all of the documents required
to be provided under Section 6.3 with respect to such Properties.
(b) Additional Borrowing Base Properties. After the Closing
Date, the Borrower may request that the Lenders include any additional
Subject Property in calculations of the Borrowing Base, by written
notice to the Administrative Agent and the Lenders and compliance with
the provisions of the immediately following clause (i) or (ii) as
applicable.
(i) Limited Review Properties. If (A) the initial
Borrowing Base Value of such Subject Property is less than
$10,000,000 and (B) such Subject Property satisfies the
limited review criteria set forth on Schedule 4.1(b), then
upon delivery of all of the following documents to the
Administrative Agent and the Lenders (in electronic form, if
feasible and acceptable to the Lenders), in form and substance
satisfactory to the Administrative Agent, such Subject
Property shall become a Borrowing Base Property:
(1) a certificate of the chief financial
officer of the general partner of the Borrower
substantially in the form of Exhibit M setting forth,
among other things, a description of such Property
and certifying that the conditions set forth in (A)
and (B) above have been satisfied with respect to
such Property;
(2) a true and correct copy of all materials
relating to such Property submitted by the general
partner of the Borrower to the Investment Committee
of its board of directors for their approval of such
Property;
(3) all of the documents required to be
provided under Section 6.3 and, if the Recordation
Date has occurred, Section 4.5(b), with respect to
such Property, if not previously delivered to the
Administrative Agent;
41
(4) if there exists any deferred maintenance
with respect to such Property, an engineering report
prepared by Borrower or one of its Affiliates with
respect to such Property setting forth in reasonable
detail such deferred maintenance and the estimated
cost thereof; and
(5) such other items or documents as may be
appropriate under the circumstances as reasonably
requested by the Administrative Agent.
(ii) Other Properties. (A) If such Subject Property
does not otherwise satisfy any of the conditions set forth in
the immediately preceding clause (i), such Property will not
be included in the calculation of the Borrowing Base until it
has been approved for inclusion by the Required Lenders. To
seek such approval of the Required Lenders, the Borrower shall
deliver to the Administrative Agent and the Lenders (in
electronic form, if feasible and acceptable to the Lenders)
the following documents, in form and substance satisfactory to
the Administrative Agent:
(1) a description of such Property,
including the location, size and Occupancy Rate of
such Property;
(2) a copy of the materials relating to such
Property submitted by the general partner of the
Borrower to the Investment Committee of its board of
directors for their approval of such Property;
(3) a detailed operating statement for such
Property for the current fiscal year through the
fiscal quarter most recently ending, certified by the
chief financial officer of the general partner of the
Borrower to the best of such Officer's knowledge as
being true and correct in all material respects;
(4) an operating budget for such Property
with respect to the current fiscal year;
(5) pro-forma financial statements with
respect to such Property for the next succeeding two
fiscal years;
(6) copies of all property condition
assessment reports and mechanical, structural and
maintenance studies performed with respect to such
Property not more than 12 months old;
(7) copies of (I) the applicable Property
Management Agreement and all other material
contracts, if any, which will relate to the use,
occupancy, operation, maintenance, enjoyment or
ownership of such Property, and (II) if such Property
is not yet owned by a Loan Party, the purchase
agreement pursuant to which a Loan Party is to
acquire such Property;
42
(8) (A) if available, detailed historical
Capital Expenditures for the two fiscal years most
recently ending and (B) projected Capital
Expenditures for the immediately succeeding three
full fiscal years for such Property;
(9) if such Property was acquired by a Loan
Party within the previous six months, the closing
statement for the acquisition of such Property;
(10) if there exists any deferred
maintenance with respect to such Property, to the
extent not otherwise provided pursuant to item (6)
above, an engineering report prepared by Borrower or
one of its Affiliates with respect to such Property
setting forth in reasonable detail such deferred
maintenance and the estimated cost thereof;
(11) if the relevant Loan Party has a
leasehold interest in such Property, a copy of the
current lease for such Property (which lease shall be
a ground lease) and all documentation related to such
lease; and
(12) such other information the
Administrative Agent or Lenders may reasonably
request in order to evaluate such Property.
Each Lender shall notify the Administrative Agent in
writing whether it conditionally approves of the designation
of such Property as a Borrowing Base Property within ten
Business Days of receipt of all such documents and
information. If a Lender shall fail to so notify the
Administrative Agent, then such Lender shall be deemed to have
not conditionally approved of such Property.
(B) Upon the conditional approval of such Property as
a Borrowing Base Property by the Required Lenders, if the
Recordation Date has occurred, the Administrative Agent will
(I) obtain an Appraisal of such Property, (II) determine the
Appraised Value thereof and (III) deliver such Appraisal and
the Appraised Value to the Lenders. Each Lender shall notify
the Administrative Agent in writing whether, after review of
such assessments and Appraisal, if applicable, it approves of
the designation of such Property as a Borrowing Base Property
within five Business Days (or if the Recordation Date has
occurred, ten Business Days) of receipt of all such documents
and information. If a Lender shall fail to so notify the
Administrative Agent, then such Lender shall be deemed to have
not approved of such Property. Upon approval of such Property
by the Required Lenders, and upon execution and delivery of
all of the following documents in form and substance
satisfactory to the Administrative Agent, such Property shall
become a Borrowing Base Property:
(1) all of the documents required to be
provided under Section 6.3 and, if the Recordation
Date has occurred, Section 4.5(b), with respect to
such Property, to the extent not previously delivered
to the Administrative Agent; and
43
(2) such other items or documents as may be
appropriate under the circumstances as reasonably
requested by the Administrative Agent.
4.2 Release of Borrowing Base Properties. The Borrower may
request, upon not less than 30 days' prior written notice to the Administrative
Agent, that a Borrowing Base Property and any related Collateral no longer be
included in calculations of the Borrowing Base and that such Property be
released from the Liens created by the applicable Security Documents, which
release (the "Property Release") shall be effected by the Administrative Agent
if the Administrative Agent determines all of the following conditions are
satisfied as of the date of such Property Release:
(a) the Borrower shall have delivered to the Administrative
Agent a certificate of a Responsible Officer certifying that no Default
or Event of Default has occurred and is then continuing or will occur
after giving effect to such Property Release and the reduction in the
Borrowing Base by reason of the release of such Borrowing Base
Property;
(b) the Borrower shall have delivered to the Administrative
Agent a Borrowing Base Report reflecting the Borrowing Base for the
most recent fiscal quarter for which financial statements are available
assuming such Property Release occurred on the first day of such
period;
(c) the Borrower shall have delivered to the Administrative
Agent all documents and instruments reasonably requested by the
Administrative Agent in connection with such Property Release
including, without limitation, the following as applicable:
(i) any instrument to be used to effect such Property
Release; and
(ii) an appropriate endorsement to the mortgagee
title insurance policy, if any, in effect with respect to the
affected Borrowing Base Property (and appropriate corrective
endorsements with respect to any other mortgagee policies of
title insurance on Borrowing Base Properties which have tie-in
clauses which are affected by the release); and
(d) the Administrative Agent shall have determined that the
Total Extensions of Credit will not exceed the Borrowing Base after
giving effect to such Property Release and any prepayment to be made
and/or the acceptance of any replacement Subject Property pursuant to
Section 4.1, which is to be given concurrently with such Property
Release as an additional or replacement Borrowing Base Property.
4.3 Frequency of Calculations of Borrowing Base. On the
Closing Date, the Borrowing Base shall be the amount set forth as such in the
Borrowing Base Report delivered under Section 6.1(s). Thereafter, the Borrowing
Base shall be the amount set forth as such in the Borrowing Base Certificate
most recently delivered under Section 4.2(b), Section 6.3(h) and Section 7.2(f).
Any increase in the Borrowing Base Value of a Borrowing Base Property shall
become effective as of the date on which the next Borrowing Base Report is
delivered pursuant to Section 6.3(h) or Section 7.2(f), provided that, prior to
such date of determination (a) the
44
applicable Borrowing Base Report substantiates such increase and if such
increase is the result of an increase in the Appraised Value of such Property,
the Required Lenders shall have given their written approval of such increase,
and (b) if the Recordation Date has occurred, the Borrower delivers to the
Administrative Agent the following: (i) if the Property is not located in a
Tie-In Jurisdiction, an endorsement to the title insurance policy in favor of
the Administrative Agent with respect to such Property increasing the coverage
amount thereof as related to such Property to not less than 100% of the
Borrowing Base Value of such Property and (ii) if the Property is located in a
Tie-In Jurisdiction, an endorsement to the title insurance policy in favor of
the Administrative Agent with respect to such Property increasing the coverage
amount thereof as related to such Property to not less than the Borrowing Base
Value of such Property, as well as endorsements to all other existing title
insurance policies issued to the Administrative Agent with respect to all other
Properties located in Tie-In Jurisdictions reflecting an increase in the
aggregate insured amount under the "tie-in" endorsements to an amount equal to
the aggregate amount of the Borrowing Base Values of all such Properties
(including the Property which experienced the increase in Borrowing Base Value)
but in no event in an amount in excess of the aggregate amount of the
Commitments.
4.4 Appraisals Required by Governmental Authorities. If under
FIRREA or required by any other Governmental Authority, a Lender is required to
obtain an Appraisal of any Borrowing Base Property, whether or not subject to a
Mortgage and whether or not in addition to any other Appraisal previously
obtained with respect to such Property pursuant to this Agreement, the
Administrative Agent shall have the right to cause such an Appraisal to be
prepared at the Borrower's cost and expense. The Borrowing Base Value of such
Property shall only be redetermined as a result of delivery of any such new
Appraisal if any Governmental Authority requires such redetermination, in which
case such Borrowing Base Value shall be redetermined in the manner required by
such Governmental Authority.
4.5 Recording of Mortgages.
(a) Generally. Any Security Document, except a Mortgage (or
other document customarily recorded in the applicable land records), delivered
pursuant to Section 6.3, the Escrow Agreement or otherwise, may be recorded by
the Administrative Agent upon its delivery to the Administrative Agent. No
Mortgage delivered pursuant to Section 6.3, the Escrow Agreement or otherwise
shall be recorded prior to the Recordation Date. On and after the Recordation
Date, the Administrative Agent shall cause all Mortgages to be recorded upon the
delivery of such Mortgages pursuant to Section 6.3, the Escrow Agreement or
otherwise.
(b) Required Deliveries. If the Mortgages may be recorded as
provided in Section 4.5(a), the Borrower shall, at its sole cost and expense,
deliver to the Administrative Agent no later than 90 days following (x) in the
event that the Recordation Date occurs due to an increase in the Borrowing Base
Leverage Ratio, the date the Borrowing Base Leverage Ratio first equals or
exceeds 0.55 to 1.00 or (y) in the event that the Recordation Date occurs due to
an Event of Default, the date such Event of Default occurred, as the case may
be, each of the following documents with respect to each Subject Property
subject to a Mortgage, all in form and substance satisfactory to the
Administrative Agent:
45
(i) an ALTA 1992 Form mortgagee's Policy of Title
Insurance (with deletion of the creditor's rights exclusion
and deletion of the mandatory arbitration provision) or other
form acceptable to the Administrative Agent in favor of the
Administrative Agent for the benefit of the Secured Parties
with respect to such Property, including endorsements with
respect to such items of coverage as the Administrative Agent
may request (and which endorsements are available in the
applicable state), in a coverage amount equal to no less than
100% of the Borrowing Base Value of such Property (excluding
the value of any personal property located at such Property),
issued by a title insurance company acceptable to the
Administrative Agent and with coinsurance or reinsurance (with
direct access agreements) with title insurance companies
acceptable to the Administrative Agent, showing the fee simple
title to (or a valid leasehold interest in) the land and
improvements described in the applicable Mortgage as vested in
the applicable Loan Party, and insuring that the Lien granted
by such Mortgage is a valid first priority Lien against such
Property, subject only to Liens permitted by Sections 8.3(b)
through (e);
(ii) copies of all documents of record reflected in
Schedule B of such Policy of Title Insurance;
(iii) a current or currently certified survey dated
within 12 months of the date of the filing of such Mortgage,
certified by a surveyor licensed in the jurisdiction where
such Property is located to have been prepared in accordance
with the then effective Minimum Standard Detail Requirements
for ALTA/ACSM Land Title Surveys, and if not adequately
covered by the survey certification, a certificate from a
licensed engineer or other professional satisfactory to the
Administrative Agent that such Property is not located in a
Special Flood Hazard Area as defined by the Federal Insurance
Administration; provided, with respect to any survey dated
more than 30 days prior to the date of the filing of such
Mortgage, such survey shall be accompanied by an affidavit
from the Borrower stating that there has been no changes to
the Property or improvements thereto since the date of such
survey; provided, further, in any case such survey shall be
such that title insurance issued described in clause (i) with
respect to such Property does not contain an exception for a
current and accurate survey;
(iv) UCC, tax, judgment and lien search reports with
respect to the applicable Loan Party and such Property subject
to a Mortgage in all necessary or appropriate jurisdictions
and under all legal and appropriate trade names indicating
that there are no Liens of record on such Property or any of
the Collateral relating thereto other than Liens permitted by
Section 8.3;
(v) an opinion of counsel admitted to practice law in
the jurisdiction in which such Property is located and
acceptable to the Administrative Agent, addressed to the
Administrative Agent and each Lender covering such legal
matters relating to the transactions contemplated hereby as
the Administrative Agent may reasonably request;
46
(vi) an opinion or counsel admitted to practice law
in the jurisdiction in which the applicable Loan Party is
formed and acceptable to the Administrative Agent, addressed
to the Administrative Agent and each Lender covering such
legal matters relating to the formation and existence and
power of the Person executing documents, and the due
authorization, execution and delivery of the Security
Documents and other documents for consummating the
transactions contemplated hereby as the Administrative Agent
may reasonably request;
(vii) a "Phase I" environmental assessment of such
Property not more than 12 months old prepared by an
environmental engineering firm acceptable to the
Administrative Agent, and any additional environmental studies
or assessments recommended by such assessment (including any
"Phase II" assessment) or otherwise available to the Borrower
performed with respect to such Property;
(viii) an Appraisal with respect to such Property;
and
(ix) such other due diligence materials, instruments,
documents, agreements, financing statements, certificates and
opinions as the Administrative Agent may reasonably request.
(c) Mortgage Filing Tax. If the Mortgages may be recorded
pursuant to Section 4.5(a), the Borrower shall pay to the Administrative Agent
an amount equal to any mortgage, recording or documentary filing or similar tax
required to be paid in connection with delivery or filing of such Mortgages
within two Business Days after demand therefor.
(d) No Borrowings, Etc. If the Mortgages may be recorded as a
result of Borrowing Base Leverage Ratio equaling or exceeding 0.55 to 1.00, the
Borrower may not request any Loans or Letters of Credit until such time as all
of the Mortgages have been recorded and all of the items required to be
delivered pursuant to Section 4.5(b) shall have been delivered.
(e) Subsequent Release. Once a Mortgage has been recorded, the
Collateral thereunder shall be released only in accordance with the terms
otherwise provided herein and therein, without regard to the Borrowing Base
Leverage Ratio.
4.6 Status of Escrowed Documents. Notwithstanding anything to
the contrary in this agreement or any other Loan Document, each party hereto
acknowledges and agrees that the Mortgages relating to the Borrowing Base
Properties located in the State of Florida are subject to the Escrow Agreement
and accordingly, shall not be deemed delivered to the Administrative Agent
except as provided therein.
SECTION 5. REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into this
Agreement and to make the Loans and issue or participate in the Letters of
Credit, the REIT and the Borrower hereby jointly and severally represent and
warrant to each Agent and each Lender that:
47
5.1 Financial Condition. (a) The unaudited pro forma
consolidated balance sheet of the REIT and its consolidated Subsidiaries as at
September 30, 2004 (including the notes thereto) (the "Pro Forma Balance
Sheet"), copies of which have heretofore been furnished to each Lender, has been
prepared giving effect (as if such events had occurred on such date) to (i) the
consummation of the Transactions, (ii) the Loans to be made on the Closing Date
and the use of proceeds thereof and (iii) the payment of fees and expenses in
connection with the foregoing. The Pro Forma Balance Sheet has been prepared
based on the best information available to the REIT as of the date of delivery
thereof, and presents fairly on a pro forma basis the estimated financial
position of the REIT and its consolidated Subsidiaries as at September 30, 2004,
assuming that the events specified in the preceding sentence had actually
occurred at such date.
(b) The audited consolidated balance sheets of the Borrower
and its consolidated Subsidiaries as at December 31, 2001, December 31, 2002 and
December 31, 2003, and the related consolidated statements of income and of cash
flows for the fiscal years ended on such dates, reported on by and accompanied
by an unqualified report from Deloitte & Touche LLP, copies of which have
heretofore been furnished to each Lender, present fairly the consolidated
financial condition of the Borrower and its consolidated Subsidiaries as at such
date, and the consolidated results of its operations and its consolidated cash
flows for the respective fiscal years then ended. The unaudited consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at June 30,
2004, and the related unaudited consolidated statements of income and cash flows
for the six-month period ended on such date, copies of which have heretofore
been furnished to each Lender, present fairly the consolidated financial
condition of the REIT and its consolidated Subsidiaries as at such date, and the
consolidated results of its operations and its consolidated cash flows for the
nine-month period then ended (subject to normal year-end audit adjustments). All
such financial statements, including the related schedules and notes thereto,
have been prepared in accordance with GAAP applied consistently throughout the
periods involved (except as approved by the aforementioned firm of accountants
and disclosed therein). The REIT, the Borrower and its Subsidiaries do not have
any material Guarantee Obligations, contingent liabilities and liabilities for
taxes, or any long-term leases or unusual forward or long-term commitments,
including, without limitation, any interest rate or foreign currency swap or
exchange transaction or other obligation in respect of derivatives, that are not
reflected in the most recent financial statements referred to in this paragraph.
During the period from December 31, 2003 to and including the date hereof there
has been no Disposition by the REIT or any of its Subsidiaries of any material
part of its business or Property.
5.2 No Change. Since December 31, 2003 there has been no
development or event that has had or could reasonably be expected to have a
Material Adverse Effect.
5.3 Corporate Existence; Compliance with Law. Each of the
REIT, the Borrower and its Subsidiaries (a) is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization, (b)
has the corporate power and authority, and the legal right, to own and operate
its Property, to lease the Property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation or other organization and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of Property or the conduct
of its business requires such
48
qualification and (d) is in compliance with all Requirements of Law except to
the extent that the failure to comply therewith could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
5.4 Corporate Power; Authorization; Enforceable Obligations.
Each Loan Party has the corporate power and authority, and the legal right, to
make, deliver and perform the Loan Documents to which it is a party, to
consummate the Transactions and, in the case of the Borrower, to borrow
hereunder. Each Loan Party has taken all necessary corporate or other action to
authorize the execution, delivery and performance of the Loan Documents to which
it is a party, to consummate the Transactions and, in the case of the Borrower,
to authorize the borrowings on the terms and conditions of this Agreement. No
consent or authorization of, filing with, notice to or other act by or in
respect of, any Governmental Authority or any other Person is required in
connection with the consummation of the Transactions, the borrowings hereunder
or the execution, delivery, performance, validity or enforceability of this
Agreement or any of the other Loan Documents, except (i) consents,
authorizations, filings and notices described in Schedule 5.4, which consents,
authorizations, filings and notices have been obtained or made and are in full
force and effect and (ii) the filings referred to in Section 5.19. Each Loan
Document (other than the Mortgages subject to the Escrow Agreement) has been
duly executed and delivered on behalf of each Loan Party that is a party
thereto. This Agreement constitutes, and each other Loan Document (other than
the Mortgages subject to the Escrow Agreement) upon execution will constitute, a
legal, valid and binding obligation of each Loan Party that is a party thereto,
enforceable against each such Loan Party in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law). Each of the Mortgages
subject to the Escrow Agreement has been duly executed on behalf of each Loan
Party that is a party thereto, and upon the delivery of such Mortgage in
accordance with the terms of the Escrow Agreement, will constitute a legal,
valid and binding obligation of each Loan Party that is party thereto,
enforceable against each such Loan Party in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principals (whether
enforcement is sought by proceedings in equity or at law).
5.5 No Legal Bar. The execution, delivery and performance of
this Agreement and the other Loan Documents, the consummation of the
Transactions, the issuance of Letters of Credit, the borrowings hereunder and
the use of the proceeds thereof will not violate any Requirement of Law or any
Contractual Obligation of the REIT, the Borrower or any of its Subsidiaries and
will not result in, or require, the creation or imposition of any Lien on any of
their respective properties or revenues pursuant to any Requirement of Law or
any such Contractual Obligation (other than the Liens created by the Security
Documents). No Requirement of Law or Contractual Obligation applicable to the
Borrower or any of its Subsidiaries could reasonably be expected to have a
Material Adverse Effect.
5.6 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the REIT or the Borrower, threatened by or against the REIT,
the Borrower or any of its Subsidiaries or
49
against any of their respective properties or revenues (a) with respect to any
of the Loan Documents or any of the transactions contemplated hereby or thereby,
or (b) that could reasonably be expected to have a Material Adverse Effect.
5.7 No Default. Neither the REIT, the Borrower nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect that could reasonably be expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.
5.8 Ownership of Property; Liens. Each of the REIT, the
Borrower and its Subsidiaries has title in fee simple to, or a valid leasehold
interest in, all its real property, and good title to, or a valid leasehold
interest in, all its other Property, and none of such Property is subject to any
Lien except as permitted by Section 8.3.
5.9 Intellectual Property. The REIT, the Borrower and each of
its Subsidiaries owns, or is licensed to use, all Intellectual Property
necessary for the conduct of its business as currently conducted. No material
claim has been asserted and is pending by any Person challenging or questioning
the use of any Intellectual Property or the validity or effectiveness of any
Intellectual Property, nor does the REIT or the Borrower know of any valid basis
for any such claim. The use of Intellectual Property by the REIT, the Borrower
and its Subsidiaries does not infringe on the rights of any Person in any
material respect.
5.10 Taxes. Each of the REIT, the Borrower and each of its
Subsidiaries has filed or caused to be filed all Federal, state and other
material tax returns that are required to be filed and has paid all taxes shown
to be due and payable on said returns or on any assessments made against it or
any of its Property and all other taxes, fees or other charges imposed on it or
any of its Property by any Governmental Authority (other than any the amount or
validity of which are currently being contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with GAAP have been
provided on the books of the REIT, the Borrower or its Subsidiaries, as the case
may be); and no tax Lien has been filed, and, to the knowledge of the REIT and
the Borrower, no claim is being asserted, with respect to any such tax, fee or
other charge.
5.11 Federal Regulations. No part of the proceeds of any
Loans, and no other extensions of credit hereunder, will be used for
"purchasing" or "carrying" any "margin stock" within the respective meanings of
each of the quoted terms under Regulation U as now and from time to time
hereafter in effect or for any purpose that violates the provisions of the
Regulations of the Board. If requested by any Lender or the Administrative
Agent, the Borrower will furnish to the Administrative Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR Form
G-3 or FR Form U-1 referred to in Regulation U.
5.12 Labor Matters. There are no strikes or other labor
disputes against the REIT, the Borrower or any of its Subsidiaries pending or,
to the knowledge of the REIT or the Borrower, threatened that (individually or
in the aggregate) could reasonably be expected to have a Material Adverse
Effect. Hours worked by and payment made to employees of the REIT, the Borrower
and its Subsidiaries have not been in violation of the Fair Labor Standards Act
or any other applicable Requirement of Law dealing with such matters that
(individually or in the aggregate) could reasonably be expected to have a
Material Adverse Effect. All payments due from the REIT, the Borrower or any of
its Subsidiaries on account of employee health and welfare insurance that
(individually or in the
50
aggregate) could reasonably be expected to have a Material Adverse Effect if not
paid have been paid or accrued as a liability on the books of the REIT, the
Borrower or the relevant Subsidiary.
5.13 ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
each Plan has complied in all material respects with the applicable provisions
of ERISA and the Code. No termination of a Single Employer Plan has occurred,
and no Lien in favor of the PBGC or a Plan has arisen, during such five-year
period. The present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits by a material amount. Neither the Borrower nor any
Commonly Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan that has resulted or could reasonably be expected to result
in a material liability under ERISA, and neither the Borrower nor any Commonly
Controlled Entity would become subject to any material liability under ERISA if
the Borrower or any such Commonly Controlled Entity were to withdraw completely
from all Multiemployer Plans as of the valuation date most closely preceding the
date on which this representation is made or deemed made. No such Multiemployer
Plan is in Reorganization or Insolvent.
5.14 Investment Company Act; Other Regulations. No Loan Party
is an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
No Loan Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) that limits its ability to incur Indebtedness.
5.15 Subsidiaries. (a) The Subsidiaries listed on Schedule
5.15 constitute all the Subsidiaries of the Borrower at the date hereof.
Schedule 5.15 sets forth as of the Closing Date the name and jurisdiction of
incorporation of each Subsidiary and, as to each Subsidiary, the percentage of
each class of Capital Stock owned by each Loan Party and whether such subsidiary
is a Material Subsidiary.
(b) There are no outstanding subscriptions, options, warrants,
calls, rights or other agreements or commitments (other than stock options
granted to employees or directors and directors' qualifying shares) of any
nature relating to any Capital Stock of the REIT, the Borrower or any
Subsidiary.
5.16 Use of Proceeds. The proceeds of the Loans and the
Letters of Credit shall be used (i) to make acquisitions permitted by Section
8.7 and (ii) for general corporate purposes.
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5.17 Environmental Matters. Other than exceptions to any of
the following that could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect:
(a) The Borrower and its Subsidiaries: (i) are, and within the
period of all applicable statutes of limitation have been, in
compliance with all applicable Environmental Laws; (ii) hold all
Environmental Permits (each of which is in full force and effect)
required for any of their current or intended operations or for any
property owned, leased, or otherwise operated by any of them; (iii)
are, and within the period of all applicable statutes of limitation
have been, in compliance with all of their Environmental Permits; and
(iv) reasonably believe that: each of their Environmental Permits will
be timely renewed and complied with, without material expense; any
additional Environmental Permits that may be required of any of them
will be timely obtained and complied with, without material expense;
and compliance with any Environmental Law that is or is expected to
become applicable to any of them will be timely attained and
maintained, without material expense.
(b) Materials of Environmental Concern are not present at, on,
under, in, or about any real property now or formerly owned, leased or
operated by the Borrower or any of its Subsidiaries, or at any other
location (including, without limitation, any location to which
Materials of Environmental Concern have been sent for re-use or
recycling or for treatment, storage, or disposal) which could
reasonably be expected to (i) give rise to liability of the Borrower or
any of its Subsidiaries under any applicable Environmental Law or
otherwise result in costs to the Borrower or any of its Subsidiaries,
or (ii) interfere with the Borrower's or any of its Subsidiaries'
continued operations, or (iii) impair the fair saleable value of any
real property owned or leased by the Borrower or any of its
Subsidiaries.
(c) There is no judicial, administrative, or arbitral
proceeding (including any notice of violation or alleged violation)
under or relating to any Environmental Law to which the Borrower or any
of its Subsidiaries is, or to the knowledge of the Borrower or any of
its Subsidiaries will be, named as a party that is pending or, to the
knowledge of the Borrower or any of its Subsidiaries, threatened.
(d) Neither the Borrower nor any of its Subsidiaries has
received any written request for information, or been notified that it
is a potentially responsible party under or relating to the federal
Comprehensive Environmental Response, Compensation, and Liability Act
or any similar Environmental Law, or with respect to any Materials of
Environmental Concern.
(e) Neither the Borrower nor any of its Subsidiaries has
entered into or agreed to any consent decree, order, or settlement or
other agreement, or is subject to any judgment, decree, or order or
other agreement, in any judicial, administrative, arbitral, or other
forum for dispute resolution, relating to compliance with or liability
under any Environmental Law.
52
(f) Neither the Borrower nor any of its Subsidiaries has
assumed or retained, by contract or operation of law, any liabilities
of any kind, fixed or contingent, known or unknown, under any
Environmental Law or with respect to any Material of Environmental
Concern.
5.18 Accuracy of Information, etc. No statement or information
contained in this Agreement, any other Loan Document, the Confidential
Information Memorandum or any other document, certificate or statement furnished
to the Administrative Agent or the Lenders or any of them, by or on behalf of
any Loan Party for use in connection with the transactions contemplated by this
Agreement or the other Loan Documents, contained as of the date such statement,
information, document or certificate was so furnished (or, in the case of the
Confidential Information Memorandum, as of the date of this Agreement), any
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements contained herein or therein not misleading. The
projections and pro forma financial information contained in the materials
referenced above are based upon good faith estimates and assumptions believed by
management of the Borrower to be reasonable at the time made, it being
recognized by the Lenders that such financial information as it relates to
future events is not to be viewed as fact and that actual results during the
period or periods covered by such financial information may differ from the
projected results set forth therein by a material amount. There is no fact known
to any Loan Party that could reasonably be expected to have a Material Adverse
Effect that has not been expressly disclosed herein, in the other Loan
Documents, in the Confidential Information Memorandum or in any other documents,
certificates and statements furnished to the Agents and the Lenders for use in
connection with the transactions contemplated hereby and by the other Loan
Documents.
5.19 Security Documents. (a) The Guarantee and Collateral
Agreement is effective to create in favor of the Administrative Agent, for the
benefit of the Secured Parties, a legal, valid and enforceable security interest
in the Collateral described therein and proceeds thereof. In the case of the
Pledged Stock described in the Guarantee and Collateral Agreement, when any
stock certificates representing such Pledged Stock are delivered to the
Administrative Agent, and in the case of the other Collateral described in the
Guarantee and Collateral Agreement, when financing statements in appropriate
form are filed in the offices specified on Schedule 5.19(a)-1 (which financing
statements have been duly completed and delivered to the Administrative Agent)
and such other filings as are specified on Schedule 3 to the Guarantee and
Collateral Agreement have been completed (all of which filings have been duly
completed), the Guarantee and Collateral Agreement shall constitute a fully
perfected Lien on, and security interest in, all right, title and interest of
the Loan Parties in such Collateral and the proceeds thereof, as security for
the Obligations (as defined in the Guarantee and Collateral Agreement), in each
case prior and superior in right to any other Person (except, in the case of
Collateral other than Pledged Stock, Liens permitted by Section 8.3). Schedule
5.19(a)-2 lists each UCC Financing Statement that (i) names any Loan Party as
debtor and (ii) will remain on file after the Closing Date. Schedule 5.19(a)-3
lists each UCC Financing Statement that (i) names any Loan Party as debtor and
(ii) will be terminated on or prior to the Closing Date; and on or prior to the
Closing Date, the Borrower will have delivered to the Administrative Agent, or
caused to be filed, duly completed UCC termination statements in respect of each
UCC Financing Statement listed in Schedule 5.19(a)-3.
53
(b) Each of the Mortgages is effective to create in favor of
the Administrative Agent, for the benefit of the Secured Parties, a legal, valid
and enforceable Lien on the Borrowing Base Properties described therein and
proceeds thereof; and when the Mortgages are filed in the offices specified on
Schedule 5.19(b) (in the case of the Mortgages to be executed and delivered to
the Administrative Agent or to be subject to the Escrow Agreement on the Closing
Date) or in the recording office designated by the Borrower (in the case of any
Mortgage to be executed and delivered to the Administrative Agent pursuant to
Section 6.3 or to be subject to the Escrow Agreement), each Mortgage shall
constitute a fully perfected Lien on, and security interest in, all right, title
and interest of the Loan Parties in the Borrowing Base Properties described
therein and the proceeds thereof, as security for the Obligations (as defined in
the relevant Mortgage), in each case prior and superior in right to any other
Person (other than Persons holding Liens or other encumbrances or rights
permitted by the relevant Mortgage). Schedule 1.1B lists, as of the Closing
Date, each parcel of owned real property and each leasehold interest in real
property located in the United States and held by the Borrower or any of its
Subsidiaries.
5.20 Solvency. Each Loan Party is, and after giving effect to
the Transactions and the incurrence of all Indebtedness and obligations being
incurred in connection herewith and therewith will be and will continue to be,
Solvent.
5.21 REIT Status; Borrower Tax Status; Listing. The REIT has
been organized and will be operated in a manner that will allow it to qualify
for REIT Status commencing with the year ending December 31, 2004 and has
maintained and will maintain REIT Status on a continuous basis since such date.
The Borrower is not an association taxable as a corporation under the Code. The
shares of common stock of the REIT are listed on the New York Stock Exchange.
5.22 Regulation H. No Mortgage encumbers improved real
property which is located in an area that has been identified by the Secretary
of Housing and Urban Development as an area having special flood hazards and in
which flood insurance has been made available under the National Flood Insurance
Act of 1968 (except any Mortgaged Properties as to which such flood insurance as
required by Regulation H has been obtained and is in full force and effect as
required by this Agreement).
SECTION 6. CONDITIONS PRECEDENT
6.1 Conditions to Initial Extension of Credit. The agreement
of each Lender to make the initial extension of credit requested to be made by
it hereunder is subject to the satisfaction, prior to or concurrently with the
making of such extension of credit on the Closing Date, of the following
conditions precedent:
(a) Loan Documents. The Administrative Agent shall have
received (i) this Agreement, executed and delivered by a duly
authorized officer of the REIT and the Borrower, (ii) the Guarantee and
Collateral Agreement, executed and delivered by a duly authorized
officer of the REIT, the Borrower and each Material Subsidiary, (iii)
the Escrow Agreement, executed and delivered by a duly authorized
officer of the REIT, the
54
Borrower, the Subsidiary Guarantors and the Escrow Agent and (iv) a
Lender Addendum executed and delivered by each Lender and accepted by
the Borrower.
(b) The Transactions.
(i) The Restructuring. The Restructuring shall have
been consummated pursuant to documentation reasonably
satisfactory to the Administrative Agent.
(ii) IPO. The REIT shall have received gross proceeds
of at least $400,000,000 from the IPO and shall have
contributed such proceeds in cash as common equity to the
Borrower.
(iii) CMBS Financing. The Borrower and its
Subsidiaries shall have received gross proceeds of at least
$270,000,000 from the CMBS Financing pursuant to documentation
reasonably satisfactory to the Administrative Agent.
(iv) Capital Structure. The capital structure of each
Loan Party after the giving effect to the Transactions shall
be satisfactory in all respects.
(c) Termination of Existing Indebtedness. The Administrative
Agent shall have received evidence satisfactory to the Administrative
Agent that the existing Indebtedness described on Schedule 6.1(c) shall
be simultaneously terminated, all amounts thereunder shall be
simultaneously paid in full and arrangements satisfactory to the
Administrative Agent shall have been made for the termination of Liens
and security interests granted in connection therewith.
(d) Pro Forma Balance Sheet; Financial Statements. The Lenders
shall have received (i) the Pro Forma Balance Sheet, (ii) audited
consolidated financial statements of the Borrower and its Subsidiaries
for the 2001, 2002 and 2003 fiscal years, (iii) unaudited interim
consolidated financial statements of the Borrower and its Subsidiaries
for each fiscal quarterly period ended subsequent to the date of the
latest applicable financial statements delivered pursuant to clause
(ii) of this paragraph as to which such financial statements are
available and (iv) monthly management reports of the Borrower and its
Subsidiaries for July 2004, August 2004 and September 2004; and such
financial statements and reports shall not, in the reasonable judgment
of the Lenders, reflect any material adverse change in the consolidated
financial condition of the Borrower and its Subsidiaries, as reflected
in the financial statements or projections contained in the
Confidential Information Memorandum.
(e) Approvals. All governmental and third party approvals
(including landlords' and other consents) necessary in connection with
the Transactions, the continuing operations of the REIT, the Borrower
and its Subsidiaries and the transactions contemplated hereby shall
have been obtained and be in full force and effect, and all applicable
waiting periods shall have expired without any action being taken or
threatened by any competent authority that would restrain, prevent or
otherwise impose adverse conditions on the Transactions or the
financing contemplated hereby.
55
(f) Related Agreements. The Administrative Agent shall have
received (in a form reasonably satisfactory to the Administrative
Agent), true and correct copies, certified as to authenticity by the
Borrower, of (i) all documentation related to the Restructuring and the
CMBS Financing and (ii) such other documents or instruments as may be
reasonably requested by the Administrative Agent, including, without
limitation, a copy of any debt instrument, security agreement or other
material contract to which the Loan Parties may be a party.
(g) Fees. The Lenders, the Administrative Agent and the
Arrangers shall have received all fees required to be paid, and all
expenses for which invoices have been presented (including reasonable
fees, disbursements and other charges of counsel to the Agents), on or
before the Closing Date. All such amounts will be paid with proceeds of
Loans made on the Closing Date and will be reflected in the funding
instructions given by the Borrower to the Administrative Agent on or
before the Closing Date.
(h) Solvency Analysis. The Lenders shall have received a
reasonably satisfactory solvency analysis certified by the chief
financial officer of the Borrower which shall document the solvency of
the Borrower and its Subsidiaries considered as a whole after giving
effect to the transactions contemplated hereby.
(i) Budget. The Lenders shall have received a budget for the
Borrower and its Subsidiaries for the 2005 fiscal year.
(j) Lien Searches. The Administrative Agent shall have
received the results of a recent lien search in each of the
jurisdictions in which Uniform Commercial Code financing statement or
other filings or recordations should be made to evidence or perfect
security interests in all assets of the Loan Parties, and such search
shall reveal no liens on any of the assets of the Loan Party, except
for Liens permitted by Section 8.3.
(k) Environmental Matters. The Administrative Agent shall have
received, with a copy for each Lender, a written environmental audit
regarding the real property of the Borrower and its Subsidiaries
included in the Borrowing Base on the Closing Date, prepared by an
environmental consultant acceptable to the Administrative Agent, in
form, scope, and substance satisfactory to the Administrative Agent,
together with a letter from the environmental consultant permitting the
Agents and the Lenders to rely on the environmental audit as if
addressed to and prepared for each of them.
(l) Expenses. The Administrative Agent shall have received
satisfactory evidence that the fees and expenses to be incurred in
connection with the Restructuring, the IPO and the financing thereof
shall not exceed $45,000,000.
(m) Closing Certificate. The Administrative Agent shall have
received a certificate of each Loan Party, dated the Closing Date,
substantially in the form of Exhibit C, with appropriate insertions and
attachments.
(n) Legal Opinion. The Administrative Agent shall have
received the executed legal opinion of Xxxxx & Xxxxxxx L.L.P., counsel
to the REIT, the Borrower and its Subsidiaries, substantially in the
form of Exhibit F. Such legal opinion shall cover
56
such other matters incident to the transactions contemplated by this
Agreement as the Administrative Agent may reasonably require and shall
be addressed to the Administrative Agent and the Lenders.
(o) Pledged Stock; Stock Powers; Acknowledgment and Consent;
Pledged Notes. The Administrative Agent shall have received (i) the
certificates representing the shares of Capital Stock pledged pursuant
to the Guarantee and Collateral Agreement, together with an undated
stock power for each such certificate executed in blank by a duly
authorized officer of the pledgor thereof, (ii) an Acknowledgment and
Consent, substantially in the form of Annex II to the Guarantee and
Collateral Agreement, duly executed by any issuer of Capital Stock
pledged pursuant to the Guarantee and Collateral Agreement that is not
itself a party to the Guarantee and Collateral Agreement and (iii) each
promissory note pledged pursuant to the Guarantee and Collateral
Agreement endorsed (without recourse) in blank (or accompanied by an
executed transfer form in blank satisfactory to the Administrative
Agent) by the pledgor thereof.
(p) Filings, Registrations and Recordings. Each document
(including, without limitation, any Uniform Commercial Code financing
statement) required by the Security Documents or under law or
reasonably requested by the Administrative Agent to be filed,
registered or recorded in order to create in favor of the
Administrative Agent, for the benefit of the Secured Parties, a
perfected Lien on the Collateral described therein, prior and superior
in right to any other Person (other than with respect to Liens
expressly permitted by Section 8.3), shall have been filed, registered
or recorded or shall have been delivered to the Administrative Agent be
in proper form for filing, registration or recordation.
(q) Insurance. The Administrative Agent shall have received
insurance certificates satisfying the requirements of Section 5.3 of
the Guarantee and Collateral Agreement.
(r) PATRIOT Act. The Lenders shall have received, sufficiently
in advance of the Closing Date, all documentation and other information
required by bank regulatory authorities under applicable "know your
customer" and anti-money laundering rules and regulations, including
without limitation the United States PATRIOT Act.
(s) Borrowing Base. The Borrowing Base availability shall not
be less than $100,000,000 on the Closing Date, and the Administrative
Agent shall have received a satisfactory pro forma Borrowing Base
Report for the period of two fiscal quarters ending immediately prior
to the Closing Date for which financial statements are available after
giving effect to the Transactions.
(t) Senior Managers. The Lenders shall be satisfied that
senior managers acceptable to them shall be available to manage the
Borrower and its Subsidiaries.
(u) Liquidity. The Lenders shall be satisfied with the
sufficiency of amounts available under the Facility to meet the ongoing
working capital needs of the Borrower
57
and its Subsidiaries following the Transactions and the consummation of
the other transactions contemplated hereby.
6.2 Conditions to Each Extension of Credit. The agreement of
each Lender to make any extension of credit requested to be made by it hereunder
on any date (including, without limitation, its initial extension of credit) is
subject to the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by any Loan Party in or pursuant to
the Loan Documents shall be true and correct in all material respects
on and as of such date as if made on and as of such date.
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
extensions of credit requested to be made on such date.
(c) Borrowing Base. Subject to Section 4.5(e), the then Total
Extensions of Credit, when added to the amount requested for such
borrowing, shall not exceed the Borrowing Base set forth in the most
recent Borrowing Base Report delivered pursuant to Sections 4.2(b),
6.1(s), 6.3(h) or 7.2(f), as the case may be.
Each borrowing by and issuance of a Letter of Credit on behalf
of the Borrower hereunder shall constitute a representation and warranty by the
Borrower as of the date of such extension of credit that the conditions
contained in this Section 6.2 and in Section 6.3 have been satisfied.
6.3 Conditions to Borrowing Base Properties. The agreement of
each Lender to include any Subject Property as a Borrowing Base Property is
subject to the satisfaction of the following conditions precedent:
(a) Compliance with Section 4.1. (i) The Administrative Agent
shall have received all documents and instruments required to be
delivered pursuant to Section 4.1 and (ii) the Required Lenders shall
have approved of such Property as provided in, and to the extent
required by, Section 4.1.
(b) Mortgage. The Administrative Agent shall have received a
Mortgage covering such Property, executed and delivered by a duly
authorized officer of the applicable Loan Party, with such
modifications as appropriate to conform to the laws of the jurisdiction
in which such Property is located and, if such Subject Property is to
be included in the Borrowing Base on and after the Recordation Date, an
amount equal to any mortgage filing tax required to be paid in
connection with the filing of such Mortgage.
(c) Environmental Indemnity Agreement. The Administrative
Agent shall have received an Environmental Indemnity Agreement covering
such Property, executed and delivered by a duly authorized officer of
the applicable Loan Party.
58
(d) Collateral Assignment of Contracts. To the extent
requested by the Administrative Agent, the Administrative Agent shall
have received collateral assignments of all material contracts and any
other rights or benefits of such Property, relating to the use,
occupancy, operation, maintenance, enjoyment or ownership of such
Property.
(e) Subordination of Property Management Agreement. To the
extent requested by the Administrative Agent, the Administrative Agent
shall have received a subordination agreement with respect to any
Property Management Agreement to which such Property is subject,
executed by the applicable property manager.
(f) Lien Searches. The Administrative Agent shall have
received satisfactory UCC, tax, judgment and lien search reports with
respect to the applicable Loan Party and such Property in all necessary
or appropriate jurisdictions and under all legal and appropriate trade
names indicating that there are no Liens of record on such Property or
any of the Collateral relating thereto other than Liens permitted by
Section 8.3(b) through (e).
(g) Environmental Reports. The Administrative Agent shall have
received a satisfactory "Phase I" environmental assessment of such
Property not more than 12 months old (or such earlier date approved by
the Administrative Agents) prepared by an environmental engineering
firm acceptable to the Administrative Agent, and any additional
environmental studies or assessments recommended by such assessment
(including any "Phase II" assessment) or otherwise available to the
Borrower performed with respect to such Property.
(h) Borrowing Base Report. The Administrative Agent shall have
received a Borrowing Base Report calculated giving effect to the
inclusion of such Property as a Borrowing Base Property as of the end
of the most recent fiscal quarter for which financial statements are
available.
(i) Legal Opinions. The Administrative Agent shall have
received the following executed legal opinions:
(i) an opinion of counsel admitted to practice law in
the jurisdiction in which such Property is located and
acceptable to the Administrative Agent, addressed to the
Administrative Agent and each Lender covering such legal
matters relating to the transactions contemplated hereby as
the Administrative Agent may reasonably request, in form and
substance reasonably satisfactory to the Administrative Agent;
and
(ii) an opinion of counsel admitted to practice law
in the jurisdiction in which the applicable Loan Party is
formed and acceptable to the Administrative Agent, addressed
to the Administrative Agent and each Lender covering such
legal matters relating to the formation and existence and
power of the Person executing documents, and the due
authorization, execution and delivery of the Security
Documents and other documents for consummating the
transactions
59
contemplated hereby as the Administrative Agent may reasonably
request, in form and substance reasonably satisfactory to the
Administrative Agent.
(j) Insurance. The Administrative Agent shall have received
satisfactory evidence that the insurance required for such Property
pursuant to Section 5.3 of the Guarantee and Collateral Agreement is
then in effect.
(k) Certificates of Occupancy. The Administrative Agent shall
have received final certificates of occupancy relating to such
Property, if in the possession of the Borrower.
(l) Title Insurance; Surveys. The Administrative Agent shall
have received and be satisfied with:
(i) if such Subject Property is to be added as a new
Borrowing Base Property prior to the Recordation Date, each of
the following:
(A) a copy of the most recent ALTA Owner's
Policy of Title Insurance (or if such policy has not
been issued, a binding commitment to issue such
policy) relating to such Property available to the
Borrower showing the fee simple title to (or a valid
leasehold interest in) such Property as vested in the
applicable Loan Party, subject only to such
restrictions, encumbrances, easements and
reservations as are acceptable to the Agent, together
with copies of all documents of record reflected in
Schedule B of such Policy of Title Insurance; and
(B) the most current survey of such Property
then available to the Borrower, certified by a
surveyor licensed in the jurisdiction where such
Property is located to have been prepared in
accordance with the then effective Minimum Standard
Detail Requirements for ALTA/ACSM Land Title Surveys,
and if not adequately covered by the survey
certification, a certificate from a licensed engineer
or other professional satisfactory to the Agent that
such Property is not located in a Special Flood
Hazard Area as defined by the Federal Insurance
Administration; and
(ii) if such Subject Property is to be added as a new
Borrowing Base Property after the Recordation Date, each of
the following:
(A) an ALTA 1992 Form mortgagee's Policy of
Title Insurance (with deletion of the creditor's
rights exclusion and deletion of the mandatory
arbitration provision) or other form acceptable to
the Administrative Agent in favor of the
Administrative Agent for the benefit of the Secured
Parties with respect to such Property, including
endorsements with respect to such items of coverage
as the Administrative Agent may request (and which
endorsements are available in the applicable state),
in a coverage amount equal to no less than 100% of
the Borrowing Base Value of such Property (excluding
the value of any personal property located at such
Property), issued by a title insurance
60
company acceptable to the Administrative Agent and
with coinsurance or reinsurance (with direct access
agreements) with title insurance companies acceptable
to the Administrative Agent, showing the fee simple
title to (or a valid leasehold interest in) the land
and improvements described in the applicable Mortgage
as vested in the Borrower or a Subsidiary, and
insuring that the Lien granted by such Mortgage is a
valid first priority Lien against such Property,
subject only to Liens permitted by Sections 8.3(b)
through (e);
(B) copies of all documents of record
reflected in Schedule B of such Policy of Title
Insurance;
(C) a current or currently certified survey
of such Property certified to the Administrative
Agent and the Lender by a surveyor licensed in the
jurisdiction where such Property is located to have
been prepared in accordance with the then effective
Minimum Standard Detail Requirements for ALTA/ACSM
Land Title Surveys, and if not adequately covered by
the survey certification, a certificate from a
licensed engineer or other professional satisfactory
to the Administrative Agent that such Property is not
located in a Special Flood Hazard Area as defined by
the Federal Insurance Administration; and
(D) if such Property is located in a
Tie-In-Jurisdiction, endorsements to all other
existing title insurance policies issued to the
Administrative Agent with respect to all other
Properties located in Tie-In Jurisdictions reflecting
an increase in the aggregate insured amount under the
"tie-in" endorsements to an amount equal to the
aggregate amount of the Borrowing Base Values of all
such Properties (including the Property to be
included as a Borrowing Base Property) but in no
event in an amount in excess of the aggregate amount
of the Commitments.
(m) Zoning. After the Recordation Date, the Administrative
Agent shall have received satisfactory evidence that such Property complies with
applicable zoning and land use laws.
(n) Other Information. The Administrative Agent have received
such other due diligence materials, instruments, documents, agreements,
financing statements, certificates, opinions and other Security Documents as the
Administrative Agent may reasonably request, in form and substance reasonably
satisfactory to the Administrative Agent.
SECTION 7. AFFIRMATIVE COVENANTS
The REIT and the Borrower hereby jointly and severally agree
that, so long as the Commitments remain in effect, any Letter of Credit remains
outstanding or any Loan or other amount is owing to any Lender or any Agent
hereunder, each of the REIT and the Borrower shall and shall cause each of its
Subsidiaries to:
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7.1 Financial Statements. Furnish to the Administrative Agent
and each Lender:
(a) as soon as available, but in any event within 90 days (or
such earlier date specified for annual reports under Section 13 of the
Exchange Act) after the end of each fiscal year of the REIT, a copy of
the audited consolidated balance sheet of the REIT and its consolidated
Subsidiaries as at the end of such year and the related audited
consolidated statements of income and of cash flows for such year,
setting forth in each case in comparative form the figures as of the
end of and for the previous year, reported on without a "going concern"
or like qualification or exception, or qualification arising out of the
scope of the audit, by Deloitte & Touche LLP or other independent
certified public accountants of nationally recognized standing; and
(b) as soon as available, but in any event not later than 45
days (or such earlier date specified for quarterly reports under
Section 13 of the Exchange Act) after the end of each of the first
three quarterly periods of each fiscal year of the REIT, the unaudited
consolidated balance sheet of the REIT and its consolidated
Subsidiaries as at the end of such quarter and the related unaudited
consolidated statements of income and of cash flows for such quarter
and the portion of the fiscal year through the end of such quarter,
setting forth in each case in comparative form the figures as of the
end of and for the corresponding period in the previous year, certified
by a Responsible Officer as being fairly stated in all material
respects (subject to normal year-end audit adjustments).
all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
7.2 Certificates; Other Information. Furnish to each Agent and
each Lender, or, in the case of clause (j), to the relevant Lender:
(a) concurrently with the delivery of the financial statements
referred to in Section 7.1(a), a certificate of the independent
certified public accountants reporting on such financial statements
stating that in making the examination necessary therefor no knowledge
was obtained of any Default or Event of Default, except as specified in
such certificate (it being understood that such certificate shall be
limited to the items that independent certified public accountants are
permitted to cover in such certificates pursuant to their professional
standards and customs of the profession);
(b) concurrently with the delivery of any financial statements
pursuant to Section 7.1, (i) a certificate of a Responsible Officer
stating that, to the best of such Responsible Officer's knowledge, each
Loan Party during such period has observed or performed all of its
covenants and other agreements, and satisfied every condition,
contained in this Agreement and the other Loan Documents to which it is
a party to be observed, performed or satisfied by it, and that such
Responsible Officer has obtained no knowledge of any Default or Event
of Default except as specified in such certificate and (ii) in the case
of quarterly or annual financial statements, (x) a Compliance
Certificate
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containing all information and calculations necessary for determining
compliance by the REIT, the Borrower and its Subsidiaries with the
provisions of this Agreement referred to therein as of the last day of
the fiscal quarter or fiscal year of the Borrower, as the case may be,
and (y) any UCC financing statements or other filings specified in such
Compliance Certificate as being required to be delivered therewith;
(c) as soon as available, and in any event no later than 45
days after the end of each fiscal year of the Borrower, a detailed
consolidated budget for the following fiscal year (including a
projected consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of the following fiscal year, and the
related consolidated statements of projected cash flow, projected
changes in financial position and projected income and a description of
the underlying assumptions applicable thereto), and, as soon as
available, significant revisions, if any, of such budget and
projections with respect to such fiscal year (collectively, the
"Projections"), which Projections shall in each case be accompanied by
a certificate of a Responsible Officer stating that such Projections
are based on reasonable estimates, information and assumptions and that
such Responsible Officer has no reason to believe that such Projections
are incorrect or misleading in any material respect;
(d) within 45 days after the end of each fiscal quarter of the
Borrower, a narrative discussion and analysis of the financial
condition and results of operations of the Borrower and its
Subsidiaries for such fiscal quarter and for the period from the
beginning of the then current fiscal year to the end of such fiscal
quarter, as compared to the portion of the Projections covering such
periods and to the comparable periods of the previous year;
(e) within five days after the same are sent, copies of all
financial statements and reports that the REIT or the Borrower sends to
the holders of any class of its debt securities or public equity
securities and, within five days after the same are filed, copies of
all financial statements and reports that the REIT or the Borrower may
make to, or file with, the SEC;
(f) no later than the 45th day of each fiscal quarter, a
Borrowing Base Report, as of the last day of the immediately preceding
fiscal quarter, provided that, with respect to the fourth quarter of
each fiscal year of the Borrower, concurrently with the delivery of the
financial statements referred to in Section 7.1(a), the Borrower shall
deliver to the Administrative Agent an updated Borrowing Base Report as
of the last day of such fiscal quarter, together with calculations
demonstrating differences, if any, from the Borrowing Base Report
previously delivered for such quarter with supporting detail reasonably
satisfactory to the Administrative Agent;
(g) concurrently with the delivery of each Borrowing Base
Report, a compliance certificate duly executed by the chief financial
officer or treasurer of the general partner of the Borrower containing
all information and calculations necessary for determining the
Borrowing Base Leverage Ratio;
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(h) promptly after the occurrence thereof, notice of the
failure of the REIT to maintain REIT Status or of any existing
Subsidiary of the REIT to maintain its status as a qualified REIT
subsidiary under the Code, if and to the extent required by applicable
law;
(i) promptly (x) after any Borrowing Base Property shall be
damaged or destroyed and the reasonably estimated cost of repair or
replacement thereof would exceed $500,000, notice of such damage or
destruction and the reasonably estimated cost of repair or replacement
thereof and (y) upon obtaining knowledge of the institution of any
proceedings for the condemnation of any Borrowing Base Property, or any
material portion thereof, notice of such proceedings with a copy of all
documentation received by the Borrower or any of its Subsidiaries in
connection therewith and the reasonably estimated proceeds of such
proceedings; and
(j) promptly, such additional financial and other information
as any Lender may from time to time reasonably request.
7.3 Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its material obligations of whatever nature (including without
limitation, taxes), except where the amount or validity thereof is currently
being contested in good faith by appropriate proceedings and reserves in
conformity with GAAP with respect thereto have been provided on the books of the
REIT, the Borrower or its Subsidiaries, as the case may be.
7.4 Conduct of Business and Maintenance of Existence;
Compliance. (a)(i) Preserve, renew and keep in full force and effect its
organizational existence and (ii) take all reasonable action to maintain all
rights, privileges and franchises necessary or desirable in the normal conduct
of its business, except, in each case, as otherwise permitted by Section 8.4 and
except, in the case of clause (ii) above, to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect; and (b)
comply with all Contractual Obligations and Requirements of Law, except to the
extent that failure to comply therewith could not, in the aggregate, reasonably
be expected to have a Material Adverse Effect.
7.5 Maintenance of Property; Insurance. (a) Keep all Property
and systems useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted and (b) maintain with financially
sound and reputable insurance companies insurance on all its Property in at
least such amounts and against at least such risks (but including in any event
public liability, product liability and business interruption) as are usually
insured against in the same general area by companies engaged in the same or a
similar business, including any insurance required by any Mortgage subject to
the Escrow Agreement or any other Security Mortgage.
7.6 Inspection of Property; Books and Records; Discussions.
(a) Keep proper books of records and account in which full, true and correct
entries in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities and (b)
permit representatives of any Lender to visit and inspect any of its properties
and examine and make abstracts from any of its books and records at any
reasonable time and as often as may reasonably be desired during normal business
hours and to discuss the
64
business, operations, properties and financial and other condition of the REIT,
the Borrower and its Subsidiaries with officers and employees of the REIT, the
Borrower and its Subsidiaries and with its independent certified public
accountants, provided that, so long as no Event of Default has occurred and is
continuing, the Borrower shall only be required to pay the expense of the
Administrative Agent with respect to one such visit and inspection per calendar
year.
7.7 Notices. Promptly give notice to the Administrative Agent
and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the REIT, the Borrower or any of its Subsidiaries or (ii)
litigation, investigation or proceeding which may exist at any time
between the REIT, the Borrower or any of its Subsidiaries and any
Governmental Authority, that in either case, if not cured or if
adversely determined, as the case may be, could reasonably be expected
to have a Material Adverse Effect;
(c) any litigation or proceeding affecting the REIT, the
Borrower or any of its Subsidiaries (i) in which the amount involved is
$250,000 or more and not covered by insurance, (ii) in which injunctive
or similar relief is sought or (iii) which relates to any Loan
Document;
(d) the following events, as soon as possible and in any event
within 30 days after the Borrower knows or has reason to know thereof:
(i) the occurrence of any Reportable Event with respect to any Plan, a
failure to make any required contribution to a Plan, the creation of
any Lien in favor of the PBGC or a Plan or any withdrawal from, or the
termination, Reorganization or Insolvency of, any Multiemployer Plan or
(ii) the institution of proceedings or the taking of any other action
by the PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the
termination, Reorganization or Insolvency of, any Plan;
(e) as soon as possible and in any event within 30 days of
obtaining knowledge thereof: (i) any development, event, or condition
that, individually or in the aggregate with other developments, events
or conditions, could reasonably be expected to result in the payment by
the Borrower and its Subsidiaries, in the aggregate, of a Material
Environmental Amount; and (ii) any notice that any governmental
authority may deny any application for an Environmental Permit sought
by, or revoke or refuse to renew any Environmental Permit held by, the
Borrower; and
(f) any development or event that has had or could reasonably
be expected to have a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the REIT, the Borrower or the relevant Subsidiary
proposes to take with respect thereto.
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7.8 Environmental Laws. (a) Comply in all material respects
with, and ensure compliance in all material respects by all tenants and
subtenants, if any, with, all applicable Environmental Laws, and obtain and
comply in all material respects with and maintain, and ensure that all tenants
and subtenants obtain and comply in all material respects with and maintain, any
and all licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws.
(b) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws.
7.9 Interest Rate Protection. In the case of the Borrower,
within 30 days after the Closing Date, enter into, and thereafter maintain for a
period of not less than three years, Hedge Agreements to the extent necessary to
provide that at least 50% of the aggregate principal amount of Consolidated
Total Debt is subject to either a fixed interest rate or interest rate
protection for a period of not less than three years, which Hedge Agreements
shall have terms and conditions reasonably satisfactory to the Administrative
Agent.
7.10 Additional Collateral, etc. (a) With respect to any
Property acquired after the Closing Date by the REIT, the Borrower or any
Material Subsidiary (other than (x) any real property, (y) any Property subject
to a Lien expressly permitted by Section 8.3(g) and (z) the Capital Stock of any
Excluded Foreign Subsidiary) as to which the Administrative Agent, for the
benefit of the Secured Parties, does not have a perfected Lien, promptly (i)
execute and deliver to the Administrative Agent such amendments to the Guarantee
and Collateral Agreement or such other documents as the Administrative Agent
deems necessary or advisable to grant to the Administrative Agent, for the
benefit of the Secured Parties, a security interest in such Property and (ii)
take all actions necessary or advisable to grant to the Administrative Agent,
for the benefit of the Secured Parties, a perfected first priority security
interest in such Property, including without limitation, the filing of Uniform
Commercial Code financing statements in such jurisdictions as may be required by
the Guarantee and Collateral Agreement or by law or as may be requested by the
Administrative Agent.
(b) With respect to any new Material Subsidiary created or
acquired after the Closing Date (which, for the purposes of this paragraph, may
include any existing Subsidiary that ceases to be an Excluded Foreign Subsidiary
or an Excluded Financing Subsidiary), by the REIT, the Borrower or any of its
Subsidiaries, promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement as the Administrative Agent
deems necessary or advisable to grant to the Administrative Agent, for the
benefit of the Secured Parties, a perfected first priority security interest in
the Capital Stock of such new Subsidiary that is owned by the REIT, the Borrower
or, to the extent not prohibited by the terms of Indebtedness permitted by
Section 8.2, any of its Subsidiaries, (ii) deliver to the Administrative Agent
the certificates representing such Capital Stock, together with undated stock
powers, in blank, executed and delivered by a duly authorized officer of the
REIT, the Borrower or such Subsidiary, as the case may be, (iii) cause such new
Subsidiary (A) to become a party to the Guarantee and Collateral Agreement and
(B) to take such actions necessary or advisable to grant to the Administrative
Agent for the benefit of the Secured Parties a perfected
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first priority security interest in the Collateral described in the Guarantee
and Collateral Agreement with respect to such new Subsidiary, including, without
limitation, the filing of Uniform Commercial Code financing statements in such
jurisdictions as may be required by the Guarantee and Collateral Agreement or by
law or as may be requested by the Administrative Agent, and (iv) if requested by
the Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
(c) With respect to any new Excluded Foreign Subsidiary
created or acquired after the Closing Date by the REIT, the Borrower or any
Material Subsidiary, promptly (i) execute and deliver to the Administrative
Agent such amendments to the Guarantee and Collateral Agreement or such other
documents as the Administrative Agent deems necessary or advisable in order to
grant to the Administrative Agent, for the benefit of the Secured Parties, a
perfected first priority security interest in the Capital Stock of such new
Subsidiary that is owned by the REIT, the Borrower or any Material Subsidiary
(other than any Excluded Foreign Subsidiaries), (provided that in no event shall
more than 65% of the total outstanding Capital Stock of any such new Excluded
Foreign Subsidiary be required to be so pledged), (ii) deliver to the
Administrative Agent the certificates representing such Capital Stock, together
with undated stock powers, in blank, executed and delivered by a duly authorized
officer of the REIT, the Borrower or such Subsidiary, as the case may be, and
take such other action as may be necessary or, in the opinion of the
Administrative Agent, desirable to perfect the Lien of the Administrative Agent
thereon, and (iii) if requested by the Administrative Agent, deliver to the
Administrative Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent.
7.11 Further Assurances. From time to time execute and
deliver, or cause to be executed and delivered, such additional instruments,
certificates or documents, and take such actions, as the Administrative Agent
may reasonably request for the purposes of implementing or effectuating the
provisions of this Agreement and the other Loan Documents, or of more fully
perfecting or renewing the rights of the Administrative Agent and the Lenders
with respect to the Collateral (or with respect to any additions thereto or
replacements or proceeds thereof or with respect to any other property or assets
hereafter acquired by the Borrower or any Subsidiary which may be deemed to be
part of the Collateral) pursuant hereto or thereto. Upon the exercise by the
Administrative Agent or any Lender of any power, right, privilege or remedy
pursuant to this Agreement or the other Loan Documents which requires any
consent, approval, recording, qualification or authorization of any Governmental
Authority, the Borrower will execute and deliver, or will cause the execution
and delivery of, all applications, certifications, instruments and other
documents and papers that the Administrative Agent or such Lender may be
required to obtain from the Borrower or any of its Subsidiaries for such
governmental consent, approval, recording, qualification or authorization.
7.12 Maintenance of Occupancy Rate. Maintain at all times an
average Occupancy Rate at least 75% for all Borrowing Base Properties (other
than Borrowing Base Properties with a Borrowing Base Value of $0 and Lease-Up
Properties).
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SECTION 8. NEGATIVE COVENANTS
The REIT and the Borrower hereby jointly and severally agree
that, so long as the Commitments remain in effect, any Letter of Credit remains
outstanding or any Loan or other amount is owing to any Lender or any Agent
hereunder, each of the REIT and the Borrower shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly:
8.1 Financial Condition Covenants.
(a) Consolidated Leverage Ratio. Permit the Consolidated
Leverage Ratio on any date to exceed 65%.
(b) Consolidated Interest Coverage Ratio. Permit the
Consolidated Interest Coverage Ratio for any period of two consecutive fiscal
quarters of the REIT to be less than 2.00 to 1.00.
(c) Consolidated Fixed Charge Coverage Ratio. Permit the
Consolidated Fixed Charge Coverage Ratio for any period of two consecutive
fiscal quarters of the REIT to be less than 1.70 to 1.00.
(d) Minimum Tangible Net Worth. Permit the Tangible Net Worth
of the REIT and its Subsidiaries determined on a consolidated basis in
accordance with GAAP on any date to be less than an amount equal to (x)
$400,000,000 plus (y) 85% of the Net Proceeds of any issuance of Capital Stock
consummated by the REIT or any of its Subsidiaries at any time after the Closing
Date.
(e) Minimum Borrowing Base Value. Permit the Borrowing Base to
be less than $100,000,000 at any time.
8.2 Limitation on Indebtedness. Create, incur, assume or
suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan
Document;
(b) Indebtedness of the Borrower to any Subsidiary and of any
Wholly Owned Subsidiary Guarantor to the Borrower or any other
Subsidiary;
(c) Indebtedness (including, without limitation, Capital Lease
Obligations) secured by Liens permitted by Section 8.3(g) in an
aggregate principal amount not to exceed $5,000,000 at any one time
outstanding;
(d) Indebtedness outstanding on the date hereof and listed on
Schedule 8.2(d);
(e) Guarantee Obligations made in the ordinary course of
business by the Borrower or any of its Subsidiaries of obligations of
the Borrower or any Subsidiary Guarantor; and
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(f) Indebtedness in respect of the Borrower and its
Subsidiaries secured by fee-owned or leasehold real property of the
Borrower and its Subsidiaries which is not subject to a Mortgage or
owned by a Loan Party, including the CMBS Financing and any extensions
or renewals or restructurings (including any restructuring that may be
required by the lender thereunder) thereof and of the Indebtedness
permitted by Section 8.2(d), provided that, with respect to any such
Indebtedness (other than Indebtedness permitted by Section 8.2(d) and
the CMBS Financing, in each case, as in effect on the date hereof) (x)
such Indebtedness shall not mature prior to _______, 2009(1), (y) none
of the REIT, the Borrower or any of its Subsidiaries provides credit
support of any kind (including any undertaking, agreement or instrument
that would constitute Indebtedness) or is directly or indirectly liable
(as guarantor or otherwise), other than as primary obligor or, in the
case of the Borrower as guarantor on terms no less favorable than those
set forth on Schedule 8.2(f), and (z) as to which the lenders
thereunder will not have any recourse to the Capital Stock or assets of
the Borrower, the Borrower or any of its Subsidiaries other than the
asset financed by such Indebtedness, additions, accessions and
improvements thereto and proceeds thereof and, in the case of the
Borrower, recourse on terms no less favorable than those set forth on
Schedule 8.2(f).
8.3 Limitation on Liens. Create, incur, assume or suffer to
exist any Lien upon any of its Property, whether now owned or hereafter
acquired, except for:
(a) Liens for taxes not yet due or that are being contested in
good faith by appropriate proceedings, provided that adequate reserves
with respect thereto are maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business that are not overdue for a period of more than 30 days or that
are being contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business that, in the
aggregate, are not substantial in amount and that do not in any case
materially detract from the value of the Property subject thereto or
materially interfere with the ordinary conduct of the business of the
Borrower or any of its Subsidiaries;
----------
(1) Date that is six months after fourth anniversary of the Closing Date.
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(f) Liens in existence on the date hereof listed on Schedule
8.3(f), securing Indebtedness permitted by Section 8.2(d), provided
that no such Lien is spread to cover any additional Property after the
Closing Date and that the amount of Indebtedness secured thereby is not
increased;
(g) Liens securing Indebtedness of the Borrower or any other
Subsidiary incurred pursuant to Section 8.2(c) to finance the
acquisition of fixed or capital assets, provided that (i) such Liens
shall be created substantially simultaneously with the acquisition of
such fixed or capital assets, (ii) such Liens do not at any time
encumber any Property other than the Property financed by such
Indebtedness, (iii) the amount of Indebtedness secured thereby is not
increased and (iv) the amount of Indebtedness initially secured thereby
is not less than 80%, or more than 100% of the purchase price of such
fixed or capital asset;
(h) Liens created pursuant to the Security Documents;
(i) Liens on fee-owned property of the Borrower and its
Subsidiaries not subject to a Mortgage securing Indebtedness permitted
by Section 8.2(f); and
(j) any interest or title of a lessor under any lease entered
into by the Borrower or any other Subsidiary in the ordinary course of
its business and covering only the assets so leased.
8.4 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or Dispose of all or substantially all
of its Property or business, except that:
(a) any Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (provided that the Borrower
shall be the continuing or surviving corporation) or with or into any
Wholly Owned Subsidiary Guarantor (provided that (i) the Wholly Owned
Subsidiary Guarantor shall be the continuing or surviving corporation
or (ii) simultaneously with such transaction, the continuing or
surviving corporation shall become a Wholly Owned Subsidiary Guarantor
and the Borrower shall comply with Section 7.10 in connection
therewith); and
(b) any Subsidiary of the Borrower may Dispose of any or all
of its assets (upon voluntary liquidation or otherwise) to the Borrower
or any Subsidiary Guarantor.
8.5 Limitation on Disposition of Property. Dispose of any of
its Property (including, without limitation, receivables and leasehold
interests), whether now owned or hereafter acquired, or, in the case of any
Subsidiary, issue or sell any shares of such Subsidiary's Capital Stock to any
Person, except:
(a) the Disposition of obsolete or worn out property in the
ordinary course of business;
(b) Dispositions permitted by Section 8.4(b);
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(c) the sale or issuance of any Subsidiary's Capital Stock to
the Borrower or any Subsidiary Guarantor; and
(d) the Disposition in any fiscal year of the Borrower of
other assets having an aggregate book value not to exceed an amount
equal to 10% of Consolidated Total Asset Value as of the end of the
immediately preceding fiscal year, provided that, immediately prior to
and after giving effect to any such Disposition, no Default or Event of
Default shall have occurred and be continuing.
8.6 Limitation on Restricted Payments. Declare or pay any
dividend on, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any Capital Stock of the REIT, the Borrower
or any Subsidiary, whether now or hereafter outstanding, or make any other
distribution in respect thereof, either directly or indirectly, whether in cash
or property or in obligations of the REIT, the Borrower or any Subsidiary, or
enter into any derivatives or other transaction with any financial institution,
commodities or stock exchange or clearinghouse (a "Derivatives Counterparty")
obligating the REIT, the Borrower or any Subsidiary to make payments to such
Derivatives Counterparty as a result of any change in market value of any such
Capital Stock (collectively, "Restricted Payments"), except that:
(a) any Subsidiary may make Restricted Payments to the
Borrower or any Subsidiary Guarantor;
(b) the REIT may make Restricted Payments in the form of
common stock of the REIT;
(c) the Borrower may pay dividends to the REIT to permit the
REIT to pay corporate overhead expenses incurred in the ordinary course
of business not to exceed $12,000,000 in any fiscal year; and
(d) the Borrowers and all such Subsidiaries may make
Restricted Payments to the REIT, and the REIT may make Restricted
Payments, during any period specified below in an aggregate amount
equal to the greater of:
(i) (A) for the quarter ending December 31, 2004,
$11,200,000;
(B) for the quarter ending on March 31, 2005,
110% of Funds From Operations for such period;
(C) for the two quarter period ending on June
30, 2005, 107% of Funds From Operations for such
period;
(D) for the three quarter period ending on
September 30, 2005, 105% of Funds From Operations for
such period;
(E) for the four quarter period ending on
December 31, 2005, 100% of Funds From Operations for
such period; and
(F) for any four quarter period ending on or
after March 31, 2006, 95% of Funds From Operations
for such period;
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(ii) such amount as may be necessary to maintain REIT
Status,
provided that, in each case, immediately prior to, and after giving
effect to, any such Restricted Payment, no Default or Event of Default
shall have occurred and be continuing.
8.7 Limitation on Investments. Make any advance, loan,
extension of credit (by way of guaranty or otherwise) or capital contribution
to, or purchase any Capital Stock, bonds, notes, debentures or other debt
securities of, or any assets constituting an ongoing business from, or make any
other investment in, any other Person (all of the foregoing, "Investments"),
except:
(a) extensions of trade credit in the ordinary course of
business;
(b) Investments in Cash Equivalents;
(c) Investments arising in connection with the incurrence of
Indebtedness permitted by Section 8.2(b), (e) and (f);
(d) Investments (other than those relating to the incurrence
of Indebtedness permitted by Section 8.7(c)) by the REIT, the Borrower
or any of its Subsidiaries in the Borrower or any Person that, prior to
such Investment, is a Subsidiary Guarantor;
(e) Investments in partnerships, joint ventures and other
Persons which are not corporations and which Investments are accounted
for on an equity basis in accordance with GAAP with an aggregate book
value for any fiscal quarter of the Borrower not exceeding an amount
equal to 12.5% of Consolidated Total Asset Value for the fiscal quarter
most recently ended for which financial statements are available;
(f) Investments permitted by Section 8.15; and
(g) Investments to acquire the Capital Stock of a Subsidiary
or any other Person who, after giving effect to such acquisition would
be a Subsidiary, so long as in each case, (i) immediately prior to such
Investment, and after giving effect thereto, no Default or Event of
Default is or would be in existence, (ii) such Person is in similar
line of business as those businesses in which the Borrower and its
Subsidiaries are engaged on as of the date hereof and (iii) to the
extent not previously satisfied, the terms and
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conditions of Section 7.10 have been satisfied substantially
contemporaneously with such acquisition.
8.8 Limitation on Transactions with Affiliates. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of Property, the rendering of any service or the payment of any
management, advisory or similar fees, with any Affiliate (other than the REIT,
the Borrower or any Subsidiary Guarantor) unless such transaction is (a)
otherwise permitted under this Agreement, (b) in the ordinary course of business
of the REIT, the Borrower or such Subsidiary, as the case may be, and (c) upon
fair and reasonable terms no less favorable to the REIT, the Borrower or such
Subsidiary, as the case may be, than it would obtain in a comparable arm's
length transaction with a Person that is not an Affiliate.
8.9 Limitation on Sales and Leasebacks. Enter into any
arrangement with any Person providing for the leasing by the REIT, the Borrower
or any Subsidiary of real or personal property which has been or is to be sold
or transferred by the REIT, the Borrower or such Subsidiary to such Person or to
any other Person to whom funds have been or are to be advanced by such Person on
the security of such property or rental obligations of the REIT, the Borrower or
such Subsidiary.
8.10 Limitation on Changes in Fiscal Periods. Permit the
fiscal year of the Borrower to end on a day other than December 31 or change the
Borrower's method of determining fiscal quarters.
8.11 Limitation on Negative Pledge Clauses. Enter into or
suffer to exist or become effective any agreement that prohibits or limits the
ability of the REIT, the Borrower or any Material Subsidiary to create, incur,
assume or suffer to exist any Lien upon any of its Property or revenues, whether
now owned or hereafter acquired, to secure the Obligations or, in the case of
any guarantor, its obligations under the Guarantee and Collateral Agreement,
other than (a) this Agreement and the other Loan Documents, (b) any agreements
governing any purchase money Liens, Capital Lease Obligations otherwise
permitted hereby (in which case, any prohibition or limitation shall only be
effective against the assets financed thereby) and (c) with respect to
limitations on the pledge of the Capital Stock of (x) any Excluded Financing
Subsidiary, any agreements governing Indebtedness permitted by Sections 8.2(d)
and 8.2(f) and (y) any direct or indirect parent of such Excluded Financing
Subsidiary, any agreements governing Indebtedness permitted by Sections 8.2(d)
and 8.2(f) (as in effect on the Closing Date or pursuant to any extension,
renewal or restructuring thereof permitted by Section 8.2(f)).
8.12 Limitation on Restrictions on Subsidiary Distributions.
Enter into or suffer to exist or become effective any consensual encumbrance or
restriction on the ability of any Subsidiary to (a) make Restricted Payments in
respect of any Capital Stock of such Subsidiary held by, or pay any Indebtedness
owed to, the Borrower or any other Subsidiary, (b) make Investments in the
Borrower or any other Subsidiary or (c) transfer any of its assets to the
Borrower or any other Subsidiary, except for such encumbrances or restrictions
existing under or by reason of (i) any restrictions existing under the Loan
Documents and (ii) any restrictions with respect to a Subsidiary imposed
pursuant to an agreement that has been entered into in connection with the
Disposition of all or substantially all of the Capital Stock or assets of such
Subsidiary.
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8.13 Limitation on Lines of Business. Enter into any business,
either directly or through any Subsidiary, except for those businesses in which
the Borrower and its Subsidiaries are engaged on the date of this Agreement or
that are reasonably related thereto.
8.14 Limitation on Subject Property and Ground Leases. Make
any Investment in real property, or own or otherwise become liable in respect
of:
(a) unimproved real estate with an aggregate book value
exceeding an amount equal to 5% of Consolidated Total Asset Value for
the fiscal quarter most recently ended;
(b) real property under construction, including, without
limitation, real property to be acquired by the Borrower or any of its
Subsidiaries upon the completion of construction pursuant to a contract
in which the seller of such real property is required to complete
construction prior to, and as a condition precedent to, such
acquisition, such that the Construction Budget for all such real
property at any time exceeds an amount equal to 10% of Consolidated
Total Asset Value for the fiscal quarter most recently ended; and
(c) real property leased by the Borrower or any of its
Subsidiaries pursuant to a ground lease, such that the total revenues
with respect to all such real property at any time exceeds an amount
equal to 5% of the total revenues of the Borrower on a consolidated
basis for the fiscal quarter most recently ended;
provided that, the aggregate value of all the Investments referred to in Section
8.7(e) and this Section 8.14 shall not at any time exceed 20% of Consolidated
Total Asset Value for the fiscal quarter most recently ended for which financial
statements are available.
8.15 Special Covenants Relating to the REIT. With respect to
the REIT:
(a) make any disposition of or encumber, pledge or
hypothecate, whether directly or indirectly, all or any portion of its
interest in the Borrower or any Subsidiary at any time or any rights to
distributions or dividends therefrom other than to the Borrower or a
Wholly-Owned Subsidiary, other than any pledges of equity interests
pursuant to the Security Documents in connection with this Agreement;
(b) fail for any reason whatsoever, whether voluntarily or
involuntarily, either directly or through one or more Wholly-Owned
Subsidiaries of the REIT, to be the sole general partner of the
Borrower at any time;
(c) cease to have its common stock listed on the New York
Stock Exchange, the American Stock Exchange, or the Nasdaq Stock
Exchange; or
(d) cease to have REIT Status or fail to comply with the
requirements of the Code relating to qualified REIT subsidiaries in
respect of its ownership of any Subsidiary of the REIT to the extent
required under the Code and applicable law.
8.16 Taxation of the Borrower. In the case of the Borrower,
become an association taxable as a corporation and not be taxed as a partnership
under the Code.
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8.17 Limitation on Hedge Agreements. Enter into any Hedge
Agreement other than Hedge Agreements entered into in the ordinary course of
business, and not for speculative purposes, to protect against changes in
interest rates or foreign exchange rates.
SECTION 9. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) the Borrower shall fail to pay any principal of any Loan
or Reimbursement Obligation when due in accordance with the terms
hereof; or the Borrower shall fail to pay any interest on any Loan or
Reimbursement Obligation, or any other amount payable hereunder or
under any other Loan Document, within five days after any such interest
or other amount becomes due in accordance with the terms hereof or
thereof; or
(b) any representation or warranty made or deemed made by any
Loan Party herein or in any other Loan Document or that is contained in
any certificate, document or financial or other statement furnished by
it at any time under or in connection with this Agreement or any such
other Loan Document shall prove to have been inaccurate in any material
respect on or as of the date made or deemed made or furnished; or
(c) any Loan Party shall default in the observance or
performance of any agreement contained in clause (i) or (ii) of Section
7.4(a) (with respect to the REIT and the Borrower only), Section 7.7(a)
or Section 8, or in Section 5 of the Guarantee and Collateral
Agreement; or
(d) any Loan Party shall default in the observance or
performance of any other agreement contained in this Agreement or any
other Loan Document (other than as provided in paragraphs (a) through
(c) of this Section), and such default shall continue unremedied for a
period of 30 days; or
(e) the REIT, the Borrower or any of its Subsidiaries shall
(i) default in making any payment of any principal of any Indebtedness
(including, without limitation, any Guarantee Obligation, but excluding
the Loans and Reimbursement Obligations) on the scheduled or original
due date with respect thereto; or (ii) default in making any payment of
any interest on any such Indebtedness beyond the period of grace, if
any, provided in the instrument or agreement under which such
Indebtedness was created; or (iii) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or beneficiary of such
Indebtedness (or a trustee or agent on behalf of such holder or
beneficiary) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or to become
subject to a mandatory offer to purchase by the obligor thereunder or
(in the case of any such Indebtedness constituting a Guarantee
Obligation) to become payable; provided, that a default, event or
condition described in clause (i), (ii) or (iii) of this paragraph (e)
shall not at any time constitute an Event of Default unless, at such
time, one or more defaults, events or conditions of the type
75
described in clauses (i), (ii) and (iii) of this paragraph (e) shall
have occurred and be continuing with respect to Indebtedness the
outstanding principal amount of which exceeds in the aggregate
$10,000,000; or
(f) (i) the REIT, the Borrower or any of its Subsidiaries
shall commence any case, proceeding or other action (A) under any
existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to
it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any
substantial part of its assets, or the REIT, the Borrower or any of its
Subsidiaries shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against the REIT, the
Borrower or any of its Subsidiaries any case, proceeding or other
action of a nature referred to in clause (i) above that (A) results in
the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a
period of 60 days; or (iii) there shall be commenced against the REIT,
the Borrower or any of its Subsidiaries any case, proceeding or other
action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its
assets that results in the entry of an order for any such relief that
shall not have been vacated, discharged, or stayed or bonded pending
appeal within 60 days from the entry thereof; or (iv) the REIT, the
Borrower or any of its Subsidiaries shall take any action in
furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or
(iii) above; or (v) the REIT, the Borrower or any of its Subsidiaries
shall generally not, or shall be unable to, or shall admit in writing
its inability to, pay its debts as they become due; or
(g) (i) any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan, or any Lien in favor of the PBGC or a Plan
shall arise on the assets of the Borrower or any Commonly Controlled
Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is, in the reasonable opinion of the Required
Lenders, likely to result in the termination of such Plan for purposes
of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA, (v) the Borrower or any Commonly
Controlled Entity shall, or in the reasonable opinion of the Required
Lenders shall be likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan or (vi) any other event or condition shall occur or
exist with respect to a Plan; and in each case in clauses (i) through
(vi) above, such event or condition, together with all other such
events or conditions, if any, could, in the sole judgment of the
Required Lenders, reasonably be expected to have a Material Adverse
Effect; or
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(h) one or more judgments or decrees shall be entered against
the REIT, the Borrower or any of its Subsidiaries involving for the
REIT, the Borrower and its Subsidiaries taken as a whole a liability
(not paid or fully covered by insurance as to which the relevant
insurance company has acknowledged coverage) of $5,000,000 or more, and
all such judgments or decrees shall not have been vacated, discharged,
stayed or bonded pending appeal within 30 days from the entry thereof;
or
(i) any of the Security Documents shall cease, for any reason
(other than by reason of the express release thereof pursuant to
Section 11.15), to be in full force and effect, or any Loan Party or
any Affiliate of any Loan Party shall so assert, or any Lien created by
any of the Security Documents shall cease to be enforceable and of the
same effect and priority purported to be created thereby; or
(j) the guarantee contained in Section 2 of the Guarantee and
Collateral Agreement shall cease, for any reason (other than by reason
of the express release thereof pursuant to Section 11.15), to be in
full force and effect or any Loan Party or any Affiliate of any Loan
Party shall so assert; or
(k) any Change of Control shall occur;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including, without limitation, all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) shall immediately become due and payable, and (B) if such event is
any other Event of Default, either or both of the following actions may be
taken: (i) with the consent of the Required Lenders, the Administrative Agent
may, or upon the request of the Required Lenders, the Administrative Agent
shall, by notice to the Borrower declare the Commitments to be terminated
forthwith, whereupon the Commitments shall immediately terminate; and (ii) with
the consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Borrower, declare the Loans hereunder (with accrued interest thereon) and
all other amounts owing under this Agreement and the other Loan Documents
(including, without limitation, all amounts of L/C Obligations, whether or not
the beneficiaries of the then outstanding Letters of Credit shall have presented
the documents required thereunder) to be due and payable forthwith, whereupon
the same shall immediately become due and payable. In the case of all Letters of
Credit with respect to which presentment for honor shall not have occurred at
the time of an acceleration pursuant to this paragraph, the Borrower shall at
such time deposit in a cash collateral account opened by the Administrative
Agent an amount equal to the aggregate then undrawn and unexpired face amount of
such Letters of Credit. Amounts held in such cash collateral account shall be
applied by the Administrative Agent to the payment of drafts drawn under such
Letters of Credit, and the unused portion thereof after all such Letters of
Credit shall have expired or been fully drawn upon, if any, shall be applied to
repay other obligations of the Borrower hereunder and under the other Loan
Documents. After all such Letters of Credit shall have expired or been fully
drawn upon, all Reimbursement Obligations shall have been satisfied and all
other obligations of the Borrower
77
hereunder and under the other Loan Documents shall have been paid in full, the
balance, if any, in such cash collateral account shall be returned to the
Borrower (or such other Person as may be lawfully entitled thereto).
SECTION 10. THE AGENTS
10.1 Appointment. Each Lender hereby irrevocably designates
and appoints the Agents as the agents of such Lender under this Agreement and
the other Loan Documents, and each Lender irrevocably authorizes each Agent, in
such capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to such Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, no Agent shall have any duties or responsibilities,
except those expressly set forth herein, or any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against any Agent.
10.2 Delegation of Duties. Each Agent may execute any of its
duties under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
10.3 Exculpatory Provisions. Neither any Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates shall be
(i) liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Agreement or any other Loan Document
(except to the extent that any of the foregoing are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from its or such Person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any Loan Party or any officer thereof
contained in this Agreement or any other Loan Document or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Agents under or in connection with, this Agreement or any other Loan
Document or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document or for any failure
of any Loan Party to perform its obligations hereunder or thereunder. The Agents
shall not be under any obligation to any Lender to ascertain or to inquire as to
the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of any Loan Party.
10.4 Reliance by Agents. Each Agent shall be entitled to rely,
and shall be fully protected in relying, upon any instrument, writing,
resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Loan Parties), independent accountants and
other experts selected by
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such Agent. The Agents may deem and treat the payee of any Note as the owner
thereof for all purposes unless such Note shall have been transferred in
accordance with Section 11.6 and all actions required by such Section in
connection with such transfer shall have been taken. Each Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Required Lenders (or, if so specified by this Agreement, all Lenders or any
other instructing group of Lenders specified by this Agreement) as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense that may be incurred by it by reason
of taking or continuing to take any such action. Each Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this Agreement
and the other Loan Documents in accordance with a request of the Required
Lenders (or, if so specified by this Agreement, all Lenders or any other
instructing group of Lenders specified by this Agreement), and such request and
any action taken or failure to act pursuant thereto shall be binding upon all
the Lenders and all future holders of the Loans.
10.5 Notice of Default. No Agent shall be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless such Agent shall have received notice from a Lender, the REIT
or the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Administrative Agent shall receive such a notice, the Administrative Agent
shall give notice thereof to the Lenders. The Administrative Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders (or, if so specified by this
Agreement, all Lenders or any other instructing group of Lenders specified by
this Agreement); provided that unless and until the Administrative Agent shall
have received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.
10.6 Non-Reliance on Agents and Other Lenders. Each Lender
expressly acknowledges that neither any of the Agents nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates have made any representations or warranties to it and that no act by
any Agent hereafter taken, including any review of the affairs of a Loan Party
or any affiliate of a Loan Party, shall be deemed to constitute any
representation or warranty by any Agent to any Lender. Each Lender represents to
the Agents that it has, independently and without reliance upon any Agent or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their affiliates and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon any Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their affiliates. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
the Administrative Agent hereunder, no Agent shall have any duty or
responsibility to provide any Lender with any credit or other information
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concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Loan Party or any affiliate of
a Loan Party that may come into the possession of such Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.
10.7 Indemnification. The Lenders agree to indemnify each
Agent in its capacity as such (to the extent not reimbursed by the REIT or the
Borrower and without limiting the obligation of the REIT or the Borrower to do
so), ratably according to their respective Aggregate Exposure Percentages in
effect on the date on which indemnification is sought under this Section (or, if
indemnification is sought after the date upon which the Commitments shall have
terminated and the Loans shall have been paid in full, ratably in accordance
with such Aggregate Exposure Percentages immediately prior to such date), for,
and to save each Agent harmless from and against, any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever that may at any time
(including, without limitation, at any time following the payment of the Loans)
be imposed on, incurred by or asserted against such Agent in any way relating to
or arising out of, the Commitments, this Agreement, any of the other Loan
Documents or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by such Agent under or in connection with any of the foregoing; provided that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements that are found by a final and nonappealable decision
of a court of competent jurisdiction to have resulted from such Agent's gross
negligence or willful misconduct. The agreements in this Section shall survive
the payment of the Loans and all other amounts payable hereunder.
10.8 Agent in Its Individual Capacity. Each Agent and its
affiliates may make loans to, accept deposits from and generally engage in any
kind of business with any Loan Party as though such Agent were not an Agent.
With respect to its Loans made or renewed by it and with respect to any Letter
of Credit issued or participated in by it, each Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any Lender and
may exercise the same as though it were not an Agent, and the terms "Lender" and
"Lenders" shall include each Agent in its individual capacity.
10.9 Successor Administrative Agent. The Administrative Agent
may resign as Administrative Agent upon ten days' notice to the Lenders and the
Borrower. If the Administrative Agent shall resign as Administrative Agent under
this Agreement and the other Loan Documents, then the Required Lenders shall
appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under Section 9(a) or Section
9(f) with respect to the Borrower shall have occurred and be continuing) be
subject to approval by the Borrower (which approval shall not be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans. If no successor agent
has accepted appointment as Administrative
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Agent by the date that is ten days following a retiring Administrative Agent's
notice of resignation, the retiring Administrative Agent's resignation shall
nevertheless thereupon become effective, and the Lenders shall assume and
perform all of the duties of the Administrative Agent hereunder until such time,
if any, as the Required Lenders appoint a successor agent as provided for above.
The Syndication Agent may, at any time, by notice to the Lenders and the
Administrative Agent, resign as Syndication Agent hereunder, whereupon the
duties, rights, obligations and responsibilities of the Syndication Agent
hereunder shall automatically be assumed by, and inure to the benefit of, the
Administrative Agent, without any further act by the Syndication Agent, the
Administrative Agent or any Lender. After any retiring Agent's resignation as
Agent, the provisions of this Section 10 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement and the other Loan Documents.
10.10 Authorization to Release Liens and Guarantees. The
Administrative Agent is hereby irrevocably authorized by each of the Lenders to
effect any release of Liens or guarantee obligations contemplated by Section
11.15.
10.11 The Arrangers; the Syndication Agent. Neither the
Arrangers nor the Syndication Agent, in their respective capacities as such,
shall have any duties or responsibilities, nor shall any such Person incur any
liability, under this Agreement and the other Loan Documents.
SECTION 11. MISCELLANEOUS
11.1 Amendments and Waivers. Neither this Agreement or any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
Section 11.1. The Required Lenders and each Loan Party party to the relevant
Loan Document may, or (with the written consent of the Required Lenders) the
Administrative Agent and each Loan Party party to the relevant Loan Document
may, from time to time, (a) enter into written amendments, supplements or
modifications hereto and to the other Loan Documents (including amendments and
restatements hereof or thereof) for the purpose of adding any provisions to this
Agreement or the other Loan Documents or changing in any manner the rights of
the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on such
terms and conditions as may be specified in the instrument of waiver, any of the
requirements of this Agreement or the other Loan Documents or any Default or
Event of Default and its consequences; provided, however, that no such waiver
and no such amendment, supplement or modification shall:
(i) forgive the principal amount or extend the final scheduled
date of maturity of any Loan or Reimbursement Obligation, reduce the
stated rate of any interest or fee payable under this Agreement (except
(x) in connection with the waiver of applicability of any post-default
increase in interest rates (which waiver shall be effective with the
consent of the Required Lenders) and (y) that any amendment or
modification of defined terms used in the financial covenants in this
Agreement shall not constitute a reduction in the rate of interest or
fees for purposes of this clause (i)) or extend the scheduled date of
any payment thereof,
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or increase the amount or extend the expiration date of any Commitment
of any Lender, in each case without the consent of each Lender directly
affected thereby;
(ii) amend, modify or waive any provision of this Section or
reduce any percentage specified in the definition of Required Lenders,
consent to the assignment or transfer by the Borrower of any of its
rights and obligations under this Agreement and the other Loan
Documents, release all or substantially all of the Collateral or
release all or substantially all of the Subsidiary Guarantors from
their guarantee obligations under the Guarantee and Collateral
Agreement, in each case without the consent of all the Lenders;
(iii) amend, modify or waive any provision of Section 10, or
any other provision affecting the rights, duties or obligations of any
Agent, without the consent of any Agent directly affected thereby;
(iv) amend, modify or waive any provision of Section 2.13
without the consent of each Lender directly affected thereby;
(v) amend, modify or waive any provision of Section 3 without
the consent of each Issuing Lender affected thereby; or
(vi) impose restrictions on assignments and participations
that are more restrictive than, or additional to, those set forth in
Section 11.6.
Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Loan Parties, the
Lenders, the Agents and all future holders of the Loans. In the case of any
waiver, the Loan Parties, the Lenders and the Agents shall be restored to their
former position and rights hereunder and under the other Loan Documents, and any
Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon. Any such waiver,
amendment, supplement or modification shall be effected by a written instrument
signed by the parties required to sign pursuant to the foregoing provisions of
this Section; provided, that delivery of an executed signature page of any such
instrument by facsimile transmission shall be effective as delivery of a
manually executed counterpart thereof.
For the avoidance of doubt, this Agreement and any other Loan
Document may be amended (or amended and restated) with the written consent of
the Required Lenders, the Administrative Agent and each Loan Party to each
relevant Loan Document (x) to add one or more additional credit facilities to
this Agreement and to permit the extensions of credit from time to time
outstanding thereunder and the accrued interest and fees in respect thereof
(collectively, the "Additional Extensions of Credit") to share ratably in the
benefits of this Agreement and the other Loan Documents with the Extensions of
Credit and the accrued interest and fees in respect thereof and (y) to include
appropriately the Lenders holding such credit facilities in any determination of
the Required Lenders.
11.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise
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expressly provided herein, shall be deemed to have been duly given or made when
delivered, or three Business Days after being deposited in the mail, postage
prepaid, or, in the case of telecopy notice, when received, addressed (a) in the
case of the REIT, the Borrower and the Agents, as follows and (b) in the case of
the Lenders, as set forth in an administrative questionnaire delivered to the
Administrative Agent or on Schedule I to the Lender Addendum to which such
Lender is a party or, in the case of a Lender which becomes a party to this
Agreement pursuant to an Assignment and Acceptance, in such Assignment and
Acceptance or (c) in the case of any party, to such other address as such party
may hereafter notify to the other parties hereto:
The REIT:
U-Store-It Trust
0000 Xxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxx Xxxxxx, President and Chief
Financial Officer
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
with a copy to: Xxxxx & Xxxxxxx, L.L.P.
0000 Xxxxxxxxxx Xxxxx
Xxxxx 0000
XxXxxx, Xxxxxxxx 00000
Attention: Xxx X. Xxxxxx, Esq.
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
The Borrower: U-Store-It, L.P.
0000 Xxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxx Xxxxxx, President and Chief
Financial Officer
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
with a copy to: Xxxxx & Xxxxxxx, L.L.P.
0000 Xxxxxxxxxx Xxxxx
Xxxxx 0000
XxXxxx, Xxxxxxxx 00000
Attention: Xxx X. Xxxxxx, Esq.
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
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The Syndication Agent: Wachovia Capital Markets, LLC
One Wachovia Center
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxx X. Xxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
The Administrative Agent: Xxxxxx Commercial Paper Inc.
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx Xxxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
and
Attention: Xxx Xxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
with a copy to: Trimont Real Estate Advisors
Monarch Tower
0000 Xxxxxxxxx Xxxx, X.X.
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
Issuing Lender: As notified by such Issuing Lender
to the Administrative Agent and
the Borrower
provided that any notice, request or demand to or upon the any Agent, any
Issuing Lender or any Lender shall not be effective until received.
Notices and other communications to the Lenders hereunder may
be delivered or furnished by electronic communications pursuant to procedures
approved by the Administrative Agent; provided that the foregoing shall not
apply to notices pursuant to Section 2 unless otherwise agreed by the
Administrative Agent and the applicable Lender. The Administrative Agent or the
Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications.
11.3 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of any Agent or any Lender, any right,
remedy, power or privilege hereunder or under the other Loan Documents shall
operate as a waiver thereof; nor shall any
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single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights, remedies, powers
and privileges provided by law.
11.4 Survival of Representations and Warranties. All
representations and warranties made herein, in the other Loan Documents and in
any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans and other extensions of credit hereunder.
11.5 Payment of Expenses. The Borrower agrees (a) to pay or
reimburse the Agents for all their reasonable out-of-pocket costs and expenses
incurred in connection with the syndication of the Facility (other than fees
payable to syndicate members) and the development, preparation and execution of,
and any amendment, supplement or modification to, this Agreement and the other
Loan Documents and any other documents prepared in connection herewith or
therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, including, without limitation, the reasonable
fees and disbursements and other charges of counsel to the Administrative Agent
and the charges of Intralinks, (b) to pay or reimburse each Lender and the
Agents for all costs and expenses incurred in connection with the evaluation and
review of proposed Borrowing Base Properties pursuant to Section 4.1 (other than
the allocated cost of in-house review), regardless of whether the related
Subject Property is accepted as a Borrowing Base Property as a result of such
review, (c) to pay or reimburse each Lender and the Agents for all their costs
and expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the other Loan Documents and any other documents
prepared in connection herewith or therewith, including, without limitation, the
fees and disbursements of counsel (including the allocated fees and
disbursements and other charges of in-house counsel) to each Lender and of
counsel to the Agents, (d) to pay, indemnify, or reimburse each Lender and the
Agents for, and hold each Lender and the Agents harmless from, any and all
recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp, excise and other taxes, if any, which
may be payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement, the other Loan Documents and
any such other documents, and (e) to pay, indemnify or reimburse each Lender,
each Agent, their respective affiliates, and their respective officers,
directors, trustees, employees, advisors, agents and controlling persons (each,
an "Indemnitee") for, and hold each Indemnitee harmless from and against any and
all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever incurred by an Indemnitee or asserted against any Indemnitee by any
third party or by the Borrower or any other Loan Party arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto or thereto of their
respective obligations hereunder or thereunder or the consummation of the
transactions contemplated hereby or thereby, (ii) any Loan or Letter of Credit
or the use or proposed use of the proceeds thereof (including any refusal by any
Issuing Bank to honor a demand for payment under a Letter of Credit if the
documents presented in connection with such demand do not strictly comply with
the terms of such Letter of Credit),
85
(iii) any actual or alleged presence or release of Materials of Environmental
Concern on or from any property owned, occupied or operated by the Borrower or
any of its Subsidiaries, or any actual or alleged violation of, or liability or
other obligation under, any Environmental Law related in any way to the Borrower
or any of its Subsidiaries or any or their respective properties, or (iv) any
actual or prospective claim, litigation, investigation or proceeding relating to
any of the foregoing, whether based on contract, tort or any other theory,
whether brought by any third party or by the Borrower or any other Loan Party,
and regardless of whether any Indemnitee is a party thereto (all the foregoing
in this clause (e), collectively, the "Indemnified Liabilities"), provided, that
the Borrower shall have no obligation hereunder to any Indemnitee with respect
to Indemnified Liabilities to the extent such Indemnified Liabilities are found
by a final and nonappealable decision of a court of competent jurisdiction to
have resulted from the gross negligence or willful misconduct of such
Indemnitee. No Indemnitee shall be liable for any damages arising from the use
by unauthorized persons of Information or other materials sent through
electronic, telecommunications or other information transmission systems that
are intercepted by such persons or for any special, indirect, consequential or
punitive damages in connection with the Facility. Without limiting the
foregoing, and to the extent permitted by applicable law, the Borrower agrees
not to assert and to cause its Subsidiaries not to assert, and hereby waives and
agrees to cause its Subsidiaries so to waive, all rights for contribution or any
other rights of recovery with respect to all claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or
nature, under or related to Environmental Laws, that any of them might have by
statute or otherwise against any Indemnitee, other than any such claims,
demands, penalties, fines, liabilities, settlements, damages, costs or expenses
which are found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
such Indemnitee. All amounts due under this Section shall be payable not later
than 30 days after written demand therefor. Statements payable by the Borrower
pursuant to this Section shall be submitted to Xxxxx Xxxxxx, President and Chief
Financial Officer (Telephone No. (000) 000-0000) (Fax No. (000) 000-0000), at
the address of the Borrower set forth in Section 11.2, or to such other Person
or address as may be hereafter designated by the Borrower in a notice to the
Administrative Agent. The agreements in this Section shall survive repayment of
the Loans and all other amounts payable hereunder.
11.6 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of the REIT,
the Borrower, the Lenders, the Agents, all future holders of the Loans and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of the Agents and each Lender.
(b) Any Lender may, without the consent of the Borrower, in
accordance with applicable law, at any time sell to one or more banks, financial
institutions or other entities (each, a "Participant") participating interests
in any Loan owing to such Lender, any Commitment of such Lender or any other
interest of such Lender hereunder and under the other Loan Documents. In the
event of any such sale by a Lender of a participating interest to a Participant,
such Lender's obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Lender shall remain solely responsible
for the performance thereof, such Lender shall remain the holder of any such
Loan for all purposes under this Agreement and the other Loan Documents, and the
Borrower and the Agents shall continue to deal solely and
86
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. In no event shall
any Participant under any such participation have any right to approve any
amendment or waiver of any provision of any Loan Document, or any consent to any
departure by any Loan Party therefrom, except to the extent that such amendment,
waiver or consent would require the consent of all Lenders pursuant to Section
11.1. The Borrower agrees that if amounts outstanding under this Agreement and
the Loans are due or unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall, to the maximum extent permitted by applicable law, be deemed to have the
right of setoff in respect of its participating interest in amounts owing under
this Agreement to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under this Agreement, provided that, in
purchasing such participating interest, such Participant shall be deemed to have
agreed to share with the Lenders the proceeds thereof as provided in Section
11.7(a) as fully as if such Participant were a Lender hereunder. The Borrower
also agrees that each Participant shall be entitled to the benefits of Sections
2.14, 2.15 and 2.16 with respect to its participation in the Commitments and the
Loans outstanding from time to time as if such Participant were a Lender;
provided that, in the case of Section 2.15, such Participant shall have complied
with the requirements of said Section, and provided, further, that no
Participant shall be entitled to receive any greater amount pursuant to any such
Section than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by such transferor Lender
to such Participant had no such transfer occurred.
(c) Any Lender (an "Assignor") may, in accordance with
applicable law and upon written notice to the Administrative Agent, at any time
and from time to time assign to any Lender or any affiliate, Related Fund or
Control Investment Affiliate thereof or, with the consent of the Borrower, the
Administrative Agent and the Issuing Lender (which, in each case, shall not be
unreasonably withheld or delayed) (provided that no such consent need be
obtained by any Xxxxxx Entity), to an additional bank, financial institution or
other entity (an "Assignee") all or any part of its rights and obligations under
this Agreement pursuant to an Assignment and Acceptance, substantially in the
form of Exhibit E, executed by such Assignee and such Assignor (and, where the
consent of the Borrower, the Administrative Agent and the Issuing Lender is
required pursuant to the foregoing provisions, by the Borrower and such other
Persons) and delivered to the Administrative Agent for its acceptance and
recording in the Register; provided that no such assignment to an Assignee
(other than any Lender or any affiliate thereof) shall be in an aggregate
principal amount of less than $1,000,000 (other than in the case of an
assignment of all of a Lender's interests under this Agreement) and, the
applicable Assignor (if it shall retain any Commitment or Loans) shall have a
Commitment (or in the case the Commitments have been terminated, Loans) of at
least $1,000,000, unless otherwise agreed by the Borrower and the Administrative
Agent. Upon such execution, delivery, acceptance and recording, from and after
the effective date determined pursuant to such Assignment and Acceptance, (x)
the Assignee thereunder shall be a party hereto and, to the extent provided in
such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder with Commitments and/or Loans as set forth therein, and (y) the
Assignor thereunder shall, to the extent provided in such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all of an Assignor's rights and
obligations under this Agreement, such Assignor shall cease to be a party
hereto, except as to Section 2.14, 2.15 and 11.5 in respect of the period prior
to such effective date). Notwithstanding any provision of
87
this Section, the consent of the Borrower shall not be required for any
assignment that occurs at any time when any Event of Default shall have occurred
and be continuing. For purposes of the minimum assignment amounts set forth in
this paragraph, multiple assignments by two or more Related Funds shall be
aggregated.
(d) The Administrative Agent shall, on behalf of the Borrower,
maintain at its address referred to in Section 11.2 a copy of each Assignment
and Acceptance delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Lenders and the Commitment of, and
principal amount of the Loans owing to, each Lender from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, each Agent and the Lenders shall treat each Person whose name
is recorded in the Register as the owner of the Loans and any Notes evidencing
such Loans recorded therein for all purposes of this Agreement. Any assignment
of any Loan, whether or not evidenced by a Note, shall be effective only upon
appropriate entries with respect thereto being made in the Register (and each
Note shall expressly so provide). Any assignment or transfer of all or part of a
Loan evidenced by a Note shall be registered on the Register only upon surrender
for registration of assignment or transfer of the Note evidencing such Loan,
accompanied by a duly executed Assignment and Acceptance; thereupon one or more
new Notes in the same aggregate principal amount shall be issued to the
designated Assignee, and the old Notes shall be returned by the Administrative
Agent to the Borrower marked "canceled". The Register shall be available for
inspection by the Borrower or any Lender (with respect to any entry relating to
such Lender's Loans) at any reasonable time and from time to time upon
reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an Assignor and an Assignee (and, in any case where the consent of any other
Person is required by Section 11.6(c), by each such other Person) together with
payment to the Administrative Agent of a registration and processing fee of
$3,500 (treating multiple, simultaneous assignments by or to two or more Related
Funds as a single assignment) (except that no such registration and processing
fee shall be payable (y) in connection with an assignment by or to a Xxxxxx
Entity or (z) in the case of an Assignee which is already a Lender or is an
affiliate or Related Fund of a Lender or a Person under common management with a
Lender), the Administrative Agent shall (i) promptly accept such Assignment and
Acceptance and (ii) on the effective date determined pursuant thereto record the
information contained therein in the Register and give notice of such acceptance
and recordation to the Borrower. On or prior to such effective date, the
Borrower, at its own expense, upon request, shall execute and deliver to the
Administrative Agent (in exchange for the Notes of the assigning Lender) a new
Note to the order of such Assignee in an amount equal to the Commitment assumed
or acquired by it pursuant to such Assignment and Acceptance and, if the
Assignor has retained a Commitment, upon request, a new Note to the order of the
Assignor in an amount equal to the Commitment retained by it hereunder. Such new
Note or Notes shall be dated the Closing Date and shall otherwise be in the form
of the Note or Notes replaced thereby.
(f) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section concerning assignments of Loans
and Notes relate only to absolute assignments and that such provisions do not
prohibit assignments creating security interests in Loans and Notes, including,
without limitation, any pledge or assignment by a Lender of any Loan or Note to
any Federal Reserve Bank in accordance with applicable law.
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(g) Notwithstanding anything to the contrary contained herein,
any Lender (a "Granting Lender") may grant to a special purpose funding vehicle
(an "SPC"), identified as such in writing from time to time by the Granting
Lender to the Administrative Agent and the Borrower, the option to provide to
the Borrower all or any part of any Loan that such Granting Lender would
otherwise be obligated to make to the Borrower pursuant to this Agreement;
provided that (i) nothing herein shall constitute a commitment by any SPC to
make any Loan and (ii) if an SPC elects not to exercise such option or otherwise
fails to provide all or any part of such Loan, the Granting Lender shall be
obligated to make such Loan pursuant to the terms hereof. The making of a Loan
by an SPC hereunder shall utilize the Commitment of the Granting Lender to the
same extent, and as if, such Loan were made by such Granting Lender. Each party
hereto hereby agrees that no SPC shall be liable for any indemnity or similar
payment obligation under this Agreement (all liability for which shall remain
with the Granting Lender). In furtherance of the foregoing, each party hereto
hereby agrees (which agreement shall survive the termination of this Agreement)
that, prior to the date that is one year and one day after the payment in full
of all outstanding commercial paper or other indebtedness of any SPC, it will
not institute against, or join any other person in instituting against, such SPC
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under the laws of the United States or any state thereof. In
addition, notwithstanding anything to the contrary in this Section 11.6(g), any
SPC may (A) with notice to, but without the prior written consent of, the
Borrower and the Administrative Agent and without paying any processing fee
therefor, assign all or a portion of its interests in any Loans to the Granting
Lender, or with the prior written consent of the Borrower and the Administrative
Agent (which consent shall not be unreasonably withheld) to any financial
institutions providing liquidity and/or credit support to or for the account of
such SPC to support the funding or maintenance of Loans, and (B) disclose on a
confidential basis any non-public information relating to its Loans to any
rating agency, commercial paper dealer or provider of any surety, guarantee or
credit or liquidity enhancement to such SPC; provided that non-public
information with respect to the Borrower may be disclosed only with the
Borrower's consent which will not be unreasonably withheld. This paragraph (g)
may not be amended without the written consent of any SPC with Loans outstanding
at the time of such proposed amendment.
11.7 Adjustments; Set-off. (a) Except to the extent that this
Agreement provides for payments to be allocated to a particular Lender or to the
Lenders under a particular Facility, if any Lender (a "Benefitted Lender") shall
at any time receive any payment of all or part of the Obligations owing to it,
or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 9(f), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of such other Lender's Obligations, such Benefitted Lender shall purchase for
cash from the other Lenders a participating interest in such portion of each
such other Lender's Obligations, or shall provide such other Lenders with the
benefits of any such collateral, as shall be necessary to cause such Benefitted
Lender to share the excess payment or benefits of such collateral ratably with
each of the Lenders; provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered from such Benefitted Lender,
such purchase shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest.
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(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to the
REIT or the Borrower, any such notice being expressly waived by the REIT and the
Borrower to the extent permitted by applicable law, upon any amount becoming due
and payable by the REIT or the Borrower hereunder (whether at the stated
maturity, by acceleration or otherwise), to set off and appropriate and apply
against such amount any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Lender or
any branch or agency thereof to or for the credit or the account of the REIT or
the Borrower, as the case may be. Each Lender agrees promptly to notify the
Borrower and the Administrative Agent after any such setoff and application made
by such Lender, provided that the failure to give such notice shall not affect
the validity of such setoff and application.
11.8 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument. Delivery of an executed signature page of this
Agreement or of a Lender Addendum by facsimile transmission shall be effective
as delivery of a manually executed counterpart hereof. A set of the copies of
this Agreement signed by all the parties shall be lodged with the Borrower and
the Administrative Agent.
11.9 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11.10 Integration. This Agreement and the other Loan Documents
represent the entire agreement of the REIT, the Borrower, the Agents, the
Arranger and the Lenders with respect to the subject matter hereof and thereof,
and there are no promises, undertakings, representations or warranties by the
Arranger, any Agent or any Lender relative to subject matter hereof not
expressly set forth or referred to herein or in the other Loan Documents.
11.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
11.12 Submission To Jurisdiction; Waivers. Each of the REIT
and the Borrower hereby irrevocably and unconditionally:
(a) submits for itself and its Property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment
in respect thereof, to the non-exclusive general jurisdiction of the
courts of the State of New York, the courts of the United States of
America for the Southern District of New York, and appellate courts
from any thereof;
90
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or 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 action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to the REIT or the Borrower, as the case may be, at its
address set forth in Section 11.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this Section any special, exemplary, punitive or
consequential damages.
11.13 Acknowledgments. Each of the REIT and the Borrower
hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) neither the Arranger, any Agent nor any Lender has any
fiduciary relationship with or duty to the REIT or the Borrower arising
out of or in connection with this Agreement or any of the other Loan
Documents, and the relationship between the Arranger, the Agents and
the Lenders, on one hand, and the REIT and the Borrower, on the other
hand, in connection herewith or therewith is solely that of debtor and
creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Arranger, the Agents and the Lenders or
among the REIT, the Borrower and the Lenders.
11.14 Confidentiality. Each of the Agents and the Lenders
agrees to keep confidential all non-public information provided to it by any
Loan Party pursuant to this Agreement that is designated by such Loan Party as
confidential; provided that nothing herein shall prevent any Agent or any Lender
from disclosing any such information (a) to the Arranger, any Agent, any other
Lender or any affiliate of any thereof, (b) to any Participant or Assignee
(each, a "Transferee") or prospective Transferee that agrees to comply with the
provisions of this Section or substantially equivalent provisions, (c) to any of
its employees, directors, agents, attorneys, accountants and other professional
advisors, (d) to any financial institution that is a direct or indirect
contractual counterparty in swap agreements or such contractual counterparty's
professional advisor (so long as such contractual counterparty or professional
advisor to such contractual counterparty agrees to be bound by the provisions of
this Section), (e) upon the request or demand of any Governmental Authority
having jurisdiction over it, (f) in response to
91
any order of any court or other Governmental Authority or as may otherwise be
required pursuant to any Requirement of Law, (g) in connection with any
litigation or similar proceeding, (h) that has been publicly disclosed other
than in breach of this Section, (i) to the National Association of Insurance
Commissioners or any similar organization or any nationally recognized rating
agency that requires access to information about a Lender's investment portfolio
in connection with ratings issued with respect to such Lender or (j) in
connection with the exercise of any remedy hereunder or under any other Loan
Document.
11.15 Release of Collateral and Guarantee Obligations.
(a) Notwithstanding anything to the contrary contained herein
or in any other Loan Document, upon request of the Borrower in
connection with any Disposition of Property permitted by the Loan
Documents, the Administrative Agent shall (without notice to, or vote
or consent of, any Lender, or any affiliate of any Lender that is a
party to any Specified Hedge Agreement) take such actions as shall be
required to release its security interest in any Collateral being
Disposed of in such Disposition, and to release any guarantee
obligations under any Loan Document of any Person being Disposed of in
such Disposition, to the extent necessary to permit consummation of
such Disposition in accordance with the Loan Documents.
(b) Notwithstanding anything to the contrary contained herein
or any other Loan Document, when all Obligations (other than
obligations in respect of any Specified Hedge Agreement) have been paid
in full, all Commitments have terminated or expired and no Letter of
Credit shall be outstanding, upon request of the Borrower, the
Administrative Agent shall (without notice to, or vote or consent of,
any Lender, or any affiliate of any Lender that is a party to any
Specified Hedge Agreement) take such actions as shall be required to
release its security interest in all Collateral, and to release all
guarantee obligations under any Loan Document, whether or not on the
date of such release there may be outstanding Obligations in respect of
Specified Hedge Agreements. Any such release of guarantee obligations
shall be deemed subject to the provision that such guarantee
obligations shall be reinstated if after such release any portion of
any payment in respect of the Obligations guaranteed thereby shall be
rescinded or must otherwise be restored or returned upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of
the Borrower or any Guarantor, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or
similar officer for, the Borrower or any Guarantor or any substantial
part of its property, or otherwise, all as though such payment had not
been made.
11.16 Accounting Changes. In the event that any "Accounting
Change" (as defined below) shall occur and such change results in a change in
the method of calculation of financial covenants, standards or terms in this
Agreement, then the Borrower and the Administrative Agent agree to enter into
negotiations in order to amend such provisions of this Agreement so as to
equitably reflect such Accounting Change with the desired result that the
criteria for evaluating the Borrower's financial condition shall be the same
after such Accounting Change as if such Accounting Change had not been made.
Until such time as such an amendment shall have been executed and delivered by
the Borrower, the Administrative Agent and the Required Lenders, all financial
covenants, standards and terms in this Agreement shall
92
continue to be calculated or construed as if such Accounting Change had not
occurred. "Accounting Change" refers to any change in accounting principles
required by the promulgation of any rule, regulation, pronouncement or opinion
by the Financial Accounting Standards Board of the American Institute of
Certified Public Accountants or, if applicable, the SEC.
11.17 Delivery of Lender Addenda. Each initial Lender and New
Lender shall become a party to this Agreement by delivering to the
Administrative Agent a Lender Addendum duly executed by such Lender, the
Borrower and the Administrative Agent.
11.18 WAIVERS OF JURY TRIAL. THE REIT, THE BORROWER, THE
AGENTS AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
U-STORE-IT TRUST
By:
------------------------------------------
Name:
Title:
U-STORE-IT, L.P.
By:
U-STORE-IT TRUST, its general
partner
By:
------------------------------------------
Name:
Title:
XXXXXX BROTHERS INC.,
as an Arranger
By:
------------------------------------------
Name:
Title:
WACHOVIA CAPITAL MARKETS, LLC,
as an Arranger and as Syndication Agent
By:
------------------------------------------
Name:
Title:
XXXXXX COMMERCIAL PAPER INC.,
as Administrative Agent
By:
------------------------------------------
Name:
Title:
Annex A
PRICING GRID FOR LOANS AND COMMITMENT FEES
=========================== ========================= ====================== ====================
Ratio of Consolidated
Total Debt to
Consolidated Total Asset Applicable Margin Applicable Margin
Value for Eurodollar Loans for Base Rate Loans Commitment Fee Rate
--------------------------- ------------------------- ---------------------- --------------------
<= 30% 1.500% 0.500% 0.25%
--------------------------- ------------------------- ---------------------- --------------------
> 30% but <= 50% 1.750% 0.750% 0.25%
--------------------------- ------------------------- ---------------------- --------------------
> 50% but <= 60% 2.125% 1.125% 0.30%
--------------------------- ------------------------- ---------------------- --------------------
> 60% 2.500% 1.500% 0.30%
=========================== ========================= ====================== ====================
Changes in the Applicable Margin with respect to Loans or in the Commitment Fee
Rate resulting from changes in the ratio of Consolidated Total Debt to
Consolidated Total Asset Value shall become effective on the date (the
"Adjustment Date") on which financial statements are delivered to the Lenders
pursuant to Section 7.1 (but in any event not later than the 45th day after the
end of each of the first three quarterly periods of each fiscal year or the 90th
day after the end of each fiscal year, as the case may be) and shall remain in
effect until the next change to be effected pursuant to this paragraph. If any
financial statements referred to above are not delivered within the time periods
specified above, then, until such financial statements are delivered, the ratio
of Consolidated Total Debt to Consolidated Total Asset Value as at the end of
the fiscal period that would have been covered thereby shall for the purposes of
this definition be deemed to be greater than 50%. In addition, at all times
while an Event of Default shall have occurred and be continuing, the ratio of
Consolidated Total Debt to Consolidated Total Asset Value shall for the purposes
of this Pricing Grid be deemed to be greater than 50%. Each determination of the
ratio of Consolidated Total Debt to Consolidated Total Asset Value pursuant to
this Pricing Grid shall be made for the periods and in the manner contemplated
by Section 8.1(a).
