EXHIBIT 10.4
AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF JULY 30, 1999
AMONG
NATIONAL GOLF OPERATING PARTNERSHIP, L.P.,
AS BORROWER,
NATIONAL GOLF PROPERTIES, INC.,
AS GENERAL PARTNER AND GUARANTOR,
THE FIRST NATIONAL BANK OF CHICAGO, AS
ADMINISTRATIVE AGENT AND LENDER,
XXXXXXX XXXXX CAPITAL CORPORATION,
AS SYNDICATION AGENT AND LENDER,
ING (U.S.) CAPITAL LLC
AS CO-DOCUMENTATION AGENT, CO-ARRANGER, AND LENDER,
AND
UNION BANK OF CALIFORNIA, N.A.,
AS CO-DOCUMENTATION AGENT AND LENDER
AND
BANC ONE CAPITAL MARKETS, INC.
AND
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
AS JOINT LEAD ARRANGERS,
AND
THE SEVERAL OTHER LENDERS
FROM TIME TO TIME PARTIES HERETO
TABLE OF CONTENTS
AMENDED AND RESTATED CREDIT AGREEMENT........................................................................... 1
RECITALS........................................................................................................ 1
ARTICLE I DEFINITIONS........................................................................................... 1
ARTICLE II THE CREDIT...........................................................................................17
2.1 Commitment.........................................................................................17
2.2 Final Principal Payment............................................................................18
2.3 Applicable Margins.................................................................................18
2.4 Revolving Commitment Fee...........................................................................19
2.5 Other Fees.........................................................................................19
2.6 Reserved...........................................................................................19
2.7 Minimum Amount of Each Advance.....................................................................19
2.8 Prepayments; Reductions in Commitment..............................................................19
2.9 Method of Selecting Types and Interest Periods for New Advances....................................22
2.10 Conversion and Continuation of Outstanding Advances................................................22
2.11 Changes in Interest Rate, Etc......................................................................23
2.12 Rates Applicable After Default.....................................................................23
2.13 Swing Line Loans...................................................................................23
2.14 Extension of Revolving Facility Termination Date...................................................24
2.15 Method of Payment..................................................................................24
2.16 Notes; Telephonic Notices..........................................................................25
2.17 Interest Payment Dates; Interest and Fee Basis.....................................................25
2.18 Notification of Advances, Interest Rates and Prepayments...........................................26
2.19 Lending............................................................................................26
2.20 Non-Receipt of Funds by the Administrative Agent...................................................26
2.21 Withholding Tax Exemption..........................................................................26
2.22 Usury..............................................................................................27
2.23 Applications of Moneys Received....................................................................27
ARTICLE III THE LETTER OF CREDIT SUBFACILITY TO THE REVOLVING LOAN
FACILITY........................................................................................................29
3.1 Obligations to Issue...............................................................................29
3.2 Types and Amounts..................................................................................29
3.3 Conditions.........................................................................................29
3.4 Procedure for Issuance of Facility Letters of Credit...............................................30
3.5 Reimbursement Obligations; Duties of Issuing Bank..................................................31
3.6 Participation......................................................................................32
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3.7 Payment of Reimbursement Obligations...............................................................33
3.8 Compensation for Facility Letters of Credit........................................................34
3.9 Letter of Credit Collateral Account................................................................34
ARTICLE IV CHANGE IN CIRCUMSTANCES..............................................................................35
4.1 Yield Protection...................................................................................35
4.2 Changes in Capital Adequacy Regulations............................................................36
4.3 Availability of LIBOR Advances.....................................................................36
4.4 Funding Indemnification............................................................................36
4.5 Lender Statements; Survival of Indemnity...........................................................36
4.6 Substitutions of Lenders...........................................................................37
ARTICLE V CONDITIONS PRECEDENT..................................................................................37
5.1 Effective Date.....................................................................................37
5.2 Each Advance.......................................................................................39
ARTICLE VI REPRESENTATIONS AND WARRANTIES.......................................................................39
6.1 Existence..........................................................................................40
6.2 Authorization and Validity.........................................................................40
6.3 No Conflict; Government Consent....................................................................40
6.4 Financial Statements; Material Adverse Change......................................................40
6.5 Taxes..............................................................................................41
6.6 Litigation and Guarantee Obligations...............................................................41
6.7 Subsidiaries.......................................................................................41
6.8 ERISA..............................................................................................41
6.9 Accuracy of Information............................................................................41
6.10 Margin Stock.......................................................................................42
6.11 Material Agreements................................................................................42
6.12 Compliance with Laws...............................................................................42
6.13 Ownership of Properties............................................................................42
6.14 Investment Company Act.............................................................................42
6.15 Public Utility Holding Company Act.................................................................42
6.16 Solvency...........................................................................................42
6.17 Insurance..........................................................................................43
6.18 REIT Status........................................................................................43
6.19 Environmental Matters..............................................................................43
6.20 Unencumbered Assets................................................................................44
6.21 Year 2000 Representation and Warranty..............................................................45
ARTICLE VII COVENANTS...........................................................................................45
7.1 Financial Reporting................................................................................45
7.2 Use of Proceeds....................................................................................47
7.3 Notice of Default..................................................................................47
7.4 Conduct of Business; Limitations on Investments....................................................47
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7.5 Taxes..............................................................................................48
7.6 Insurance..........................................................................................48
7.7 Compliance with Laws...............................................................................48
7.8 Maintenance of Properties..........................................................................48
7.9 Inspection.........................................................................................48
7.10 Maintenance of Status..............................................................................48
7.11 Dividends..........................................................................................49
7.12 Merger; Sale of Assets.............................................................................49
7.13 General Partner's Ownership and Control of Borrower................................................49
7.14 Sale and Leaseback.................................................................................49
7.15 Liens:.............................................................................................49
7.16 Affiliates.........................................................................................50
7.17 Interest Rate Hedging..............................................................................50
7.18 Limitation on Variable Rate Indebtedness...........................................................50
7.19 Consolidated Net Worth.............................................................................51
7.20 Indebtedness and Cash Flow Covenants...............................................................51
7.21 Environmental Matters..............................................................................51
7.22 Control of the General Partner.....................................................................52
7.23 Approved Operating Leases..........................................................................52
7.24 Borrower's Partnership Agreement...................................................................52
7.25 General Partner's Assets...........................................................................53
7.26 Notice of Rating Change............................................................................53
7.27 Year 2000 Compliance...............................................................................53
7.28 Operating Leases...................................................................................53
7.29 Capital Expenditures...............................................................................53
7.30 No Negative Pledge.................................................................................53
ARTICLE VIII DEFAULTS...........................................................................................53
8.1 Nonpayment of Principal............................................................................53
8.2 Nonpayment of Other Amounts........................................................................54
8.3 Breach of Certain Covenants........................................................................54
8.4 Representation of Warranty Untrue..................................................................54
8.5 Breach of Other Provisions.........................................................................54
8.6 Material Indebtedness..............................................................................54
8.7 Voluntary Bankruptcy...............................................................................54
8.8 Involuntary Bankruptcy.............................................................................54
8.9 Condemnation.......................................................................................55
8.10 Judgments..........................................................................................55
8.11 AGC................................................................................................55
8.12 Pledge of AGC Ownership Interests..................................................................55
8.13 Ownership of AGC...................................................................................55
8.14 Multiemployer Plan Withdrawal Liability............................................................55
8.15 Multiemployer Plan Termination.....................................................................56
8.16 Environmental Remediation..........................................................................56
8.17 Revocation of Guaranty.............................................................................56
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ARTICLE IX ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES.......................................................56
9.1 Acceleration.......................................................................................56
9.2 Amendments.........................................................................................57
9.3 Preservation of Rights.............................................................................59
ARTICLE X GENERAL PROVISIONS....................................................................................59
10.1 Survival of Representations........................................................................59
10.2 Governmental Regulation............................................................................59
10.3 Taxes..............................................................................................59
10.4 Headings...........................................................................................59
10.5 Entire Agreement...................................................................................59
10.6 Several Obligations; Benefits of this Agreement....................................................60
10.7 Expenses; Indemnification..........................................................................60
10.8 Reserved...........................................................................................60
10.9 Accounting.........................................................................................60
10.10 Severability of Provisions.........................................................................60
10.11 Nonliability of Lenders............................................................................61
10.12 Publicity..........................................................................................61
10.13 CHOICE OF LAW......................................................................................61
10.14 CONSENT TO JURISDICTION............................................................................61
10.15 WAIVER OF JURY TRIAL...............................................................................61
10.16 Confidentiality....................................................................................62
ARTICLE XI THE ADMINISTRATIVE AGENT AND AGREEMENTS AMONG LENDERS................................................62
11.1 Appointment........................................................................................62
11.2 Powers.............................................................................................62
11.3 General Immunity...................................................................................62
11.4 No Responsibility for Loans, Recitals, etc.........................................................62
11.5 Action on Instructions of Lenders..................................................................63
11.6 Employment of Agents and Counsel...................................................................63
11.7 Reliance on Documents; Counsel.....................................................................63
11.8 Administrative Agent's Reimbursement and Indemnification...........................................63
11.9 Rights as a Lender.................................................................................64
11.10 Lender Credit Decision.............................................................................64
11.11 Successor Administrative Agent.....................................................................64
11.12 Notice of Defaults.................................................................................65
11.13 Requests for Approval..............................................................................65
11.14 Copies of Documents................................................................................65
11.15 Defaulting Lenders.................................................................................65
ARTICLE XII SETOFF; RATABLE PAYMENTS............................................................................66
12.1 Setoff.............................................................................................66
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12.2 Ratable Payments...................................................................................66
ARTICLE XIII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS..................................................66
13.1 Successors and Assigns.............................................................................66
13.2 Participations.....................................................................................67
13.3 Assignments........................................................................................68
13.4 Dissemination of Information.......................................................................69
13.5 Tax Treatment......................................................................................69
ARTICLE XIV NOTICES.............................................................................................69
14.1 Giving Notice......................................................................................69
14.2 Change of Address..................................................................................69
ARTICLE XV COUNTERPARTS.........................................................................................69
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Exhibits:
Exhibit A Pricing Grid
Exhibit B Form of Revolving Note
Exhibit C Form of Term Note
Exhibit D Form of Opinion
Exhibit E Form of Loan/Credit Related Money Transfer Instruction
Exhibit F Form of Compliance Certificate
Exhibit G Minimum Specifications for Environmental Investigations
Exhibit H Form of Assignment Agreement
Schedules:
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Schedule 1 Subsidiaries
Schedule 2 Unencumbered Assets
Schedule 3 Approved Operators
Schedule 4 Jurisdictions from which Good Standing Certificates
Must be Delivered
Schedule 5 Current Financeable Ground Leases
vi
AMENDED AND RESTATED CREDIT AGREEMENT
This Agreement, dated as of July 30, 1999, is among National Golf Operating
Partnership, L.P., a Delaware limited partnership (the "Borrower"), National
--------
Golf Properties, Inc., a Maryland corporation (the "General Partner" and the
---------------
"Guarantor"), Banc One Capital Markets, Inc. ("BOCM"), Xxxxxxx Lynch, Pierce,
---------- ----
Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx") and, collectively with BOCM, the
"Joint Lead Arrangers" or "Arrangers"), The First National Bank of Chicago
--------------------- ---------
("First Chicago") as a Lender and as "Administrative Agent", Xxxxxxx Xxxxx
--------------- --------------------
Capital Corporation ("MLCC"), as a Lender and as Syndication Agent, ING (U.S.)
----
Capital LLC, as Co-Documentation Agent, Co-Arranger, and Lender, Union Bank of
California, N.A., as Co-Documentation Agent and Lender, and the several banks,
financial institutions and other entities from time to time parties to this
Agreement (collectively, with First Chicago and MLCC, the "Lenders").
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RECITALS
--------
A. The Borrower is primarily engaged in the business of purchasing,
developing, owning, lending upon the security of, and leasing golf course
properties.
B. The General Partner, the Borrower's sole general partner, is listed on
the New York Stock Exchange and is qualified as a real estate investment trust.
The General Partner owns approximately 59% of the total partnership units in the
Borrower and various limited partners in the Borrower own approximately 41% of
such partnership units.
C. The Borrower, the Guarantor, BOCM, Xxxxxxx Xxxxx, First Chicago, MLCC
and several other Lenders party thereto entered into that certain Revolving
Credit Agreement dated as of March 29, 1999 (as amended from time to time, the
"Prior Credit Agreement").
----------------------
D. The Borrower and the General Partner have requested that the existing
facility be replaced by (i) a term loan facility in the amount of $100,000,000
("Term Facility") and a revolving credit facility in the maximum aggregate
-------------
amount of $200,000,000 ("Revolving Facility") and (ii) that the Prior Credit
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Agreement be amended and restated in order to provide for such facilities. The
Lenders are willing on the terms and conditions set forth herein to do so.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree that on the Closing Date, the Prior
Credit Agreement shall be amended and restated as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"ABR Advance" means an Advance which bears interest at the Adjusted ABR
Rate.
"ABR Applicable Margin" means, as of any date, the ABR Applicable Margin in
effect on such date with respect to ABR Advances and ABR Loans for the Revolving
Facility or the Term Facility, as applicable, as determined in accordance with
Section 2.3.
"ABR Loan" means a Loan which bears interest at the Adjusted ABR Rate.
"Adjusted ABR Rate" means, for any day, a rate per annum equal to (i) the
Alternate Base Rate for such day plus (ii) the ABR Applicable Margin for such
day, in each case changing when and as the Alternate Base Rate changes.
"Administrative Agent" means The First National Bank of Chicago in its
capacity as agent for the Lenders pursuant to Article XI, and not in its
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individual capacity as a Lender, and any successor Administrative Agent
appointed pursuant to Article XI.
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"Advance" means a portion of the indebtedness outstanding under either the
Revolving Facility or the Term Facility consisting of the aggregate amount of
the several Loans (including Swing Line Loans) made by the Lenders (or, in the
case of Swing Line Loans, the Swing Line Lender) to the Borrower of the same
Type and, in the case of LIBOR Advances, for the same Interest Period. Multiple
Advances may result from different interest rate selections made by Borrower
applying to different portions of the Term Facility or Revolving Facility
regardless of the number of disbursements.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 50% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
"AGC" shall mean American Golf Corporation, a California subchapter S
corporation, and its majority owned subsidiaries.
"Aggregate Commitment" means the sum of (i) the Aggregate Revolving
Commitment, and (ii) the Aggregate Term Balance (except that prior to
disbursement of the Term Facility the sum of the Term Commitment for each Term
Lender shall be used instead of the Aggregate Term Balance).
"Aggregate Revolving Commitment" means the aggregate of the Revolving
Commitment of all the Lenders at such time, which shall be initially
$200,000,000.
"Aggregate Term Balance" means the aggregate principal amount outstanding
under the Term Facility.
"Agreement" means this Amended and Restated Credit Agreement, as it may be
amended or modified and in effect from time to time.
"Allocated Facility Amount" means, at any time, the sum of all then
outstanding Advances and the then outstanding Facility Letter of Credit
Obligations.
2
"Alternate Base Rate" for any day means the greater of (i) the Corporate
Base Rate or (ii) the federal funds rate as published by the Federal Reserve
Bank plus one-half percent (0.50%) per annum.
"Applicable Margin" means the LIBOR Applicable Margin or ABR Applicable
Margin, as applicable.
"Approved Operator" means each Person listed on Schedule 3 hereto and each
other tenant under an operating lease for a Project which tenant has been
approved by the Required Lenders, such approval not to be unreasonably withheld
if the proposed tenant is an experienced, reputable operator.
"Approved Operating Lease" means an operating lease for a Project with an
Approved Operator, which lease (i) has been approved by the Required Lenders or
(ii) is in substantially the form of the form operating lease which has
theretofore been approved by the Required Lenders, with no changes thereto that
would reasonably be anticipated to adversely affect the Borrower in any material
respect.
"Arrangers" means Xxxxxxx Xxxxx and BOCM.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Authorized Officer" means any of the President, Chairman of Finance
Committee, Vice President Controller or Vice President Finance, acting singly.
"BOCM" means Banc One Capital Markets, Inc.
"Borrower" means National Golf Operating Partnership, L.P., a Delaware
limited partnership, and its successors and permitted assigns.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.9.
-----------
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of LIBOR Advances, a day (other than a Saturday or Sunday) on which
banks generally are open in Los Angeles, California, Chicago, Illinois, and New
York, New York for the conduct of substantially all of their commercial lending
activities and on which dealings in U.S. dollars are carried on in the London
interbank market and (ii) for all other purposes, a day (other than a Saturday
or Sunday) on which banks generally are open in Los Angeles, California,
Chicago, Illinois and New York, New York for the conduct of substantially all of
their commercial lending activities.
"Capital Stock" means 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 which is not a corporation
and any and all warrants or options to purchase any of the foregoing.
3
"Capitalization Value" means the sum of (a) the quotient obtained by
dividing Total Property Operating Income by 10.5% plus (b) an amount equal to
100% of the then-current book value, determined in accordance with GAAP, of all
first mortgage receivables of the Borrower or its Wholly-Owned Subsidiaries on
golf course properties, provided that in no event shall the aggregate amount
added to the amount determined pursuant to the foregoing clause (a) pursuant to
this clause (b) exceed the lesser of (i) five percent (5%) of the amount
determined pursuant to the foregoing clause (a) and (ii) $50,000,000.00.
"Capitalized Lease" of a Person means any lease of Property imposing
obligations on such Person, as lessee thereunder, which are required in
accordance with GAAP to be capitalized on a balance sheet of such Person.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with GAAP.
"Cash Equivalents" means, as of any date, (i) securities issued or directly
and fully guaranteed or insured by the United States Government or any agency or
instrumentality thereof having maturities of not more than one year from such
date, (ii) time deposits and certificates of deposit having maturities of not
more than one year from such date and issued by any domestic commercial bank
having (A) senior long-term unsecured debt rated at least A or the equivalent
thereof by S&P or A2 or the equivalent thereof by Moody's and (B) capital and
surplus in excess of $500,000,000, and (iii) commercial paper rated at least A-1
or the equivalent thereof by S&P or P-1 or the equivalent thereof by Moody's and
in either case maturing within 90 days from such date.
"Closing Date" means July 30, 1999.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Commitment" means, for each Lender, its Revolving Commitment and/or Term
Commitment, as applicable.
"Condemnation" is defined in Section 8.9.
-----------
"Consolidated Net Income" means, for any period, consolidated net income
(or loss) of the General Partner, the Borrower and its Subsidiaries for such
period determined on a consolidated basis in accordance with GAAP; provided that
--------
there shall be excluded (a) the income (or deficit) of any other Person accrued
prior to the date it becomes a Subsidiary of the General Partner or the Borrower
or is merged into or consolidated with the General Partner, the Borrower or any
of their Subsidiaries and (b) the undistributed earnings of any Subsidiary 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 or requirement of law applicable to such Subsidiary.
"Consolidated Net Worth" means, as of any date of determination, an amount
equal to (a) Capitalization Value as of such date minus (b) Consolidated Total
-----
Indebtedness as of such date.
4
"Consolidated Secured Indebtedness" means, as of any date of determination,
the sum of (a) the aggregate principal amount of all Indebtedness of the General
Partner, the Borrower and their respective Subsidiaries outstanding at such date
which is secured by a Lien on any asset of the General Partner, the Borrower or
any of their respective Subsidiaries and (b) the excess, if any, of (i) the
aggregate principal amount of all Consolidated Unsecured Indebtedness of those
Subsidiaries of the General Partner or the Borrower which are not Guarantors
over (ii) $5,000,000, determined on a consolidated basis in accordance with GAAP
----
and (c) the General Partner's and the Borrower's pro rata share of any secured
debt in Investment Affiliates.
"Consolidated Total Indebtedness" means, as of any date of determination,
all Indebtedness of the General Partner, the Borrower and their respective
Subsidiaries outstanding at such date, determined on a consolidated basis in
accordance with GAAP, plus their pro rata share of all Investment Affiliate
debt.
"Consolidated Unsecured Indebtedness" means, as of any date of
determination, the sum of the aggregate principal amount of all Indebtedness of
the General Partner, the Borrower and their Subsidiaries outstanding at such
date, including the Facility Letter of Credit Obligations, which does not
constitute Consolidated Secured Indebtedness.
"Controlled Group" means all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
which, together with the General Partner, the Borrower or any of their
Subsidiaries, are treated as a single employer under Section 414(b) or (c) of
the Code solely for the purposes of potential liability under Section 302(c)(11)
of ERISA and Section 412(c)(11) of the Code and the lien created under Section
302(f) of ERISA and Section 412(n) of the Code, are treated as a single employer
under Section 414(m) or (o) of the Code.
"Conversion/Continuation Notice" is defined in Section 2.10.
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"Corporate Base Rate" means a rate per annum equal to the corporate base
rate of interest announced by Administrative Agent from time to time, changing
when and as such corporate base rate changes.
"Debt Service" means, for any fiscal quarter, Interest Expense plus
scheduled principal amortization payments (excluding balloon payments),
provided that in the case of amortization payments made less frequently than
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quarterly, 25% of the aggregate amortization payments for the fiscal year
including such fiscal quarter shall be included in Debt Service for such quarter
and provided further that Debt Service shall not include any Indebtedness,
-------- -------
extension, renewal or refinancing of Indebtedness among the General Partner, the
Borrower and their Subsidiaries (or any payments with respect thereto) or any
repayment of revolving credit Advances under the Revolving Facility.
"Default" means an event of Default described in Article VIII.
"Default Rate" is defined in Section 2.12.
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"Defaulting Lender" means any Lender which fails or refuses to perform its
obligations under this Agreement within the time period specified for
performance of such obligation, or, if
5
no time frame is specified, if such failure or refusal continues for a period of
five Business Days after written notice from the Administrative Agent; provided
--------
that if such Lender cures such failure or refusal, such Lender shall cease to be
a Defaulting Lender.
"EBITDA" means operating income before gains and losses from sales of
Properties, equity in earnings of Investment Affiliates and minority interest in
earnings, as reported by the General Partner, the Borrower and their
Subsidiaries in accordance with GAAP, plus (i) depreciation, amortization and
cash taxes (excluding sales taxes) plus (ii) interest income on mortgage loans
on golf course properties held by the Borrower or any of its Wholly-Owned
Subsidiaries plus (iii) (without redundancy) the General Partner's and the
Borrower's pro rata share of Net Operating Income from Investment Affiliates, in
each case for the most recent four (4) full fiscal quarters for which financial
results have been reported. EBITDA shall be adjusted to include pro forma
earnings (as substantiated to the satisfaction of the Administrative Agent) for
the entire four (4) fiscal quarter period for any Property acquired or placed in
service during such period and to exclude earnings during such period from any
Property not owned as of the end of such period.
"Environmental Laws" means any and all applicable foreign, federal, state,
local or municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees, requirements of any Governmental Authority or other requirements
of law (including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as now or may at any time hereafter be in effect, in each case to the extent the
foregoing are applicable to the General Partner, the Borrower or any Subsidiary
or any of their respective assets or Projects.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Facility Letter of Credit" means a Letter of Credit issued hereunder.
"Facility Letter of Credit Fee" is defined in Section 3.8.
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"Facility Letter of Credit Obligations" means, as at the time of
determination thereof, all liabilities, whether actual or contingent, of the
Borrower with respect to Facility Letters of Credit, including the sum of (a)
the Reimbursement Obligations and (b) the aggregate undrawn face amount of the
then outstanding Facility Letters of Credit.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10 a.m. (Chicago
time) on such day on such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by the
Administrative Agent in its sole discretion.
"Financeable Ground Lease" means a Major Ground Lease satisfactory to the
Required Lenders and the Administrative Agent's counsel in their reasonable
discretion, which must
6
provide protections for a potential leasehold mortgagee ("Mortgagee") which
---------
include, among other things (i) a remaining term (including renewal options
exercisable solely at the option of the Borrower) of no less than 20 years, (ii)
that the lease will not be terminated until the Mortgagee has received notice of
a default and has had a reasonable opportunity to cure or complete foreclosure,
and fails to do so, (iii) provision for a new lease on substantially the same
terms to the Mortgagee as tenant if the ground lease is terminated for any
reason, (iv) non-merger of the fee and leasehold estates, (v) transferability of
the tenant's interest under the ground lease, without the ground lessor's prior
consent except for restrictions based on the satisfaction of certain objective
criteria reasonably acceptable to Administrative Agent, and (vi) that insurance
proceeds and condemnation awards (from the fee interest as well as the leasehold
interest) will be applied pursuant to the terms of a leasehold mortgage. The
existing Major Ground Leases described on Schedule 5 attached hereto have been
reviewed and approved for inclusion as "Financeable Ground Leases" by the
Required Lenders as of the Closing Date, notwithstanding any deviations from the
standards set forth in the preceding sentence.
"First Chicago" means The First National Bank of Chicago in its individual
capacity, and its successors.
"Fixed Charges" means, for any fiscal quarter, (i) Debt Service plus (ii)
cash tax payments (excluding sales taxes) plus (iii) any ground lease rental
(except to the extent it has been deducted from operating income for purposes of
determining EBITDA) plus (iv) required dividends on preferred stock of the
General Partner and the Subsidiaries of the General Partner and the Borrower
plus (v) distributions on account of preferred operating partnership units of
the Borrower.
"Funded Debt" means, as of any date, that portion of Consolidated Total
Indebtedness represented by borrowed money.
"Funded Percentage" means, with respect to any Revolving Lender at any
time, a percentage equal to a fraction the numerator of which is the amount
actually disbursed and outstanding to Borrower by such Revolving Lender at such
time (including Swing Line Loans), and the denominator of which is the total
amount disbursed and outstanding to Borrower by all of the Revolving Lenders at
such time (including Swing Line Loans).
"Funds From Operations" means, for any period, Consolidated Net Income for
such period without giving effect to depreciation and amortization, gains or
losses from extraordinary items, gains or losses on sales of real estate, gains
or losses on investments in marketable securities and any provisions for or
benefits from income taxes for such period.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect from time to time and consistently applied.
"General Partner" means National Golf Properties, Inc., a Maryland
corporation, the sole general partner of the Borrower, and its successors and
assigns.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
7
"Guarantee Obligation" means, as to any Person (the "guaranteeing person"),
-------------------
any obligation (determined without duplication) of (a) the guaranteeing person
or (b) another Person (including, without limitation, any bank under any Letter
of Credit) to induce the creation of which the guaranteeing person has issued a
reimbursement, counter-indemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing 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 maximum stated amount of the primary obligation
relating to such Guarantee Obligation (or, if less, the maximum stated liability
set forth in the instrument embodying such Guarantee Obligation), provided, that
--------
in the absence of any such stated amount or stated liability, 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.
"Guarantor" means the General Partner in its capacity as the guarantor
under the Guaranty and such Subsidiaries as have executed a guaranty of the
Company's Obligations hereunder.
"Guaranty" means (i) that certain Guaranty of even date herewith executed
by the Guarantor in favor of the Administrative Agent, for the ratable benefit
of the Lenders, as it may be amended or modified and in effect from time to time
and (ii) any guaranty that may hereafter be executed and delivered by any
Subsidiary which is in form and substance satisfactory to the Administrative
Agent and is accompanied by such evidence of due execution and enforceability
(including, without limitation, Lien searches, organizational documents, good
standing certificates, officers' certificates and opinions of counsel) as may be
required by the Administrative Agent.
"Indebtedness" of any Person at any date means 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
current trade liabilities incurred in the ordinary course of business and
payable in accordance with customary practices), to the extent such obligations
constitute indebtedness for the purposes of GAAP, (c) any other indebtedness of
such Person which is evidenced by a note, bond, debenture or similar instrument,
(d) all Capitalized Lease Obligations, (e) all obligations of such Person in
respect of acceptances issued or created for the account of such Person, (f) all
Guarantee Obligations of such Person (excluding in any calculation of
consolidated indebtedness of the Borrower and the General Partner, Guarantee
Obligations of the Borrower or the General Partner in respect of primary
obligations of any
8
Subsidiary), (g) all reimbursement obligations of such Person for letters of
credit and other contingent liabilities, (h) all liabilities secured by any Lien
(other than Liens for taxes not yet due and payable) on any Property owned by
such Person even though such Person has not assumed or otherwise become liable
for the payment thereof; provided that, with respect to liabilities which have
not been assumed by such Person, the amount of such Indebtedness shall be
limited to the fair market value of the Property encumbered by such Lien, (i)
any repurchase obligation or liability of such Person or any of its Subsidiaries
with respect to accounts or notes receivable sold by such Person or any of its
Subsidiaries, (j) any other transaction which is the functional equivalent of or
takes the place of borrowing but which does not constitute a liability on the
consolidated balance sheet of such Person, (k) such Person's pro rata share of
debt in Investment Affiliates and (l) such Person's pro rata share of any loans
where such Person is liable as a general partner.
"Interest Expense" means all interest expense of the General Partner, the
Borrower and their Subsidiaries determined in accordance with GAAP plus (i) the
General Partner's and the Borrower's pro rata share of interest expense in
Investment Affiliates, (ii) capitalized interest, (iii) 100% of any accrued, or
paid interest incurred on any obligation for which the Borrower or the General
Partner is wholly or partially liable under repayment, interest carry, or
performance guarantees, or other relevant liabilities, provided that no expense
shall be included more than once in such calculation even if it falls within
more than one of the foregoing categories.
"Interest Period" means a LIBOR Interest Period.
"Investment" of a Person means any loan, advance (other than commission,
travel and similar advances to officers and employees made in the ordinary
course of business), extension of credit (other than accounts receivable arising
in the ordinary course of business on terms customary in the trade), deposit
account or contribution of capital by such Person to any other Person (other
than a Subsidiary of such Person) or any investment in, or purchase or other
acquisition of, the stock, partnership interests, notes, debentures or other
securities of any other Person (other than a Subsidiary of such Person) made by
such Person.
"Investment Affiliate" means any Person in which the General Partner or the
Borrower, directly or indirectly, has an ownership interest, whose financial
results are not consolidated under GAAP with the financial results of the
General Partner or the Borrower on the consolidated financial statements of the
General Partner or the Borrower.
"Issuing Bank" means, with respect to each Facility Letter of Credit, the
Lender which issues such Facility Letter of Credit.
"Lenders" means the lending institutions listed on the signature pages of
this Agreement, their respective successors and assigns and any other lending
institutions that subsequently become parties to this Agreement pursuant to
Section 13.3.
------------
"Lending Installation" means, with respect to a Lender, any office, branch,
subsidiary or affiliate of such Lender.
9
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Letter of Credit Collateral Account" is defined in Section 3.9.
-----------
"Leverage Ratio" means, as of the date of determination, the ratio of
Funded Debt to Capitalization Value.
"LIBOR Advance" means an Advance which bears interest at a LIBOR Rate.
"LIBOR Applicable Margin" means, as of any date with respect to any LIBOR
Interest Period, the LIBOR Applicable Margin in effect for such LIBOR Interest
Period as determined in accordance with Section 2.3 hereof.
-----------
"LIBOR Base Rate" means, with respect to a LIBOR Advance for the relevant
LIBOR Interest Period, the rate determined by the Administrative Agent to be the
rate at which deposits in U.S. dollars are offered by First Chicago to first-
class banks in the London interbank market at approximately 11 a.m. (London
time) two Business Days prior to the first day of such LIBOR Interest Period, in
the approximate amount of the relevant LIBOR Advance and having a maturity
approximately equal to such LIBOR Interest Period.
"LIBOR Interest Period" means, with respect to a LIBOR Advance, a period of
one, two, three or six months commencing on a Business Day selected by the
Borrower pursuant to this Agreement. Such LIBOR Interest Period shall end on
(but exclude) the day which corresponds numerically to such date one, two, three
or six months thereafter, provided, however, that if there is no such
numerically corresponding day in such next, second, third or sixth succeeding
month, such LIBOR Interest Period shall end on the last Business Day of such
next, second, third or sixth succeeding month. If a LIBOR Interest Period would
otherwise end on a day which is not a Business Day, such LIBOR Interest Period
shall end on the next succeeding Business Day, provided, however, that if said
next succeeding Business Day falls in a new calendar month, such LIBOR Interest
Period shall end on the immediately preceding Business Day.
"LIBOR Loan" means a Loan which bears interest at a LIBOR Rate.
"LIBOR Rate" means, with respect to a LIBOR Advance for the relevant LIBOR
Interest Period, the sum of (i) the quotient of (a) the LIBOR Base Rate
applicable to such LIBOR Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such LIBOR Interest Period,
plus (ii) the LIBOR Applicable Margin in effect on the day that such LIBOR Base
Rate was determined. The LIBOR Rate shall be rounded to the next higher
multiple of 1/16 of 1%.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement of any kind or nature whatsoever
(including, without limitation, the interest of a vendor or lessor under any
conditional sale, Capitalized Lease or other title retention agreement).
"Loan" means, with respect to a Lender, such Lender's portion of any
Advance.
10
"Loan Documents" means this Agreement, the Notes, the Guaranty, and any
other document from time to time evidencing or securing indebtedness or
obligations incurred by the General Partner or the Borrower under this
Agreement, as any of the foregoing may be amended or modified from time to time.
"Major Ground Lease" means a ground lease demising to the Borrower or a
Guarantor all of the land included in any Project or any portion of such land
which the Administrative Agent, in its reasonable judgement, deems necessary for
the continued operation of a golf course on such Project.
"Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), results of operations,
or prospects of the General Partner, the Borrower and their Subsidiaries taken
as a whole, (ii) the ability of the General Partner or the Borrower to perform
their obligations under the Loan Documents, or (iii) the validity or
enforceability of any of the Loan Documents or the rights or remedies of the
Administrative Agent or the Lenders thereunder.
"Materials of Environmental Concern" means any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including, without limitation, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.
"Maximum Legal Rate" means the maximum nonusurious interest rate, if any,
that at any time or from time to time may be contracted for, taken, reserved,
charged or received on the indebtedness evidenced by the Note and as provided
for herein or in the Note or other Loan Documents, under the laws of such state
or states whose laws are held by any court of competent jurisdiction to govern
the interest rate provisions of the Loan.
"Xxxxxxx Xxxxx" means Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated.
"Moody's" means Xxxxx'x Investors Service, Inc. and its successors.
"Multiemployer Plan" means any "multiemployer plan," as defined in Section
4001(a)(3) of ERISA, which the General Partner, the Borrower or any member of
the Controlled Group maintains, administers, contributes to or is required to
contribute to, or may incur any liability.
"Net Cash Proceeds" means, with respect to any sale, transfer or other
disposition of any asset or the sale or issuance of any Indebtedness or stock,
partnership interests or other ownership interest or warrants, rights or options
to acquire any of the same by any Person, the aggregate amount of cash received
from time to time by or on behalf of such Person in connection with such
transaction after deducting therefrom only (a) reasonable and customary
brokerage commissions, underwriting fees and discounts, legal fees, finder's
fees and other similar fees and commissions and (b) the amount of taxes payable
in connection with or as a direct result of such transaction and, in the case of
a sale or disposition of assets, the amount of any distributions required to be
made in order to avoid the imposition of any corporate level income or excise
tax and (c) the amount of any Indebtedness secured by a Lien on such asset that,
by the terms of such transaction, is required to be repaid upon such
disposition, in each case with respect to the foregoing clauses (a) and (c) to
the extent, but only to the extent, that the
11
amounts so deducted are, at the time of receipt of such cash, actually paid to a
Person that is not an Affiliate and are properly attributable to such
transaction or to the asset that is the subject thereof.
"Net Operating Income" means, with respect to any Investment Affiliate for
any period, such entity's operating income minus all operating expenses (as
determined in accordance with GAAP) incurred in connection with and directly
attributable to the generation of such operating income but excluding interest
expense and other debt service charges and any non cash charges such as
depreciation or amortization of financing costs.
"Note Purchase Agreements" shall mean, collectively, (i) the Note Purchase
Agreement dated as of December 15, 1994 between National Golf Operating
Partnership and the Purchasers listed therein with respect to Series A
$50,000,000 8.68% Guarantied Senior Promissory Notes due December 15, 2004 and
Series B $50,000,000 8.73% Guarantied Senior Promissory Notes due June 15, 2005
and (ii) the Restated Note Agreement dated as of July 1, 1996 between National
Golf Operating Partnership and the Purchasers listed therein with respect to
Series A-1 $14,758,700 7.9% Guarantied Senior Promissory Notes due June 15,
2006, Series A-2 $13,794,200 7.9% Guarantied Senior Promissory Notes due June
15, 2006, Series A-3 $11,447,100 7.9% Guarantied Senior Promissory Notes due
June 15, 2006 and Series B $35,000,000 8% Guarantied Senior Promissory Notes due
10 years from the date of issuance.
"Notes" means collectively each Term Note and each Revolving Note.
"Notice of Assignment" is defined in Section 13.3.2.
--------------
"Obligations" means the Advances, the Facility Letter of Credit Obligations
and all accrued and unpaid fees and all expenses, reimbursements, indemnities
and other obligations of Borrower to the Administrative Agent, the Lenders or
any indemnified party hereunder arising under this Agreement or any of the other
Loan Documents.
"Original Closing Date" means March 29, 1999.
"Participants" is defined in Section 13.2.1.
--------------
"Payment Date" means, with respect to the payment of interest accrued on
any ABR Advance, the first day of each calendar month and, with respect to the
payment of interest accrued on any LIBOR Advance, the last day of the Interest
Period relating thereto or, if sooner, the last day of the third month of such
Interest Period.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Permitted Liens" are defined in Section 7.15.
------------
"Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
12
"Plan" means an employee pension benefit plan which is covered by Title IV
of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which the General Partner, the Borrower or any member of the
Controlled Group may have any liability.
"Project" means any real estate asset owned or operated by the Borrower,
General Partner, or any Subsidiary and operated or intended to be operated as,
or ancillary to, a golf course.
"Property" of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased or
operated by such Person.
"Purchasers" is defined in Section 13.3.1.
--------------
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
"Reimbursement Obligations" means at any time, the aggregate of the
Obligations of the Borrower to the Lenders, the Issuing Bank and the
Administrative Agent in respect of all unreimbursed payments or disbursements
made by the Lenders, the Issuing Bank and the Administrative Agent under or in
respect of the Facility Letters of Credit.
"Reportable Event" means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event, provided, however, that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or Section
412(d) of the Code.
"Required Aggregate Lenders" means those Lenders (other than Defaulting
Lenders who are not entitled to vote) in the aggregate whose portion of the Term
Balance and Aggregate Revolving Commitment is at least 66-2/3% of the sum of (i)
the Aggregate Term Balance and (ii) the Aggregate Revolving Commitment (not held
by Defaulting Lenders), except that if the Aggregate Revolving Commitment has
been terminated, the aggregate unpaid principal amount of the outstanding
Revolving Advances that are not held by Defaulting Lenders shall be substituted
for the Aggregate Revolving Commitment for purposes of determining Required
Lenders.
"Required Lenders" means the Required Revolving Lenders and the Required
Term Lenders.
"Required Revolving Lenders" means Revolving Lenders in the aggregate
having at least 66 2/3% of the Aggregate Revolving Commitment (not held by
Defaulting Lenders who are not entitled to vote) or, if the Aggregate Revolving
Commitment has been terminated, Revolving Lenders in the aggregate holding at
least 66 2/3% of the aggregate unpaid principal amount of
13
the outstanding Revolving Advances (not held by Defaulting Lenders who are not
entitled to vote).
"Required Term Lenders" means Term Lenders in the aggregate holding at
least 66 2/3% of the Aggregate Term Balance (not held by Defaulting Lenders who
are not entitled to vote).
"Reserve Requirement" means, with respect to a LIBOR Interest Period, the
maximum aggregate reserve requirement on Eurocurrency liabilities.
"Revolving Advance" means a borrowing hereunder consisting of the aggregate
amount of the several Revolving Loans (including Swing Line Loans) made by the
Revolving Lenders (or, in the case of Swing Line Loans, the Swing Line Lender)
to the Borrower of the same Type and, in the case of LIBOR Advances, for the
same Interest Period.
"Revolving Commitment" means, for each Revolving Lender, the obligation of
such Revolving Lender to make Revolving Loans not exceeding the amount set forth
opposite its signature below or as set forth in any Notice of Assignment
relating to any assignment that has become effective pursuant to Section 13.3.2,
--------------
as such amount may be modified from time to time pursuant to the terms hereof.
"Revolving Commitment Fee" is defined in Section 2.4.
-----------
"Revolving Commitment Fee Rate" is defined in Section 2.4.
-----------
"Revolving Facility" is defined in Recital D.
---------
"Revolving Facility Termination Date" means March 29, 2002, as the same may
be extended pursuant to Section 2.14.
------------
"Revolving Lender" means the lending institutions listed on the signature
pages of this Agreement that have a Revolving Commitment, their respective
successors and assigns and any other lending institutions that subsequently
become parties to this Agreement pursuant to Section 13.3 and that have a
------------
Revolving Commitment.
"Revolving Loan" means, with respect to a Lender, such Lender's portion of
any Revolving Advance.
"Revolving Note" means a promissory note, in substantially the form of
Exhibit B hereto, duly executed by the Borrower and payable to the order of a
---------
Revolving Lender in the amount of its Revolving Commitment, including any
amendment, modification, renewal or replacement of such promissory note.
"Revolving Percentage" means, for each Revolving Lender, the ratio that
such Lender's Revolving Commitment bears to the Aggregate Revolving Commitment,
expressed as a percentage.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
14
"Section 1031 Transaction" means any transaction or series of related
transactions which qualifies as an exchange pursuant to Section 1031 of the
Code.
"Single Employer Plan" means a Plan which is maintained by the General
Partner or the Borrower or any member of the Controlled Group for employees of
the General Partner or the Borrower or any member of the Controlled Group and
which is not a Multiemployer Plan.
"Subsidiary" means, as to any Person, a corporation, partnership or other
entity the financial results of which, in accordance with GAAP, are consolidated
with the financial results of such Person on the consolidated financial
statements of 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 or the General Partner.
"Substantial Portion" means, at any time of determination, with respect to
the Property of the General Partner, the Borrower or their Subsidiaries,
Property which represents more than 10% of the Capitalization Value for the most
recent four calendar quarters for which results have been reported.
"Super Majority Lenders" means Lenders in the aggregate having at least 80%
of the Aggregate Commitment (not held by Defaulting Lenders who are not entitled
to vote) or, if the Aggregate Revolving Commitment has been terminated, Lenders
in the aggregate holding at least 80% of the aggregate unpaid principal amount
of the outstanding Advances (not held by Defaulting Lenders who are not entitled
to vote).
"Swing Line Lender" shall mean Administrative Agent, in its capacity as a
Lender.
"Swing Line Loans" means loans of up to $5,000,000 made by the Swing Line
Lender in accordance with Section 2.13 hereof.
------------
"S&P" means Standard & Poor's Ratings Group and its successors.
"Term Advance" means an Advance outstanding under the Term Facility.
"Term Commitment" means, for each Term Lender, the obligation of such Term
Lender to make a Term Loan in a single disbursement not exceeding the amount set
forth opposite its signature below.
"Term Facility" is defined in Recital D.
---------
"Term Facility Termination Date" means March 29, 2004.
"Term Lenders" means the Lenders which have a Term Commitment, or hold Term
Loans.
"Term Loan" means, with respect to a Lender, such Lender's portion of any
Term Advance.
15
"Term Note" means a promissory note, in substantially the form of Exhibit C
---------
hereto, duly executed by the Borrower and payable to the order of a Term Lender
in the amount of its Term Commitment, including any amendment, modification,
renewal or replacement of such promissory note.
"Term Percentage" means, for each Term Lender, the ratio that the
outstanding principal balance of such Lender's Term Note bears to the Aggregate
Term Balance, expressed as a percentage. Prior to disbursement of the Term
Facility each Lender's Term Percentage shall be the ratio of such Lender's Term
Commitment to the total amount of the Term Facility.
"Total Property Operating Income" means (i) EBITDA less (ii) interest
----
income on mortgage loans on golf course properties held by the Borrower or any
of its Wholly-Owned Subsidiaries, all for the most recent four (4) fiscal
quarters for which financial results have been reported.
"Transferee" is defined in Section 13.4.
------------
"Type" means, with respect to any Advance, its nature as an ABR Advance or
a LIBOR Advance.
"Unencumbered Asset" means, with respect to any Project which is in
service, at any date of determination, the circumstance that such asset on such
date is wholly owned by the Borrower or a Guarantor holding a fee simple
interest or the tenant's interest under a Financeable Ground Lease and (a) is
not subject to any Liens or claims (including restrictions on transferability or
assignability) of any kind (including any such Lien, claim or restriction
imposed by the organizational documents of any Subsidiary, but excluding
Permitted Liens other than those identified in Sections 7.15(v)), (b) is not
----------------
subject to any agreement (including (i) any agreement governing Indebtedness
incurred in order to finance or refinance the acquisition of such asset, and
(ii) if applicable, the organizational documents of any Subsidiary) which
prohibits or limits the ability of the General Partner, the Borrower or any of
their Subsidiaries to create, incur, assume or suffer to exist any Lien upon any
assets or Capital Stock of the General Partner, the Borrower or any of their
Subsidiaries, and (c) is not subject to any agreement (including any agreement
governing Indebtedness incurred in order to finance or refinance the acquisition
of such asset) which entitles any Person to the benefit of any Lien (but
excluding Permitted Liens other than those identified in Sections 7.15(v)) on
----------------
any assets or Capital Stock of the General Partner, the Borrower or any of their
Subsidiaries, or would entitle any Person to the benefit of any Lien (but
excluding Permitted Liens (other than those identified in Sections 7.15(v)) on
----------------
such assets or Capital Stock upon the occurrence of any contingency (including,
without limitation, pursuant to an "equal and ratable" clause) and (d) is
located in the United States. Each Unencumbered Asset must be leased to an
Approved Operator pursuant to an Approved Operating Lease. Notwithstanding the
foregoing, any Project which would be an Unencumbered Asset but for the
existence of any restrictions on Liens, sales, transferability or assignabilty
contained in the Note Purchase Agreements shall be an Unencumbered Asset for all
purposes of this Agreement.
"Unfunded Liabilities" means the amount (if any) by which the present value
of all vested nonforfeitable benefits under all Single Employer Plans exceeds
the fair market value of
16
all such Plan assets allocable to such benefits, all determined as of the then
most recent valuation date for such Single Employer Plans.
"Unmatured Default" means an event which but for the lapse of time or the
giving of notice, or both, would constitute a Default.
"Unrestricted Cash and Cash Equivalents" means, as of any date of
determination, the sum of (a) the aggregate amount of Unrestricted cash then
held by the Borrower or any of its consolidated Subsidiaries and (b) the
aggregate amount of Unrestricted Cash Equivalents (valued at the lower of cost
and fair market value) then held by the Borrower or any of its consolidated
Subsidiaries. As used in this definition, "Unrestricted" means the specified
asset is not subject to any Liens of any kind in favor of any Person.
"Value of Unencumbered Assets" means, as of the end of a quarter, the value
of all Unencumbered Assets owned or leased pursuant to a Financeable Ground
Lease by the Borrower or a Guarantor as of such date, determined by dividing (a)
the result obtained by subtracting from the Total Property Operating Income (i)
the Borrower's and the General Partner's share of the Net Operating Income of
Investment Affiliates, and (ii) the difference between (A) gross rental income
for the most recent four (4) fiscal quarters for which financial results have
been reported attributable to Properties which are not, as of the end of such
quarter, Unencumbered Assets and (B) an allocation of general and administrative
expense equal to seven percent (7%) of such gross rental income by (b) 10.5%.
The gross rental income of Properties which are not Unencumbered Assets shall be
adjusted to include pro forma gross rental income (as substantiated to the
satisfaction of the Administrative Agent) for such four (4) fiscal quarter
period for any such Property acquired or placed in service during such period
and to exclude gross rental income during such period from any such Property not
owned as of the end of such period; provided that in no event shall Unencumbered
Assets held pursuant to Financeable Ground Leases exceed 7% of the total Value
of Unencumbered Assets.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of the
outstanding voting securities of which shall at the time be owned or controlled,
directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries
of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of
such Person, or (ii) any partnership, association, joint venture or similar
business organization 100% of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled.
The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms.
ARTICLE II
THE CREDIT
2.1 Commitments
-----------
(a) Revolving Facility. From and including the date of this
------------------
Agreement and prior to the Revolving Facility Termination Date, each
Revolving Lender severally agrees, subject to the terms and conditions set
forth in this Agreement, to make Revolving Loans
17
to the Borrower from time to time, provided the making of any such
--------
Revolving Loan will not cause the total of the outstanding principal
balance of all Revolving Loans (including Swing Line Loans) and the
Facility Letter of Credit Obligations to exceed the Aggregate Revolving
Commitment. Except for Swing Line Loans, each Revolving Lender shall fund
its Revolving Percentage of each Revolving Advance and no Revolving Lender
will be required to fund any amount, which when aggregated with such
Lender's Revolving Percentage of: (i) all other Revolving Advances then
outstanding, (ii) Facility Letter of Credit Obligations, and (iii) all
Swing Line Loans then outstanding (after giving effect to any repayment of
Swing Line Loans to be made with the proceeds of such Advance), would
exceed such Lender's Revolving Commitment. Subject to the terms of this
Agreement, the Borrower may borrow, repay and reborrow at any time prior to
the Revolving Facility Termination Date. The Revolving Commitments of each
Revolving Lender to lend hereunder shall expire on the Revolving Facility
Termination Date. Each Revolving Advance hereunder shall consist of
Revolving Loans made from the several Revolving Lenders ratably in
proportion to the ratio that their respective Revolving Commitments bears
to the Aggregate Revolving Commitment except for Swing Line Loans which
shall be made by the Swing Line Lender in accordance with Section 2.13. The
------------
Revolving Advances may be ABR Advances or LIBOR Advances, or a combination
thereof, selected by the Borrower in accordance with Sections 2.9 and 2.10.
------------ ----
(b) Term Facility. Each Term Lender severally agrees, subject to
-------------
the terms and conditions set forth in this Agreement, to fund its Term
Percentage of the Term Facility. The Term Commitments of each Term Lender
to lend hereunder shall expire on August 6, 1999, if the conditions to
disbursement of the Term Facility have not been satisfied on or before such
date. The Term Facility may be comprised of ABR Advances or LIBOR Advances,
or a combination thereof, selected by the Borrower in accordance with
Sections 2.9 and 2.10.
------------ ----
2.2 Final Principal Payment.
-----------------------
(a) Revolving Facility. Any outstanding Revolving Advances and all
-------------------
other unpaid Obligations relating to the Revolving Loans shall be paid in
full by the Borrower on the Revolving Facility Termination Date.
(b) Term Facility. Any outstanding Term Advances and all other
--------------
unpaid Obligations shall be paid in full by the Borrower on the Term
Facility Termination Date.
2.3 Applicable Margins.
-------------------
(a) Revolving Facility. For the Revolving Facility, the ABR
-------------------
Applicable Margin and the LIBOR Applicable Margin (as set forth in Exhibit
A) to be used in calculating the interest rate applicable to different
Types of Revolving Advances shall vary from time to time in accordance with
the Borrower's Leverage Ratio.
(b) Term Facility. For the Term Facility, the ABR Applicable
--------------
Margin shall be one and threequarters percent (1.75%) and the LIBOR
Applicable Margin shall be three
18
percent (3.00%). Such margins shall be used in calculating the interest
rate applicable to different Types of Term Advances.
2.4 Revolving Commitment Fee. The Borrower agrees to pay to the
------------------------
Administrative Agent for the account of each Revolving Lender a commitment fee
(the "Revolving Commitment Fee") calculated on a daily basis at a rate per annum
--------- --------------
("Revolving Commitment Fee Rate") on the daily unborrowed and unallocated
-----------------------------
portion of such Lender's Revolving Commitment (which is equal to the difference
between such Lender's Revolving Commitment and the sum of (i) such Lender's
Revolving Percentage of any Facility Letters of Credit then outstanding plus
(ii) all then-outstanding Revolving Loans owed to such Lender) for each day from
the Closing Date to and including the Revolving Facility Termination Date. The
Revolving Commitment Fee Rate shall vary from time to time based on the
Borrower's Leverage Ratio as set forth in the table attached hereto as Exhibit
-------
A. The Revolving Commitment Fee shall be payable quarterly in arrears on the
last Business Day of each calendar quarter hereafter beginning September 30,
1999 and on the Revolving Facility Termination Date.
2.5 Other Fees. The Borrower will pay to the Arrangers when and as due
----------
the fees specified in that certain Administrative Agent's Fee Letter among the
Borrower, First Chicago, MLCC and the Arrangers bearing even date herewith.
2.6 Reserved.
--------
2.7 Minimum Amount of Each Advance. Each LIBOR Advance shall be in the
------------------------------
minimum amount of $5,000,000 (and in multiples of $1,000,000 if in excess
thereof), and each ABR Advance shall be in the minimum amount of $1,000,000 (and
in multiples of $500,000 if in excess thereof), provided, however, that any ABR
Advance may be in the amount of the unused Aggregate Commitment.
2.8 Prepayments; Reductions in Commitment.
-------------------------------------
(a) Voluntary Prepayments. The Borrower may from time to time pay,
---------------------
without penalty or premium, all or any part of outstanding ABR Advances
that are Revolving Loans upon one Business Day's prior notice to the
Administrative Agent, provided that the amount of any such payment shall
not be less than $1,000,000. The Borrower may from time to time pay any of
the LIBOR Advances that are Revolving Loans, provided such LIBOR Advance
may not be paid prior to the last day of the applicable Interest Period
unless accompanied by any amount due pursuant to Section 4.4.
-----------
(b) Mandatory Prepayments of Term Facility From Net Cash Proceeds.
-------------------------------------------------------------
(i) Net Cash Proceeds of Equity Offering. On the date of
------------------------------------
receipt by the Borrower, the General Partner or any of their Subsidiaries
of the Net Cash Proceeds from the sale or issuance of any stock,
partnership interest or other equity interest, in each case preferred or
common (including, for purposes of this clause (i), equity-like securities
containing terms and conditions deemed to approximate an equity interest in
the discretion of the Required Lenders), in Borrower, the General Partner
or any of their Subsidiaries, except
19
for (A) issuance and exercise of stock or stock options to employees of
such Person as part of their overall compensation package, (B) capital
contributions by General Partner and/or Borrower to their respective
Subsidiaries and (C) limited partnership interests in Borrower issued in
exchange for the contribution of Properties to Borrower, Borrower shall
make a principal payment to reduce the Aggregate Term Balance by an amount
equal to 50% of the amount of such Net Cash Proceeds until the Aggregate
Commitment has been permanently reduced to $225,000,000. Notwithstanding
the foregoing, the Borrower shall not be required to make any prepayment on
account of the first $50,000,000 of Net Cash Proceeds (less the amount of
Net Cash Proceeds received after the Original Closing Date and prior to the
date hereof) from any such sale or issuance of stock, partnership interest
or other equity interest, in each case preferred or common, which are
received prior to December 31, 1999.
(ii) Net Cash Proceeds of Property Sales. On the date of
-----------------------------------
receipt by the Borrower, the General Partner or any of their Subsidiaries
of the Net Cash Proceeds of the sale, transfer or other disposition of any
assets of Borrower, the General Partner or any of their Subsidiaries,
except for (A) proceeds of the sale of inventory in the ordinary course of
business, (B) proceeds of sales of damaged, worn or obsolete equipment to
the extent such proceeds are intended to be (and are) used to purchase
replacements for such equipment within 180 days or sales of damaged, worn
or obsolete equipment made after the purchase of replacements for such
equipment, (C) proceeds of any sale or disposition of assets which are used
to acquire other property in a Section 1031 Transaction or which are
invested in substantially similar assets within twelve (12) months of such
sale or disposition, (D) insurance proceeds, condemnation awards and
proceeds from the sale of excess land which are invested in substantially
similar assets within twelve (12) months of receipt of such proceeds, and
(E) any leases or subleases of golf course properties in the ordinary
course of business, the Borrower shall make a principal payment to reduce
the Aggregate Term Balance by an amount equal to 100% of the amount of such
Net Cash Proceeds. The Borrower shall deliver to the Administrative Agent a
certificate regarding its permitted use of such Net Cash Proceeds not later
than three (3) Business Days prior to the applicable outside date. If
Borrower fails to deliver such a certificate or if such certificate
discloses that any Net Cash Proceeds within the reinvestment exceptions in
the preceding sentence have not been so used by the applicable date, the
Aggregate Term Balance shall be prepaid by the full amount of such Net Cash
Proceeds (if no certificate is delivered) or any unused portion thereof, if
such a certificate is given.
20
(iii) Net Cash Proceeds of Debt. On the date of receipt
-------------------------
by the Borrower, the General Partner or any of their
Subsidiaries of the Net Cash Proceeds from the incurrence
or issuance by the Borrower, the General Partner or any of
their Subsidiaries of any Indebtedness except for (A)
Indebtedness that constitutes an equity-like security
included as equity under Section 2.8(b)(i) and (B)
-----------------
Indebtedness secured by a real property mortgage or deed
of trust to the extent that proceeds thereof are used to
purchase or refinance (to the extent only of the existing
purchase money debt) the purchase of the Property that is
the security for such Indebtedness, Borrower shall make a
principal payment to reduce the Aggregate Term Balance by
an amount equal to 100% of the amount of such Net Cash
Proceeds.
(iv) Notice and Effect of Reductions. The Borrower shall give
-------------------------------
the Administrative Agent no less than three (3) Business
Days prior written notice of any anticipated receipt of
Net Cash Proceeds. On the first Business Day after receipt
of such Net Cash Proceeds, the Borrower shall deliver to
the Administrative Agent a certificate showing the source
and amount of such Net Cash Proceeds and, if no payment is
required due to one of the foregoing exceptions,
certifying that all of the conditions to such exception
have been met.
(c) Mandatory Amortization of Term Facility. In addition to the
---------------------------------------
payments required under Section 2.8(b), on each anniversary of the Original
Closing Date, Borrower shall make a principal payment to reduce the
Aggregate Term Balance by an amount equal to $1,000,000. The principal
payments required hereunder shall not be affected by any other payments
applied to reduce the Term Balance.
(d) Voluntary Reduction of Aggregate Revolving Commitment. Upon at
-----------------------------------------------------
least one (1) Business Day prior irrevocable written notice (or telephonic
notice promptly confirmed in writing) to the Administrative Agent, Borrower
shall have the right, without premium or penalty, to terminate the
Aggregate Revolving Commitment in whole or in part provided that (a)
Borrower may not reduce the Aggregate Revolving Commitment below the
Allocated Facility Amount at the time of such requested reduction, and (b)
any such partial termination shall be in the minimum aggregate amount of
Five Million Dollars ($5,000,000.00) or any integral multiple of One
Million Dollars ($1,000,000.00) in excess thereof.
(e) Effect of Reduction of Revolving Commitment. Any reduction in
-------------------------------------------
the Aggregate Revolving Commitment pursuant to this Section 2.8 shall be
-----------
applied pro rata to each Lender's Commitment and any prepayment under this
Section 2.8 shall be applied first to repay Swing Line Loans and then to
-----------
repay other Advances on a pro rata basis.
21
2.9 Method of Selecting Types and Interest Periods for New Advances. For
---------------------------------------------------------------
both the Term Facility and the Revolving Facility, the Borrower shall select
the Type of Advance and, in the case of each LIBOR Advance, the Interest Period
applicable to each Advance from time to time. For each Advance, the Borrower
shall give the Administrative Agent irrevocable notice (a "Borrowing Notice")
----------------
(i) not later than noon Chicago time, at least one (1) Business Day before the
Borrowing Date of each ABR Advance, (ii) not later than noon Chicago time, at
least three (3) Business Days before the Borrowing Date for each LIBOR Advance,
and (iii) not later than noon Chicago time on the Borrowing Date for each Swing
Line Loan, specifying:
(a) the Borrowing Date, which shall be a Business Day, of such
Advance (provided that there can be only one disbursement for the
Term Facility),
(b) the aggregate amount of such Advance,
(c) the Type of Advance selected (which must be an ABR Advance in the
case of the Swing Line Loans), and
(d) in the case of each LIBOR Advance, the Interest Period applicable
thereto.
Not later than 12:00 p.m. (Chicago time) on each Borrowing Date, each
Lender shall make available its Loan or Loans, in funds immediately available
in Chicago to the Administrative Agent at its address specified pursuant to
Article XIV. The Lenders shall not be obligated to match fund their LIBOR
-----------
Advances. The Administrative Agent will make the funds so received from the
Lenders available to the Borrower at the Administrative Agent's aforesaid
address.
No Interest Period for a Revolving Advance may end after the Revolving
Facility Termination Date and no Interest Period for a Term Advance may end
after the Term Facility Termination Date. Unless all of the Lenders otherwise
agree in writing, in no event may there be more than ten (10) different Interest
Periods for LIBOR Advances outstanding at any one time collectively under both
the Revolving Facility and the Term Facility.
2.10 Conversion and Continuation of Outstanding Advances. ABR Advances
---------------------------------------------------
shall continue as ABR Advances unless and until such ABR Advances are converted
into LIBOR Advances. Each LIBOR Advance shall continue as a LIBOR Advance until
the end of the then applicable Interest Period therefor, at which time such
LIBOR Advance shall be automatically converted into an ABR Advance unless the
Borrower shall have given the Administrative Agent a Conversion/Continuation
Notice requesting that, at the end of such Interest Period, such LIBOR Advance
continue as a LIBOR Advance for the same or another Interest Period. Subject to
the terms of Section 2.7, the Borrower may elect from time to time to convert
-----------
all or any part of an Advance of any Type into any other Type of Advance;
provided that any conversion of any LIBOR Advance shall be made on, and only on,
the last day of the Interest Period applicable thereto. The Borrower shall give
the Administrative Agent irrevocable notice (a "Conversion/Continuation Notice")
------------------------------
of each conversion of an Advance or continuation of a LIBOR Advance not later
than noon (Chicago time) at least one Business Day, in the case of a conversion
into an ABR Advance, or three Business Days, in the case of a conversion into or
22
continuation of a LIBOR Advance, prior to the date of the requested conversion
or continuation, specifying:
(i) the requested date which shall be a Business Day, of such
conversion or continuation;
(ii) the aggregate amount and Type of the Advance which is to be
converted or continued; and
(iii) the amount and Type(s) of Advance(s) into which such Advance is
to be converted or continued and, in the case of a conversion
into or continuation of a LIBOR Advance, the duration of the
Interest Period applicable thereto.
2.11 Changes in Interest Rate, Etc. Each ABR Advance shall bear interest
------------------------------
on the outstanding principal amount thereof, for each day from and including the
date such Advance is made or is converted from a LIBOR Advance into an ABR
Advance pursuant to Section 2.10 to but excluding the date it becomes due or is
------------
converted into a LIBOR Advance pursuant to Section 2.10 hereof, at a rate per
------------
annum equal to the Adjusted ABR Rate for such day. Changes in the rate of
interest on that portion of any Advance maintained as a ABR Advance will take
effect simultaneously with each change in the Alternate Base Rate. Each LIBOR
Advance shall bear interest from and including the first day of the Interest
Period applicable thereto to (but not including) the last day of such Interest
Period at the interest rate determined in accordance with the terms hereof as
applicable to such LIBOR Advance.
2.12 Rates Applicable After Default. Notwithstanding anything to the
------------------------------
contrary contained in Section 2.9 or 2.10, during the continuance of a Default
----------- ----
or Unmatured Default the Required Lenders may, at their option, by notice to the
Borrower (which notice may be revoked at the option of the Required Lenders
notwithstanding any provision of Section 9.2 requiring unanimous consent of the
-----------
Lenders to changes in interest rates), declare that no Advance may be made as,
converted into or continued beyond its current term as a LIBOR Advance. During
the continuance of a Default the Required Lenders may, at their option, by
notice to the Borrower (which notice may be revoked at the option of the
Required Lenders notwithstanding any provision of Section 9.2 requiring
-----------
unanimous consent of the Lenders to changes in interest rates), declare that (i)
each LIBOR Advance shall bear interest for the remainder of the applicable
Interest Period at the rate otherwise applicable to such Interest Period plus 2%
per annum and (ii) each ABR Advance shall bear interest at a rate per annum
equal to the Adjusted ABR Rate otherwise applicable to the ABR Advance plus 2%
per annum (each such rate being a "Default Rate"); provided that such rates
------------
shall become applicable automatically without notice to the Borrower if a
Default occurs under Section 8.7 or Section 8.8 with respect to the Borrower or
----------- -----------
a Guarantor.
2.13 Swing Line Loans. In addition to the other options available to
----------------
Borrower hereunder, up to $5,000,000 of the Swing Line Lender's Revolving
Commitment shall be available for Swing Line Loans subject to the following
terms and conditions. Swing Line Loans shall be made available for same day
borrowings provided that notice is given in accordance with Section 2.9 hereof.
-----------
All Swing Line Loans shall bear interest at the Adjusted ABR Rate. In
23
no event shall the Swing Line Lender be required to fund a Swing Line Loan if it
would increase the total aggregate outstanding Revolving Loans by Swing Line
Lender hereunder plus its Revolving Percentage of Facility Letter of Credit
Obligations to an amount in excess of its Revolving Commitment. Upon request of
the Swing Line Lender, each Revolving Lender irrevocably agrees to purchase its
Revolving Percentage of any Swing Line Loan made by the Swing Line Lender
regardless of whether the conditions for disbursement are satisfied at the time
of such purchase, including the existence of a Default hereunder, provided that
--------
no Lender shall be required to have the sum of its total outstanding Revolving
Loans plus its Revolving Percentage of Facility Letters of Credit be greater
than its Revolving Commitment. Such purchase shall take place on the date of the
request by Swing Line Lender so long as such request is made by noon (Chicago
time), otherwise on the Business Day following such request. All requests for
purchase shall be in writing. From and after the date it is so purchased, each
such Loan shall be treated as a Revolving Loan made by the purchasing Revolving
Lender and not by the selling Lender for all purposes under this Agreement, and
shall no longer be considered a Swing Line Loan except that all interest
accruing on or attributable to such Loan for the period prior to the date of
such purchase shall be paid when due by the Borrower to the Administrative Agent
for the benefit of the Swing Line Lender and all such amounts accruing on or
attributable to such Loans for the period from and after the date of such
purchase shall be paid when due by the Borrower to the Administrative Agent for
the benefit of the purchasing Lender. If prior to purchasing its Revolving
Percentage in a Swing Line Loan one of the events described in Section 8.7 or
-----------
8.8 shall have occurred and such event prevents the consummation of the purchase
---
contemplated by preceding provisions, each Revolving Lender will purchase an
undivided participating interest in the outstanding Swing Line Loan in an amount
equal to its Revolving Percentage of such Swing Line Loan. From and after the
date of each Lender's purchase of its participating interest in a Swing Line
Loan, if the Swing Line Lender receives any payment on account thereof, the
Swing Line Lender will distribute to such Lender its participating interest in
such amount (appropriately adjusted, in the case of interest payments, to
reflect the period of time during which such Lender's participating interest was
outstanding and funded); provided, however, that in the event that such payment
-------- -------
was received by the Swing Line Lender and is required to be returned to the
Borrower, each Revolving Lender will return to the Swing Line Lender any portion
thereof previously distributed by the Swing Line Lender to it. No Swing Line
Loan shall be outstanding for more than five (5) days at a time and Swing Line
Loans shall not be outstanding for more than a total of ten (10) days during any
month.
2.14 Extension of Revolving Facility Termination Date. If the Borrower
------------------------------------------------
requests an extension of the Revolving Facility Termination Date by written
notice to the Administrative Agent given no later than sixty days prior to the
Revolving Facility Termination Date, the Administrative Agent shall promptly
submit such request to the Revolving Lenders and, if 100% of the Revolving
Lenders approve such extension prior to the Revolving Facility Termination Date,
the Revolving Facility Termination Date shall be extended to March 29, 2003 by
written notice to the Borrower from the Administrative Agent given at the
direction of the Revolving Lenders.
2.15 Method of Payment. All payments of the Obligations hereunder shall be
-----------------
made, without setoff, deduction, or counterclaim, in immediately available funds
to the Administrative Agent at the Administrative Agent's address specified
pursuant to Article XIV, or at any other Lending Installation of the
-----------
Administrative Agent specified in writing by the Administrative
24
Agent to the Borrower, by noon (local time) on the date when due and shall be
applied by the Administrative Agent among the Lenders in accordance with the
class or type of Obligation being paid. Each payment delivered to the
Administrative Agent for the account of any Lender shall be delivered by the
Administrative Agent to such Lender in the same type of funds that the
Administrative Agent received at its address specified pursuant to Article XIV
-----------
or at any Lending Installation specified in a notice received by the
Administrative Agent from such Lender promptly, which is expected to be by the
close of business on the same Business Day received by Administrative Agent if
received by noon (local time) but shall in any event not be later than the next
Business Day, provided that the Administrative Agent shall pay to such Lenders
--------
interest thereon, at the lesser of (i) the Federal Funds Effective Rate and (ii)
the rate of interest applicable to such Loans, from the Business Day such funds
are received by the Administrative Agent in immediately available funds
(provided, if such funds are not received by the Administrative Agent by noon
--------
(local time), such period shall commence on the Business Day immediately
following the day such funds are received) until such funds are paid to such
Lenders. The Administrative Agent is hereby authorized to charge the account of
the Borrower maintained with First Chicago for each payment of principal,
interest and fees as it becomes due hereunder if not otherwise timely made.
2.16 Notes; Telephonic Notices. Each Lender is hereby authorized to
-------------------------
record the principal amount of each of its Loans and each repayment on the
schedule attached to its Note, provided, however, that the failure to so record
-------- -------
shall not affect the Borrower's obligations under such Note. Each Lender's books
and records, including without limitation, the information, if any, recorded by
the Lender on the Schedule attached to its Note, shall be deemed to be prima
-----
facie correct. The Borrower hereby authorizes the Lenders and the
-----
Administrative Agent to extend, convert or continue Advances, effect selections
of Types of Advances and to transfer funds based on telephonic notices made by
any Person or Persons the Administrative Agent or any Lender in good faith
believes to be acting on behalf of the Borrower. The Borrower agrees to deliver
promptly to the Administrative Agent a written confirmation signed by an
Authorized Officer of each telephonic notice, if such confirmation is requested
by the Administrative Agent or any Lender. If the written confirmation differs
in any material respect from the action taken by the Administrative Agent and
the Lenders, the records of the Administrative Agent and the Lenders shall
govern absent manifest error.
2.17 Interest Payment Dates; Interest and Fee Basis. Interest accrued on
----------------------------------------------
each Advance shall be payable on each Payment Date, commencing with the first
such date to occur after the date hereof, and at maturity, whether by
acceleration or otherwise. Interest accrued on each LIBOR Advance shall also be
payable on any date on which the LIBOR Advance is prepaid (provided that nothing
herein shall authorize a prepayment which is not otherwise permitted hereunder).
Interest and Revolving Commitment Fees shall be calculated for actual days
elapsed on the basis of a 360-day year; provided that interest on ABR Advances
shall be based on a 365 day year. Interest shall be payable for the day an
Advance is made but not for the day of any payment on the amount paid if payment
is received prior to noon (local time) at the place of payment. If any payment
of principal of or interest on an Advance shall become due on a day which is not
a Business Day, such payment shall be made on the next succeeding Business Day
and, in the case of a principal payment, such extension of time shall be
included in computing interest in connection with such payment.
25
2.18 Notification of Advances, Interest Rates and Prepayments. Promptly
--------------------------------------------------------
after receipt thereof (but in no event later than one Business Day prior to the
proposed Borrowing Date for a ABR Advance or three Business Days prior to the
proposed Borrowing Date for a LIBOR Advance), the Administrative Agent will
notify each Revolving Lender or Term Lender, as applicable, of the contents of
each Borrowing Notice, Conversion/Continuation Notice, and repayment notice
received by it hereunder. The Administrative Agent will notify each Revolving
Lender or Term Lender, as applicable, of the interest rate applicable to each
LIBOR Advance promptly upon determination of such interest rate and will give
each Lender prompt notice of each change in the Alternate Base Rate.
2.19 Lending Installations. Each Lender may book its Loans at any
---------------------
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. Each Lender shall use reasonable efforts to
select a Lending Installation that will minimize any payments by Borrower to
such Lender that may become due under Article IV. All terms of this Agreement
----------
shall apply to any such Lending Installation and the Notes shall be deemed held
by each Lender for the benefit of such Lending Installation. Each Lender may, by
written or telex notice to the Administrative Agent and the Borrower, designate
a Lending Installation through which Loans will be made by it and for whose
account Loan payments are to be made.
2.20 Non-Receipt of Funds by the Administrative Agent. Unless the
------------------------------------------------
Borrower or a Lender, as the case may be, notifies the Administrative Agent
prior to the date on which it is scheduled to make payment to the Administrative
Agent of (i) in the case of a Lender, the proceeds of a Loan or (ii) in the case
of the Borrower, a payment of principal, interest or fees to the Administrative
Agent for the account of the Lenders, that it does not intend to make such
payment, the Administrative Agent may assume that such payment has been made.
The Administrative Agent may, but shall not be obligated to, make the amount of
such payment available to the intended recipient in reliance upon such
assumption. If such Lender or the Borrower, as the case may be, has not in fact
made such payment to the Administrative Agent, the recipient of such payment
shall, on demand by the Administrative Agent, repay to the Administrative Agent
the amount so made available together with interest thereon in respect of each
day during the period commencing on the date such amount was so made available
by the Administrative Agent until the date the Administrative Agent recovers
such amount at a rate per annum equal to (i) in the case of payment by a Lender,
the Federal Funds Effective Rate for such day or (ii) in the case of payment by
the Borrower, the interest rate applicable to the relevant Loan.
2.21 Withholding Tax Exemption. At least five Business Days prior to the
-------------------------
first date on which interest or fees are payable hereunder for the account of
any Lender, each Lender that is not incorporated under the laws of the United
States of America, or a state thereof, agrees that it will deliver to each of
the Borrower and the Administrative Agent two duly completed copies of United
States Internal Revenue Service Form 1001 or 4224 or any other required form
(including a "non-bank certificate" where applicable), certifying in either case
that such Lender is entitled to receive payments under this Agreement and the
Notes without deduction or withholding of any United States federal income
taxes. Each Lender which so delivers a Form 1001 or 4224 or any other required
form further undertakes to deliver to each of the Borrower and the
Administrative Agent two additional copies of such form (or a successor form) on
or before the date that such form expires (currently, three successive calendar
years for Form 1001 and one
26
calendar year for Form 4224) or becomes obsolete or after the occurrence of any
event requiring a change in the most recent forms so delivered by it, and such
amendments thereto or extensions or renewals thereof as may be reasonably
requested by the Borrower or the Administrative Agent, in each case certifying
that such Lender is entitled to receive payments under this Agreement and the
Notes without deduction or withholding of any United States federal income
taxes, unless an event (including without limitation any change in treaty, law
or regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such Lender from duly completing and delivering any such form with
respect to it and such Lender advises the Borrower and the Administrative Agent
that it is not capable of receiving payments without any deduction or
withholding of United States federal income tax.
2.22 Usury. This Agreement and each Note are subject to the express
-----
condition that at no time shall the Borrower be obligated or required to pay
interest on the principal balance of the Loan at a rate which could subject any
Lender (including the Swing Line Lender) to either civil or criminal liability
as a result of being in excess of the Maximum Legal Rate. If by the terms of
this Agreement or the Loan Documents, the Borrower is at any time required or
obligated to pay interest on the principal balance due hereunder at a rate in
excess of the Maximum Legal Rate, the interest rate or the Default Rate, as the
case may be, shall be deemed to be immediately reduced to the Maximum Legal Rate
and all previous payments in excess of the Maximum Legal Rate shall be deemed to
have been payments in reduction of principal and not on account of the interest
due hereunder. All sums paid or agreed to be paid to a Lender for the use,
forbearance, or detention of the sums due under the Loan, shall, to the extent
permitted by applicable law, be amortized, prorated, allocated, and spread
throughout the full stated term of the Loan until payment in full so that the
rate or amount of interest on account of the Loan does not exceed the Maximum
Legal Rate of interest from time to time in effect and applicable to the Loan
for so long as the Loan is outstanding.
2.23 Applications of Moneys Received. So long as no Default exists
-------------------------------
payments received by Administrative Agent shall be applied to either the
Revolving Facility or Term Facility as specified by Borrower provided that such
specification is in compliance with the terms of this Agreement. After the
occurrence and during the continuance of a Default, all moneys collected or
received by the Administrative Agent on account of the Term Facility or
Revolving Facility directly or indirectly, shall be applied first to the payment
of all reasonable costs incurred in the collection of such moneys of which the
Administrative Agent shall have given notice to the Borrower and then the
remaining amount shall be allocated between the Term Facility and Revolving
Facility on a pro rata basis based on the relative principal amounts outstanding
under the Term Facility and Revolving Facility. The amount so allocated to the
Term Facility or Revolving Facility, as the case may be, shall be applied in the
following order of priority to pay amounts due in connection with the Term
Facility or Revolving Facility, as applicable:
(i) to the reimbursement of any yield protection due to the Lenders
in accordance with Section 4.1;
-----------
(ii) for amounts being applied to the Revolving Facility, to the
payment of any fee due pursuant to Section 3.8(b) in connection
--------------
27
with the issuance of a Facility Letter of Credit to the Issuing
Bank and to the payment of the Revolving Commitment Fee to the
Revolving Lenders, if then due, in accordance with their
Revolving Percentages and for both the Revolving Facility and
Term Facility, to the payment of the Administrative Agent's fee
to the Administrative Agent if then due;
(iii) for amounts being applied to the Revolving Facility (a) in case
the entire unpaid principal of the Revolving Facility shall not
have become due and payable, the whole amount received as
interest and Facility Letter of Credit Fee then due to the
Revolving Lenders (other than a Defaulting Lender) as their
respective Revolving Percentages appear (except to the extent
there are Swing Line Loans outstanding in which event the full
amount of interest attributable to the Swing Line Loans shall be
payable to the Swing Line Lender unless the Swing Line Lender
shall be a Defaulting Lender), together with the whole amount,
if any, received as principal first to the Swing Line Lender,
unless the Swing Line Lender shall be a Defaulting Lender, to
repay any outstanding Swing Line Loans and then to the Lenders
as their respective Funded Percentages appear, or (b) in case
the entire unpaid principal of the Loan shall have become due
and payable, as a result of a Default or otherwise, to the
payment of the whole amount then due and payable on the
Revolving Facility for principal, together with interest thereon
at the Default Rate or the interest rate, as applicable, to the
Swing Line Lender, unless the Swing Line Lender shall be a
Defaulting Lender, for all such amounts due in connection with
Swing Line Loans and then to the Revolving Lenders (other than a
Defaulting Lender) as their respective Funded Percentages appear
until paid in full and then to the Letter of Credit Collateral
Account until the full amount of Facility Letter of Credit
Obligations is on deposit therein; and
(iv) for amounts being applied to the Term Facility (a) in case the
entire unpaid principal of the Term Facility shall not have
become due and payable, the whole amount received as interest
then due to the Term Lenders (other than a Defaulting Lender) as
their respective Term Percentages appear, together with the
whole amount, if any, received as principal to the Term Lenders
as their respective Term Percentages appear, or (b) in case the
entire unpaid principal of the Term Facility shall have become
due and payable, as a result of a Default or otherwise, to the
payment of the whole amount then due and payable on the Term
Facility for principal, together with interest thereon at the
Default Rate;
(v) to the payment of any sums due to each Defaulting Lender as
their respective Revolving Percentage or Term Percentage appear
28
(provided that Administrative Agent shall have the right to set-
off against such sums any amounts due from such Defaulting
Lender).
ARTICLE III
THE LETTER OF CREDIT SUBFACILITY
TO THE REVOLVING LOAN FACILITY
3.1 Obligations to Issue. Subject to the terms and conditions of this
--------------------
Agreement and in reliance upon the representations and warranties of the
Borrower and the General Partner herein set forth, the Issuing Bank hereby
agrees to issue for the account of Borrower, one or more Facility Letters of
Credit in accordance with this Article III, from time to time during the period
-----------
commencing on the Closing Date and ending on the Business Day prior to the
Revolving Facility Termination Date. Any Revolving Lender shall have the right
to decline to be the Issuing Bank for a Facility Letter of Credit provided that
if no other Revolving Lender agrees to be the Issuing Bank then Administrative
Agent shall agree to do so.
3.2 Types and Amounts. The Issuing Bank shall not have any obligation to:
-----------------
(i) issue any Facility Letter of Credit if the aggregate maximum
amount then available for drawing under Letters of Credit issued
by such Issuing Bank, after giving effect to the Facility Letter
of Credit requested hereunder, shall exceed any limit imposed by
law or regulation upon such Issuing Bank;
(ii) issue any Facility Letter of Credit if, after giving effect
thereto, the Facility Letter of Credit Obligations would exceed
$10,000,000 or the Allocated Facility Amount would exceed the
Aggregate Commitment;
(iii) issue any Facility Letter of Credit having an expiration date,
or containing automatic extension provisions to extend such
date, to a date which is after the Revolving Facility
Termination Date; or
(iv) issue any Facility Letter of Credit having an expiration date,
or containing automatic extension provisions to extend such
date, to a date which is more than fifteen (15) months after the
date of its issuance.
3.3 Conditions. In addition to being subject to the satisfaction of the
----------
conditions contained in Section 5.2 hereof, the obligation of the Issuing Bank
-----------
to issue any Facility Letter of Credit is subject to the satisfaction in full of
the following conditions:
(i) the Borrower shall have delivered to the Issuing Bank at such
times and in such manner as the Issuing Bank may reasonably
prescribe such documents and materials as may be reasonably
required pursuant to the terms of the proposed Facility Letter
of Credit (it being understood that if any inconsistency exists
between
29
such documents and the Loan Documents, the terms of the Loan
Documents shall control) and the proposed Facility Letter of
Credit shall be reasonably satisfactory to the Issuing Bank as
to form and content;
(ii) as of the date of issuance, no order, judgment or decree of any
court, arbitrator or Governmental Authority shall purport by its
terms to enjoin or restrain the Issuing Bank from issuing the
requested Facility Letter of Credit and no law, rule or
regulation applicable to the Issuing Bank and no request or
directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over the Issuing Bank
shall prohibit or request that the Issuing Bank refrain from the
issuance of Letters of Credit generally or the issuance of the
requested Facility Letter or Credit in particular; and
(iii) there shall not exist any Default or Unmatured Default.
3.4 Procedure for Issuance of Facility Letters of Credit.
----------------------------------------------------
(a) Borrower shall give the Issuing Bank and the Administrative Agent
at least five (5) Business Days' prior written notice of any requested issuance
of a Facility Letter of Credit under this Agreement (a "Letter of Credit
----------------
Request") (except that, in lieu of such written notice, the Borrower may give
-------
the Issuing Bank and the Administrative Agent telephonic notice of such request
if confirmed in writing by delivery to the Issuing Bank and the Administrative
Agent (i) immediately (A) of a telecopy of the written notice required hereunder
which has been signed by an Authorized Officer, or (B) of a telex containing all
information required to be contained in such written notice and (ii) promptly
(but in no event later than the requested date of issuance) of the written
notice required hereunder containing the original signature of an Authorized
Officer); such notice shall specify:
(1) the stated amount of the Facility Letter of Credit requested
(which stated amount shall not be less than $50,000 without the
approval of the Issuing Bank);
(2) the effective date (which day shall be a Business Day) of
issuance of such requested Facility Letter of Credit (the
"Issuance Date");
-------------
(3) the date on which such requested Facility Letter of Credit is to
expire (which date shall be a Business Day and shall in no event
be later than the earlier of fifteen months after the Issuance
Date and the Revolving Facility Termination Date):
(4) the purpose for which such Facility Letter of Credit is to be
issued; and
(5) the Person for whose benefit the requested Facility Letter of
Credit is to be issued.
30
At the time such request is made, the Borrower shall also provide the
Administrative Agent and the Issuing Bank with a copy of the form of the
Facility Letter of Credit that the Borrower is requesting be issued, which shall
be subject to the approval of the Issuing Bank and Administrative Agent. Such
notice, to be effective, must be received by such Issuing Bank and the
Administrative Agent not later than 2:00 p.m. (Chicago time) on the last
Business Day on which notice can be given under this Section 3.4(a).
--------------
Administrative Agent shall promptly give a copy of the Letter of Credit Request
to the other Revolving Lenders.
(b) Subject to the terms and conditions of this Article III and
-----------
provided that the applicable conditions set forth in Section 4.2 hereof
-----------
have been satisfied, such Issuing Bank shall, on the Issuance Date, issue a
Facility Letter of Credit on behalf of the Borrower in accordance with the
Letter of Credit Request and the Issuing Bank's usual and customary
business practices unless the Issuing Bank has actually received (i)
written notice from the Borrower specifically revoking the Letter of Credit
Request with respect to such Facility Letter of Credit, (ii) written notice
from a Revolving Lender, which complies with the provisions of Section
-------
3.6(a), or (iii) written or telephonic notice from the Administrative
------
Agent stating that the issuance of such Facility Letter of Credit would
violate Section 3.2.
-----------
(c) The Issuing Bank shall give the Administrative Agent and the
Borrower written or telex notice, or telephonic notice confirmed promptly
thereafter in writing, of the issuance of a Facility Letter of Credit (the
"Issuance Notice") and Administrative Agent shall promptly give a copy of
---------------
the Issuance Notice to the other Revolving Lenders.
(d) The Issuing Bank shall not extend or amend any Facility Letter of
Credit unless the requirements of this Section 3.4 are met as though a new
-----------
Facility Letter of Credit was being requested and issued.
3.5 Reimbursement Obligations; Duties of Issuing Bank.
-------------------------------------------------
(a) The Issuing Bank shall promptly notify the Borrower and the
Administrative Agent of any draw under a Facility Letter of Credit, and the
Administrative Agent shall promptly notify the other Revolving Lenders that
such draw has occurred. Any such draw shall constitute a Revolving Advance
in the amount of the Reimbursement Obligation with respect to such Facility
Letter of Credit and shall bear interest from the date of the relevant
drawing(s) under the pertinent Facility Letter of Credit at a rate selected
by Borrower in accordance with Section 2.9 hereof; provided that if a
-----------
Default or an Unmatured Default involving the payment of money exists at
the time of any such drawing(s), then the Borrower shall reimburse the
Issuing Bank for drawings under a Facility Letter of Credit issued by the
Issuing Bank no later than the next succeeding Business Day after the
payment by the Issuing Bank and until repaid such Reimbursement Obligation
shall bear interest from the date funded at the Default Rate.
(b) Any action taken or omitted to be taken by the Issuing Bank under
or in connection with any Facility Letter of Credit, if taken or omitted in
the absence of willful misconduct or gross negligence, shall not put the
Issuing Bank under any resulting liability to Borrower or any Revolving
Lender or, provided that such Issuing Bank has
31
complied with the procedures specified in Section 3.4 and such Revolving
-----------
Lender has not given a notice contemplated by Section 3.6(a) that continues
--------------
in full force and effect, relieve a Revolving Lender of its obligations
hereunder to the Issuing Bank. In determining whether to pay under any
Facility Letter of Credit, the Issuing Bank shall have no obligation
relative to the Revolving Lenders other than to confirm that any documents
required to be delivered under such Letter of Credit appear to have been
delivered in compliance, and that they appear to comply on their face, with
the requirements of such Letter of Credit.
3.6 Participation.
-------------
(a) Immediately upon issuance by the Issuing Bank of any Facility
Letter of Credit in accordance with the procedures set forth in Section
-------
3.4, each Revolving Lender shall be deemed to have irrevocably and
---
unconditionally purchased and received from the Issuing Bank, without
recourse, representation or warranty, an undivided interest and
participation equal to such Revolving Lender's Revolving Percentage in such
Facility Letter of Credit (including, without limitation, all obligations
of the Borrower with respect thereto) and any security therefor or guaranty
pertaining thereto; provided that a Letter of Credit issued by the Issuing
--------
Bank shall not be deemed to be a Facility Letter of Credit for purposes of
this Section 3.6 if the Issuing Bank shall have received written notice
-----------
from any Revolving Lender on or before the Business Day prior to the date
of its issuance of such Letter of Credit that one or more of the conditions
contained in Section 5.2 is not then satisfied, and in the event the
-----------
Issuing Bank receives such a notice it shall have no further obligation to
issue any Facility Letter of Credit until such notice is withdrawn by that
Revolving Lender or the Issuing Bank receives a notice from the
Administrative Agent that such condition has been effectively waived in
accordance with the provisions of this Agreement. Each Revolving Lender's
obligation to make further Loans to the Borrower (other than any payments
such Revolving Lender is required to make under subparagraph (b) below) or
issue any Letters of Credit on behalf of Borrower shall be reduced by such
Revolving Lender's pro rata share of each Facility Letter of Credit
outstanding.
(b) In the event that the Issuing Bank makes any payment under any
Facility Letter of Credit and the Borrower shall not have repaid such
amount to the Issuing Bank pursuant to Section 3.7 hereof, the Issuing Bank
-----------
shall promptly notify the Administrative Agent, which shall promptly notify
each Revolving Lender of such failure, and each Revolving Lender shall
promptly and unconditionally pay to the Administrative Agent for the
account of the Issuing Bank the amount of such Revolving Lender's Revolving
Percentage of the unreimbursed amount of such payment, and the
Administrative Agent shall promptly pay such amount to the Issuing Bank.
The failure of any Revolving Lender to make available to the Administrative
Agent for the account of any Issuing Bank its Revolving Percentage of the
unreimbursed amount of any such payment shall not relieve any other
Revolving Lender of its obligation hereunder to make available to the
Administrative Agent for the account of such Issuing Bank its Revolving
Percentage of the unreimbursed amount of any payment on the date such
payment is to be made, but no Revolving Lender shall be responsible for the
failure of any other Revolving Lender to make available to the
Administrative Agent its Revolving Percentage of the
32
unreimbursed amount of any payment on the date such payment is to be made.
Any Revolving Lender which fails to make any payment required pursuant to
this Section 3.6(b) shall be deemed to be a Defaulting Revolving Lender
--------------
hereunder.
(c) Whenever the Issuing Bank receives a payment on account of a
Reimbursement Obligation, including any interest thereon, the Issuing Bank
shall promptly pay to the Administrative Agent and the Administrative Agent
shall promptly pay to each Revolving Lender which has funded its
participating interest therein, in immediately available funds, an amount
equal to such Revolving Lender's Revolving Percentage thereof.
(d) Upon the request of the Administrative Agent or any Revolving
Lender, an Issuing Bank shall furnish to such Administrative Agent or
Revolving Lender copies of any Facility Letter of Credit to which that
Issuing Bank is party and such other documentation as may reasonably be
requested by the Administrative Agent or Revolving Lender.
(e) The obligations of a Revolving Lender to make payments to the
Administrative Agent for the account of each Issuing Bank with respect to a
Facility Letter of Credit shall be absolute, unconditional and irrevocable,
not subject to any counterclaim, set-off, qualification or exception
whatsoever other than a failure of any such Issuing Bank to comply with the
terms of this Agreement relating to the issuance of such Facility Letter of
Credit and shall be made in accordance with the terms and conditions of
this Agreement under all circumstances.
3.7 Payment of Reimbursement Obligations.
------------------------------------
(a) The Borrower agrees to pay to each Issuing Bank the amount of all
Reimbursement Obligations, interest and other amounts payable to such Issuing
Bank under or in connection with any Facility Letter of Credit when due in
accordance with Section 3.5(a) above, irrespective of any claim, set-off,
--------------
defense or other right which the Borrower may have at any time against any
Issuing Bank or any other Person, under all circumstances, including without
limitation any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement
or any of the other Loan Documents;
(ii) the existence of any claim, setoff, defense or other right
which the Borrower may have at any time against a
beneficiary named in a Facility Letter of Credit or any
transferee of any Facility Letter of Credit (or any Person
for whom any such transferee may be acting), the
Administrative Agent, the Issuing Bank, any Revolving
Lender, or any other Person, whether in connection with
this Agreement, any Facility Letter of Credit, the
transactions contemplated herein or any unrelated
transactions (including any underlying transactions
between the Borrower and the beneficiary named in any
Facility Letter of Credit);
33
(iii) any draft, certificate or any other document presented
under the Facility Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect of any
statement therein being untrue or inaccurate in any
respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of
the Loan Documents; or
(v) the occurrence of any Default or Unmatured Default.
(b) In the event any payment by the Borrower received by the Issuing
Bank with respect to a Facility Letter of Credit and distributed by the
Administrative Agent to the Revolving Lenders on account of their
participations is thereafter set aside, avoided or recovered from the
Issuing Bank in connection with any receivership, liquidation,
reorganization or bankruptcy proceeding, each Revolving Lender which
received such distribution shall, upon demand by the Issuing Bank,
contribute such Revolving Lender's Revolving Percentage of the amount set
aside, avoided or recovered together with interest at the rate required to
be paid by the Issuing Bank upon the amount required to be repaid by the
Issuing Bank.
3.8 Compensation for Facility Letters of Credit.
-------------------------------------------
(a) The Borrower shall pay to the Administrative Agent, for the
ratable account of the Revolving Lenders, based upon the Revolving Lenders'
respective Revolving Percentages, a per annum fee (the "Facility Letter of
------------------
Credit Fee") with respect to each Facility Letter of Credit that is equal
----------
to the LIBOR Applicable Margin in effect from time to time. The Facility
Letter of Credit Fee relating to any Facility Letter of Credit shall be due
and payable monthly in arrears in equal installments on the last Business
Day of each month following the issuance or extension, as applicable, of
such Facility Letter of Credit and, to the extent any such fees are then
due and unpaid, on the Revolving Facility Termination Date. The
Administrative Agent shall promptly remit such Facility Letter of Credit
Fees, when paid, to the other Revolving Lenders in accordance with their
Revolving Percentages thereof.
(b) The Issuing Bank also shall have the right to receive solely for
its own account an issuance fee of 0.15% of the face amount of each
Facility Letter of Credit, payable by the Borrower on the Issuance Date for
each such Facility Letter of Credit. The Issuing Bank shall also be
entitled to receive its reasonable out-of-pocket costs and the Issuing
Bank's standard charges of issuing, amending and servicing Facility Letters
of Credit and processing draws thereunder.
3.9 Letter of Credit Collateral Account. The Borrower hereby agrees
-----------------------------------
that it will, until the Revolving Facility Termination Date, maintain a special
collateral account (the "Letter of Credit Collateral Account") at the
-----------------------------------
Administrative Agent's office at the address specified pursuant to Article XIV,
-----------
in the name of the Borrower but under the sole dominion and control of the
Administrative Agent, for the benefit of the Revolving Lenders, and in which the
Borrower shall have no interest other than as set forth in Section 9.1. Such
-----------
Letter of Credit Collateral Account
34
shall be funded to the extent required by Section 9.1. In addition to the
-----------
foregoing, the Borrower hereby grants to the Administrative Agent, for the
benefit of the Revolving Lenders, a properly perfected security interest in and
to the Letter of Credit Collateral Account, any funds that may hereafter be on
deposit in such account and the proceeds thereof.
ARTICLE IV
CHANGE IN CIRCUMSTANCES
4.1 Yield Protection. If after the date hereof there is any change in any
----------------
law or any governmental or quasi-governmental rule, regulation, policy,
guideline or directive (whether or not having the force of law), or any
interpretation thereof, or the compliance of any Lender therewith and such law,
rule, regulation, policy, guideline, directive or interpretation, as changed,
(i) subjects any Lender or any applicable Lending Installation to
any tax, duty, charge or withholding on or from payments due
from the Borrower (excluding federal, state and local income or
franchise taxes on the overall income of any Lender or
applicable Lending Installation), or changes the basis of
taxation of payments to any Lender in respect of its Loans,
Facility Letters of Credit or other amounts due it hereunder, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the account
of, or credit extended by, any Lender or any applicable Lending
Installation (other than reserves and assessments taken into
account in determining the interest rate applicable to LIBOR
Advances), or
(iii) imposes any other condition the result of which is to increase
the cost to any Lender or any applicable Lending Installation of
making, funding or maintaining loans or reduces any amount
receivable by any Lender or any applicable Lending Installation
in connection with loans, or requires any Lender or any
applicable Lending Installation to make any payment calculated
by reference to the amount of Loans held, Letters of Credit
issued or participated in or interest received by it, by an
amount deemed material by such Lender,
then, within 15 days of demand by such Lender, the Borrower shall pay such
Lender that portion of such increased expense incurred or reduction in an
amount received which such Lender determines is attributable to making,
funding and maintaining its Loans and its Commitment.
4.2 Changes in Capital Adequacy Regulations. If a Lender determines the
---------------------------------------
amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such Lender or any corporation controlling such Lender
is increased as a result of a Change (as hereinafter defined), then, within
fifteen days of demand by such Lender, the Borrower shall pay such Lender the
amount necessary to compensate for any shortfall in the rate of return on the
35
portion on such increased capital which such Lender determines is attributable
to this Agreement, its Loans, its interest in the Facility Letters of Credit, or
its obligation to make Loans hereunder or participate in or issue Facility
Letters of Credit (after taking into account such Lender's policies as to
capital adequacy). "Change" means (i) any change after the date of this
------
Agreement in the Risk-Based Capital Guidelines or (ii) any adoption of or change
in any other law, governmental or quasi-governmental rule, regulation, policy,
guideline, interpretation, or directive (whether or not having the force of law)
after the date of this Agreement which affects the amount of capital required or
expected to be maintained by any Lender or any Lending Installation or any
corporation controlling any Lender. "Risk-Based Capital Guidelines" means (i)
-----------------------------
the risk-based capital guidelines in effect in the United States on the date of
this Agreement, including transition rules, and (ii) the corresponding capital
regulations promulgated by regulatory authorities outside the United States
implementing the July 1988 report of the Basle Committee on Banking Regulation
and Supervisory Practices Entitled "International Convergence of Capital
Measurements and Capital Standards," including transition rules, and any
amendments to such regulations adopted prior to the date of this Agreement.
4.3 Availability of LIBOR Advances. If any Lender determines that
------------------------------
maintenance of any of its LIBOR Loans at a suitable Lending Installation would
violate any applicable law, rule, regulation or directive, whether or not having
the force of law, the Administrative Agent shall suspend the availability of
LIBOR Advances and require any LIBOR Advances to be repaid; or if the Required
Lenders determine that (i) deposits of a type or maturity appropriate to match
fund LIBOR Advances are not available, the Administrative Agent shall suspend
the availability of LIBOR Advances with respect to any LIBOR Advances made after
the date of any such determination, or (ii) an interest rate applicable to a
LIBOR Advance does not accurately reflect the cost of making a LIBOR Advance,
then, if for any reason whatsoever the provisions of Section 4.1 are
-----------
inapplicable, the Administrative Agent shall suspend the availability of LIBOR
Advances with respect to any LIBOR Advances made after the date of any such
determination.
4.4 Funding Indemnification. If any payment of a LIBOR Advance occurs on
-----------------------
a date which is not the last day of the applicable Interest Period, whether
because of acceleration, prepayment or otherwise, or a LIBOR Advance is not made
on the date specified by the Borrower for any reason other than default by the
Lenders, the Borrower will indemnify each Lender for any loss or cost incurred
by it resulting therefrom, including, without limitation, any loss or cost in
liquidating or employing deposits acquired to fund or maintain the LIBOR
Advance.
4.5 Lender Statements; Survival of Indemnity. To the extent reasonably
----------------------------------------
possible, each Lender shall designate an alternate Lending Installation with
respect to its LIBOR Loans to reduce any liability of the Borrower to such
Lender under Sections 4.1 and 4.2 or to avoid the unavailability of a Type of a
------------ ---
LIBOR Advance under Section 4.3, so long as such designation is not
-----------
disadvantageous to such Lender. Each Lender shall deliver a written statement
of such Lender as to the amount due, if any, under Sections 4.1, 4.2 or 4.4;
------------ --- ---
provided, however, that the Borrower shall not be obligated to compensate any
-------- -------
Lender for any amounts which accrue prior to a date which is 180 days before
such notice is given. Such written statement shall set forth in reasonable
detail the calculations upon which such Lender determined such amount and shall
be final, conclusive and binding on the Borrower in the absence of manifest
error. Determination of amounts payable under such Sections in connection with
a LIBOR Loan shall be calculated as
36
though each Lender funded its LIBOR Loan through the purchase of a deposit of
the type and maturity corresponding to the deposit used as a reference in
determining the LIBOR Rate applicable to such Loan, whether in fact that is the
case or not. Unless otherwise provided herein, the amount specified in the
written statement shall be payable within 10 days after receipt by the Borrower
of the written statement. The obligations of the Borrower under Sections 4.1,
------------
4.2 and 4.4 shall survive payment of the Obligations and termination of this
--- ---
Agreement.
4.6 Substitutions of Lenders. Upon the receipt by the Borrower from any
------------------------
Lender (an "Affected Lender") of a claim for compensation under any of Sections
--------------- --------
4.1 or 4.2, or upon the inability of a Lender to make LIBOR Advances pursuant to
----------
Section 4.3, in either case, based upon circumstances not generally applicable
-----------
to all Lenders the Borrower may: (i) request one or more of the other Lenders
to acquire and assume all or part of such Affected Lender's Loans and Commitment
(provided that no Lender will be required to increase its Commitment); or (ii)
designate a replacement bank or financial institution (a "Replacement Lender")
------------------
to acquire and assume all or a ratable part of all of such Affected Lender's
Loans and Commitments. Any such designation of a Replacement Lender under
clause (ii) shall be subject to the prior written consent of the Administrative
Agent, not to be unreasonably withheld.
ARTICLE V
CONDITIONS PRECEDENT
5.1 Effective Date. This Agreement shall not become effective, and the
--------------
Lenders shall not be required to make any Advance hereunder unless (a) the
Borrower shall have paid all fees due and payable to the Lenders and the
Administrative Agent hereunder, and (b) the Borrower shall have furnished to the
Administrative Agent, in form and substance satisfactory to the Lenders and
their counsel and with sufficient copies for the Lenders, the following:
(i) The duly executed originals of the Loan Documents, including the
Notes, payable to the order of each of the Lenders, the Guaranty
and this Agreement;
(ii) Certified copies of the articles of incorporation of the General
Partner and AGC and the certificate of limited partnership of
the Borrower, each with all amendments and certified by the
appropriate governmental officer of the State of Maryland, the
State of Delaware, or other jurisdiction, as applicable, as of a
recent date;
(iii) Certificates of good standing for the General Partner, AGC and
the Borrower, certified by the appropriate governmental officer
of the State of Maryland, State of Delaware, or other
jurisdiction, as applicable, and foreign qualification
certificates for the General Partner and the Borrower, certified
by the appropriate governmental officer, for each jurisdiction
listed on Schedule 4;
37
(iv) Copies, certified by an officer of the General Partner, of (1)
its by-laws, together with all amendments thereto and (2) the
Partnership Agreement of the Borrower, together with all
amendments thereto;
(v) An incumbency certificate, executed by an officer of the
General Partner, which shall identify by name and title and
bear the signature of the Persons authorized to sign the Loan
Documents and to make borrowings hereunder on behalf of the
General Partner and the Borrower, upon which certificate the
Administrative Agent and the Lenders shall be entitled to rely
until informed of any change in writing by the Borrower;
(vi) Copies, certified by the Secretary or Assistant Secretary, of
the General Partner's Board of Directors' resolutions
authorizing the Advances provided for herein and the execution,
delivery and performance of the Loan Documents to be executed
and delivered by the General Partner and the Borrower
hereunder;
(vii) A written opinion of the General Partner's and the Borrower's
counsel, addressed to the Lenders in substantially the form of
Exhibit D hereto;
---------
(viii) A certificate, signed by an officer of the General Partner on
behalf of the Borrower and for itself, stating that on the
initial Borrowing Date no Default or Unmatured Default has
occurred and is continuing and that all representations and
warranties of the General Partner and the Borrower are true and
correct as of the initial Borrowing Date;
(ix) The most recent financial statements of AGC, the General
Partner and the Borrower and a certificate from an officer of
the such entity that no material adverse change in such
entity's financial condition has occurred since the date of
such statements;
(x) UCC financing statement, judgment, and tax Lien searches with
respect to the General Partner and the Borrower from the State
of Maryland, the State of Delaware (with respect to the
Borrower only) and the State of California;
(xi) A certificate from the Borrower's principal financial officer
or principal accounting officer regarding the Unencumbered
Assets including such calculations as may be necessary to
determine the Borrower's compliance with the covenant set forth
in Section 7.20(iv) herein;
----------------
(xii) A schedule detailing the economic terms of each Approved
Operating Lease, certified as true and correct by the General
Partner, together with an estoppel certificate from AGC with
respect thereto in a form satisfactory to the Administrative
Agent, which certificate shall also confirm that AGC is not
then in default under any material agreements;
38
(xiii) Written money transfer instructions, in substantially the form
of Exhibit E hereto, addressed to the Administrative Agent and
---------
signed by an Authorized Officer, together with such other
related money transfer authorizations as the Administrative
Agent may have reasonably requested;
(xiv) Evidence that all parties whose consent is required for the
Borrower or the General Partner to execute the Loan Documents
have provided such consents;
(xv) Such other documents as the Agent or the Arrangers or their
counsel may have reasonably requested, the form and substance
of which documents shall be acceptable to the parties and their
respective counsel.
5.2 Each Advance. The Lenders shall not be required to make any Advance
------------
(including Swing Line Loans) other than an Advance or Swing Line Loan that,
after giving effect thereto and to the application of the proceeds thereof, does
not increase the aggregate amount of outstanding Advances (including Swing Line
Loans), unless on the applicable Borrowing Date:
(i) There exists no Default or Unmatured Default; and
(ii) The representations and warranties contained in Article VI are
----------
true and correct as of such Borrowing Date with respect to the
General Partner, the Borrower and to any Subsidiary in
existence (as applicable) on such Borrowing Date in all
material respects, except to the extent any such representation
or warranty is stated to relate solely to an earlier date, in
which case such representation or warranty shall be true and
correct on and as of such earlier date.
Each Borrowing Notice with respect to each such Advance (including Swing
Line Loans) shall constitute a representation and warranty by the Borrower that
the conditions contained in Sections 5.2(i) and (ii) have been satisfied. At
--------------- ----
the request of the Required Lenders Borrower shall also furnish a duly completed
compliance certificate in substantially the form of Exhibit F hereto (including
---------
all schedules or exhibits) as a condition (which may be satisfied as a condition
subsequent provided it is delivered within the time set forth below) to making
an Advance (including Swing Line Loans); provided that the Borrower shall not be
required to provide such compliance certificate sooner than five (5) Business
Days following the request therefor and provided further that the calculations
contained therein shall be based on the most recent quarterly information
available.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
The General Partner and the Borrower each respectively (unless otherwise
noted) represents and warrants to the Lenders that:
39
6.1 Existence. The General Partner is a corporation duly organized,
---------
validly existing and in good standing under the laws of the State of Maryland,
with its principal place of business in Santa Monica, California and is duly
qualified as a foreign corporation, properly licensed (if required), in good
standing and has all requisite authority to conduct its business in each
jurisdiction in which its business is conducted, except where the failure to be
so qualified or in good standing would not have a Material Adverse Effect. The
Borrower is a limited partnership duly organized, validly existing and in good
standing under the laws of the State of Delaware, with its principal place of
business in Santa Monica, California and is duly qualified as a foreign limited
partnership, properly licensed (if required), in good standing and has all
requisite authority to conduct its business in each jurisdiction in which its
business is conducted, except where the failure to be so qualified or in good
standing would not have a Material Adverse Effect. Each of the Subsidiaries of
the General Partner and the Borrower is duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization and has all
requisite authority to conduct its business in each jurisdiction in which its
business is conducted, except where the failure to be so qualified or in good
standing would not have a Material Adverse Effect.
6.2 Authorization and Validity. It has the power and authority and legal
--------------------------
right to execute and deliver the Loan Documents to which it is a party and to
perform its obligations thereunder. The execution and delivery by it of the
Loan Documents to which it is a party and the performance of its obligations
thereunder have been duly authorized by proper proceedings, and the Loan
Documents to which it is a party constitute legal, valid and binding obligations
of, respectively, the General Partner or the Borrower enforceable against such
entity in accordance with their terms, except as enforceability may be limited
by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally and general principles of equity.
6.3 No Conflict; Government Consent. Neither the execution and delivery
-------------------------------
by it of the Loan Documents to which it is a party, nor the consummation of the
transactions therein contemplated, nor compliance with the provisions thereof
will violate any law, rule, regulation, order, writ, judgment, injunction,
decree or award binding on, respectively, the General Partner or the Borrower or
any of such entity's Subsidiaries or such entity's or any Subsidiary's articles
of incorporation, by-laws, certificate of limited partnership or partnership
agreement or the provisions of any indenture, instrument or agreement to which
such entity or any of its Subsidiaries is a party or is subject, or by which it,
or its Property, is bound, or conflict with or constitute a default thereunder
in any manner that could be reasonably expected to have a Material Adverse
Effect, or result in the creation or imposition of any Lien in, of or on the
Property of such entity or a Subsidiary pursuant to the terms of any such
indenture, instrument or agreement. No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any Governmental Authority is required to authorize, or is
required in connection with the execution, delivery and performance of, or the
legality, validity, binding effect or enforceability of, any of the Loan
Documents.
6.4 Financial Statements; Material Adverse Change. The December 31, 1998
---------------------------------------------
consolidated financial statements of the General Partner, the Borrower and their
Subsidiaries heretofore delivered to the Lenders were prepared in accordance
with GAAP in effect on the date such statements were prepared and fairly present
the consolidated financial condition and operations of the General Partner, the
Borrower and their Subsidiaries at such date and the
40
consolidated results of their operations for the period then ended. Since
December 31, 1998, there has been no change in the business, Property,
prospects, condition (financial or otherwise) or results of operations of the
General Partner, the Borrower and their Subsidiaries which could reasonably be
expected to have a Material Adverse Effect.
6.5 Taxes. It and its Subsidiaries have filed all United States federal
-----
tax returns and all other material tax returns which are required to be filed
and have paid all taxes due pursuant to said returns or pursuant to any
assessment received by, respectively, the General Partner or the Borrower or any
of its Subsidiaries except such taxes, if any, as are being contested in good
faith and as to which adequate reserves have been provided. No tax Liens have
been filed and no claims are being asserted with respect to any such taxes
(other than Permitted Liens). The charges, accruals and reserves on the books of
the General Partner, the Borrower and their respective Subsidiaries in respect
of any taxes or other governmental charges are adequate.
6.6 Litigation and Guarantee Obligations. There is no litigation,
------------------------------------
arbitration, governmental investigation, proceeding or inquiry pending or, to
the knowledge of any of its officers, threatened against or affecting the
General Partner, the Borrower or any of their Subsidiaries which could
reasonably be expected to have a Material Adverse Effect. It has no material
contingent obligations not provided for or disclosed in the financial statements
referred to in Section 7.1 other than contingent obligations incurred since the
-----------
date of such financial statements which are not prohibited hereunder.
6.7 Subsidiaries. Schedule 1 hereto contains an accurate list of all of
------------
the presently existing Subsidiaries of such entity, setting forth their
respective jurisdictions of incorporation and the percentage of their respective
Capital Stock owned, as of the date hereof, by it or its Subsidiaries. All of
the issued and outstanding shares of Capital Stock of such Subsidiaries have
been duly authorized and issued and are fully paid and non-assessable.
6.8 ERISA. The Unfunded Liabilities of all Single Employer Plans do not in
-----
the aggregate exceed $1,000,000. Neither it nor any other member of the
Controlled Group has incurred, or is reasonably expected to incur, any
withdrawal liability to Multiemployer Plans in excess of $250,000 in the
aggregate. Each Single Employer Plan complies in all material respects with all
applicable requirements of law and regulations, no Reportable Event has occurred
with respect to any Single Employer Plan, neither it nor any other members of
the Controlled Group has withdrawn from any Plan or initiated steps to do so,
and no steps have been taken to reorganize or terminate any Single Employer
Plan.
6.9 Accuracy of Information. All factual information heretofore or
-----------------------
contemporaneously furnished by or on behalf of such entity or any of its
Subsidiaries to the Administrative Agent or any Lender for purposes of or in
connection with this Agreement or any transaction contemplated hereby is, and
all other such factual information hereafter furnished by or on behalf of such
entity or any of its Subsidiaries to the Administrative Agent or any Lender will
be, true and accurate in all material respects (taken as a whole) on the date as
of which such information is dated or certified and not incomplete by omitting
to state any material fact necessary to make such information (taken as a whole)
not materially misleading at such time.
41
6.10 Margin Stock. It does not hold any margin stock (as defined in
------------
Regulation U), nor is it engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying margin stock.
6.11 Material Agreements. Neither it nor any Subsidiary is a party to any
-------------------
agreement or instrument or subject to any charter or other corporate restriction
which could reasonably be expected to have a Material Adverse Effect. Neither
it nor any Subsidiary is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in (i)
any agreement to which it is a party, which default could reasonably be expected
to have a Material Adverse Effect or (ii) any agreement or instrument evidencing
or governing Indebtedness, which in each case would constitute a Default
hereunder.
6.12 Compliance with Laws. It and its Subsidiaries have complied, to the
--------------------
best of their knowledge, with all applicable statutes, rules, regulations,
orders and restrictions of any domestic or foreign government or any
instrumentality or agency thereof, having jurisdiction over the conduct of their
respective businesses or the ownership of their respective Property, except for
any non-compliance which could not reasonably be expected to have a Material
Adverse Effect. Neither it nor any Subsidiary has received any notice to the
effect that its operations are not in material compliance with any of the
requirements of applicable federal, state and local environmental, health and
safety statutes and regulations or the subject of any federal or state
investigation evaluating whether any remedial action is needed to respond to a
release of any toxic or hazardous waste or substance into the environment, which
non-compliance or remedial action could reasonably be expected to have a
Material Adverse Effect.
6.13 Ownership of Properties. On the date of this Agreement, it and its
-----------------------
Subsidiaries will have good title, free of all Liens other than those permitted
by Section 7.15, to all of the Property and assets reflected in the financial
------------
statements as owned by it.
6.14 Investment Company Act. Neither it nor any Subsidiary is an
----------------------
"investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
6.15 Public Utility Holding Company Act. Neither it nor any Subsidiary is
----------------------------------
a "holding company" or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company", within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
6.16 Solvency. (i) Immediately after the Closing Date and immediately
--------
following the making of each Loan and after giving effect to the application of
the proceeds of such Loans, (a) the fair value of the assets of the General
Partner, the Borrower and their Subsidiaries on a consolidated basis, at a fair
valuation, will exceed the debts and liabilities, subordinated, contingent or
otherwise, of the General Partner, the Borrower and their Subsidiaries on a
consolidated basis; (b) the present fair saleable value of the Property of the
General Partner, the Borrower and their Subsidiaries on a consolidated basis
will be greater than the amount that will be required to pay the probable
liability of the General Partner, the Borrower and their Subsidiaries on a
consolidated basis on their debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities become absolute and
matured; (c) the General
42
Partner, the Borrower and their Subsidiaries on a consolidated basis will be
able to pay their debts and liabilities, subordinated, contingent or otherwise,
as such debts and liabilities become absolute and matured; and (d) the General
Partner, the Borrower and their Subsidiaries on a consolidated basis will not
have unreasonably small capital with which to conduct the businesses in which
they are engaged as such businesses are now conducted and are proposed to be
conducted after the date hereof.
(ii) It does not intend to, or to permit any of its Subsidiaries to,
and does not believe that it or any of its Subsidiaries will,
incur debts beyond its ability to pay such debts as they mature,
taking into account the timing of and amounts of cash to be
received by it or any such Subsidiary and the timing of the
amounts of cash to be payable on or in respect of its
Indebtedness or the Indebtedness of any such Subsidiary.
6.17 Insurance. It and its Subsidiaries carry, or cause a tenant or
---------
subtenant under a lease or sublease of a golf course property to carry (with it
or its Subsidiaries, as appropriate, named as an additional insured), insurance
on their Projects with financially sound and reputable insurance companies, in
such amounts, with such deductibles and covering such risks as are, to the best
of its knowledge, customarily carried by companies engaged in similar businesses
and owning similar projects in localities where it and its Subsidiaries operate,
including, without limitation:
(i) Property and casualty insurance (including coverage for flood
and other water damage for any improvements at any Project
located within a 100-year flood plain) in the amount of the
replacement cost of the improvements at such Project; and
(ii) Comprehensive general liability insurance in the amount of
$20,000,000 per occurrence.
6.18 REIT Status. The General Partner is in good standing on the New York
-----------
Stock Exchange, is qualified as a real estate investment trust and currently is
in compliance with all applicable provisions of the Code.
6.19 Environmental Matters. Each of the following representations and
---------------------
warranties is true and correct on and as of the Closing Date except to the
extent that the facts and circumstances giving rise to any such failure to be so
true and correct, in the aggregate, could not reasonably be expected to have a
Material Adverse Effect:
(i) To the best knowledge of, respectively, the General Partner or
the Borrower, the Projects of such entity and its Subsidiaries
do not contain, and have not previously contained, any Materials
of Environmental Concern in amounts or concentrations which
constitute or constituted a violation of, or could reasonably be
expected to give rise to liability under, Environmental Laws. In
making this statement, the General Partner and the Borrower are
assuming (except to the extent that either of them has actual
knowledge to the contrary) that any Person handling any
Materials
43
of Environmental Concern at any Project will do so in a
reasonable manner and in accordance with all legal requirements.
(ii) To the best knowledge of such entity, the Projects of such
entity and its Subsidiaries and all operations at the Projects
are in material compliance, and have in the last two years been
in material compliance, with all applicable Environmental Laws,
and there is no material contamination at, under or about the
Projects of such entity and its Subsidiaries, or violation of
any Environmental Law with respect to the Projects of such
entity and its Subsidiaries.
(iii) Neither it nor any of its Subsidiaries has received any written
notice of violation, alleged violation, non-compliance,
liability or potential liability regarding environmental matters
or compliance with Environmental Laws with regard to any of the
Projects, nor does it have knowledge or reason to believe that
any such notice will be received or is being threatened.
(iv) To the best knowledge of such entity, Materials of Environmental
Concern have not been transported or disposed of from the
Projects of such entity and its Subsidiaries in violation of, or
in a manner or to a location which could reasonably be expected
to give rise to liability under, Environmental Laws, nor have
any Materials of Environmental Concern been generated, treated,
stored or disposed of at, on or under any of the Projects of
such entity and its Subsidiaries in violation of, or in a manner
that could reasonably be expected to give rise to liability
under, any applicable Environmental Laws.
(v) No judicial proceedings or governmental or administrative action
is pending, or, to the knowledge of such entity, threatened,
under any Environmental Law to which such entity or any of its
Subsidiaries is or will be named as a party with respect to the
Projects of such entity and its Subsidiaries, nor are there any
consent decrees or other decrees, consent orders, administrative
orders or other orders, or other administrative or judicial
requirements outstanding under any Environmental Law with
respect to the Projects of such entity and its Subsidiaries.
(vi) To the best knowledge of such entity, there has been no release
or threat of release of Materials of Environmental Concern at or
from the Projects of such entity and its Subsidiaries, or
arising from or related to the operations of such entity and its
Subsidiaries in connection with the Projects in violation of or
in amounts or in a manner that could reasonably be expected to
give rise to liability under Environmental Laws.
6.20 Unencumbered Assets. Schedule 2 hereto contains a complete and
-------------------
accurate description of Unencumbered Assets as of the Closing Date.
44
6.21 Year 2000 Representation and Warranty. The Borrower has conducted a
-------------------------------------
comprehensive review and assessment of the Borrower's computer applications and
made inquiry of the Borrower's key tenants and lessees with respect to the "year
2000 problem" (that is, the risk that computer applications may not be able to
properly perform date-sensitive functions after December 31, 1999) and, based on
that review and inquiry, the Borrower does not believe the year 2000 problem
will result in a material adverse change in the Borrower's business condition
(financial or otherwise), operations, properties or prospects, or ability to
repay the Loan.
ARTICLE VII
COVENANTS
During the term of this Agreement, unless with respect to clauses (i),
(iii) and (iv) of Section 7.20 all of the Lenders or with respect to all other
------------
Sections in this Article VII, the Required Lenders, shall otherwise consent in
-----------
writing:
7.1 Financial Reporting. The General Partner and the Borrower will
-------------------
maintain, for themselves and each Subsidiary, a system of accounting established
and administered in accordance with GAAP, and furnish to the Lenders:
(i) As soon as available, but in any event not later than 50 days
after the close of each of the first three fiscal quarters, for
the General Partner (consolidated with the Borrower and their
Subsidiaries) and for AGC, an unaudited consolidated balance
sheet as of the close of each such period and the related
unaudited consolidated statements of income and retained
earnings and of cash flows of such party for such period and the
portion of the fiscal year through the end of such period,
setting forth in each case in comparative form the figures for
the previous year, all certified by the General Partner's or
AGC's (as the case may be) chief financial officer or chief
accounting officer;
(ii) As soon as available, but in any event not later than 50 days
after the close of each of the first three fiscal quarters, for
the General Partner, the Borrower and their Subsidiaries,
related reports in form and substance satisfactory to the
Required Lenders, all certified by the entity's chief financial
officer or chief accounting officer, including a statement of
Funds From Operations (for the General Partner only), a
description of Unencumbered Assets, a listing of capital
expenditures and a pro-forma acquisition report for newly
acquired Projects in the form previously approved by
Administrative Agent;
(iii) As soon as available, but in any event not later than 100 days
after the close of each fiscal year, for the General Partner
(consolidated with the Borrower and their Subsidiaries) and for
AGC, audited financial statements, including a consolidated
balance sheet as at the end of such year and the related
consolidated statements of income and retained
45
earnings and of cash flows for such year, setting forth in each
case in comparative form the figures for the previous year,
reported on by PricewaterhouseCoopers LLP (or other independent
certified public accountants of nationally recognized standing
acceptable to Administrative Agent) without a "going concern" or
like qualification or exception, or qualification arising out of
the scope of the audit;
(iv) As soon as available, but in any event not later than 100 days
after the close of each fiscal year, for the General Partner,
the Borrower and their Subsidiaries, related reports in form
and substance satisfactory to the Required Lenders, certified
by the entity's chief financial officer or chief accounting
officer, including reports containing information regarding
each individual property in the form described in Section
-------
5.1(xii);
--------
(v) Together with the quarterly and annual financial statements
required hereunder, a compliance certificate in substantially
the form of Exhibit F hereto signed by the General Partner's
---------
and the Borrower's chief financial officers or chief accounting
officers showing the calculations and computations necessary to
determine compliance with this Agreement and stating that no
Default or Unmatured Default exists, or if any Default or
Unmatured Default exists, stating the nature and status
thereof;
(vi) As soon as possible and in any event within 10 days after the
General Partner or the Borrower knows that any Reportable Event
has occurred with respect to any Plan, a statement, signed by
the chief financial officer of such entity, describing said
Reportable Event and the action which such entity proposes to
take with respect thereto;
(vii) As soon as possible and in any event within 10 days after
receipt by the General Partner or the Borrower, a copy of (a)
any notice or claim to the effect that the General Partner, the
Borrower or any of their Subsidiaries is or may be liable to
any Person as a result of the release by such entity, any of
its Subsidiaries, or any other Person of any toxic or hazardous
waste or substance into the environment, and (b) any notice
alleging any violation of any federal, state or local
environmental, health or safety law or regulation by the
General Partner or the Borrower or any of their Subsidiaries,
which, in either case, could reasonably be expected to have a
Material Adverse Effect;
(viii) Promptly upon the furnishing thereof to the shareholders of the
General Partner or the partners of the Borrower, copies of all
financial statements, reports, proxy statements and other
materials so furnished;
(ix) Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other reports and
any other public information which the General Partner, the
Borrower or any of their Subsidiaries files with the Securities
Exchange Commission;
46
(x) Promptly upon the distribution thereof to the press or the
public, copies of all press releases;
(xi) No later than the first day of each fiscal year, an
operating budget for such fiscal year; and
(xii) Such other information (including, without limitation,
financial statements for the Borrower and non-financial
information) as the Administrative Agent or any Lender may
from time to time reasonably request.
7.2 Use of Proceeds. The General Partner and the Borrower will, and will
---------------
cause each of their Subsidiaries to, use the proceeds of the Advances for the
general business purposes of the Borrower, including working capital needs,
capital improvements and interim financing for property acquisitions of new
Projects, and to refinance existing debt. The General Partner and the Borrower
will not, nor will they permit any Subsidiary to, use any of the proceeds of the
Advances (i) to purchase or carry any "margin stock" (as defined in Regulation
U) or (ii) to fund any purchase of, or offer for, any Capital Stock of any
Person, unless such Person has consented to such offer prior to any public
announcements relating thereto and the Required Lenders have consented to such
use of the proceeds of such Advance (if such consent of the Required Lenders is
required hereunder).
7.3 Notice of Default. The General Partner and the Borrower will give, and
-----------------
will cause each of their Subsidiaries to give, prompt (and in any event within
five Business Days of such Person's learning of such event) notice in writing to
the Lenders of the occurrence of (i) any Default or Unmatured Default and (ii)
of any other development, financial or otherwise, which could reasonably be
expected to have a Material Adverse Effect.
7.4 Conduct of Business; Limitations on Investments. The General Partner
-----------------------------------------------
and the Borrower will do, and will cause each of their Subsidiaries to do, all
things necessary to remain duly incorporated and/or duly qualified, validly
existing and in good standing as a real estate investment trust, corporation,
general partnership or limited partnership, as the case may be, in its
jurisdiction of incorporation/formation and maintain all requisite authority to
conduct its business in each jurisdiction in which its business is conducted and
to carry on and conduct its businesses in substantially the same manner as it is
presently conducted. Neither the General Partner, the Borrower nor any of their
respective Subsidiaries will undertake any business other than the acquisition,
development, ownership and leasing of golf course properties and ancillary
businesses specifically related thereto, except that the Borrower and its
Subsidiaries may invest in (i) undeveloped or non-golf course land, (ii) non-
golf property holdings, (iii) stock holdings, (iv) mortgages on golf course
properties and (v) joint ventures and partnerships, provided that the total
investment in any one of the first three of the foregoing categories (excluding
cash and Cash Equivalents) does not exceed five percent (5%) of Capitalization
Value, the total investment in either of the fourth or fifth categories
(mortgages on golf course properties and joint ventures and partnerships)
(excluding cash and Cash Equivalents) does not exceed ten percent (10%) of
Capitalization Value, and the total investment in all of the foregoing
investment categories (excluding cash and Cash Equivalents) in the aggregate is
less than or equal to fifteen percent (15%) of Capitalization Value (such
determination to be made in each case at the time such investment is made). In
addition, the aggregate amount invested by the Borrower and its
47
Subsidiaries at any time in the development of golf course properties which are
not yet open for business (including the acquisition cost of the land therefor)
shall not exceed ten percent (10%) of Capitalization Value For the purposes of
this Section 7.4, all assets shall be valued in accordance with GAAP except that
non-revenue generating investments such as land and stock holdings shall be
valued at the lower of acquisition cost or market value. In the event of any
disagreement as to how to value an investment, the reasonable judgment of the
Administrative Agent shall prevail.
7.5 Taxes. The General Partner and the Borrower will pay, and will cause
-----
each of their Subsidiaries to pay, or cause a tenant or subtenant under a lease
or sublease of a Property to pay, when due all material taxes, assessments and
governmental charges and levies upon them or their income, profits or Projects,
except those which are being contested in good faith by appropriate proceedings
and with respect to which adequate reserves have been set aside.
7.6 Insurance. The General Partner and the Borrower will maintain, and will
---------
cause each of their Subsidiaries to maintain or cause the tenant or subtenant
under a lease or sublease of a golf course property to maintain (with the
General Partner, the Borrower or their Subsidiaries, as applicable, named as an
additional insured), with financially sound and reputable insurance companies
insurance on all their Property in such amounts and covering such risks as is
consistent with sound business practice, and the General Partner and the
Borrower will furnish to any Lender upon request full information as to the
insurance carried.
7.7 Compliance with Laws. The General Partner and the Borrower will, and
--------------------
will cause each of their Subsidiaries to, comply with all laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
they may be subject.
7.8 Maintenance of Properties. The General Partner and the Borrower will,
-------------------------
and will cause each of their Subsidiaries to (or cause the tenant under a lease
of a golf course property to), do all things necessary to maintain, preserve,
protect and keep its Property in good repair, working order and condition
(ordinary wear and tear excepted), and make all necessary and proper repairs,
renewals and replacements so that their businesses carried on in connection
therewith may be properly conducted at all times.
7.9 Inspection. The General Partner and the Borrower will, and will cause
----------
each of their Subsidiaries to, permit the Lenders, by their respective
representatives and agents, to inspect any of the Projects, corporate books and
financial records of the General Partner, the Borrower and each of their
Subsidiaries, to examine and make copies of the books of accounts and other
financial records of the General Partner, the Borrower and each of their
Subsidiaries, and to discuss the affairs, finances and accounts of the General
Partner, the Borrower and each of their Subsidiaries, and to be advised as to
the same by, their respective officers at such reasonable times during normal
business hours and intervals as the Lenders may designate, all with reasonable
notice. Such inspections and examinations shall be at the Lenders' sole cost and
expense unless a Default has occurred and is continuing at the time thereof.
7.10 Maintenance of Status. The General Partner shall at all times (i)
---------------------
remain a corporation listed and in good standing on the New York Stock Exchange,
and (ii) maintain its status as a real estate investment trust in compliance
with all applicable provisions of the Code.
48
7.11 Dividends. Provided there is not a continuing Default under Section
--------- -------
8.1 or Section 8.2, and there is not a continuing Default under Section 8.3
--- ----------- -----------
relating to a breach of any of the covenants contained in Section 7.20, the
------------
General Partner shall be permitted to declare and pay dividends on its Capital
Stock from time to time in amounts determined by the General Partner, provided,
--------
however, that subject to the terms of the next sentence, in no event shall the
-------
General Partner declare or pay dividends on its Capital Stock if dividends paid
in any period of four fiscal quarters, in the aggregate, would exceed 90% of
Funds From Operations for such period. Notwithstanding the foregoing, the
General Partner shall be permitted to distribute whatever amount of dividends is
necessary to maintain its tax status as a real estate investment trust, provided
there is not a continuing Default under Section 8.1 or Section 8.2.
----------- -----------
7.12 Merger; Sale of Assets. The General Partner and the Borrower will not,
----------------------
nor will they permit any of their Subsidiaries to, enter into any merger,
consolidation, reorganization or liquidation or transfer or otherwise dispose of
all or a Substantial Portion of their Property, except for such transactions
that occur between Wholly-Owned Subsidiaries, provided, however, the General
Partner or the Borrower may merge with or acquire other companies or
partnerships so long as:
(i) After giving effect to such merger or acquisition, no provision
of this Agreement will have been violated;
(ii) the General Partner or the Borrower will be the surviving
entity; and
(iii) such merger is not accomplished through a hostile takeover.
The Borrower will notify all of the Lenders of all material acquisitions,
dispositions, mergers or asset purchases regardless of whether or not the
Required Lenders must first give their written consent.
7.13 General Partner's Ownership and Control of Borrower. The General
---------------------------------------------------
Partner will not allow its percentage ownership interest in or voting control of
the Borrower to be less than fifty-one percent (51%) and shall remain the sole
general partner of Borrower. The General Partner will not allow or suffer to
exist any pledge, other encumbrance or the conversion to limited partnership
interests of any of the general partnership interests in the Borrower.
7.14 Sale and Leaseback. The General Partner and the Borrower will not, nor
------------------
will they permit any of their Subsidiaries to, sell or transfer any of its
Projects in order to concurrently or subsequently lease as lessee such Projects.
7.15 Liens. The General Partner and the Borrower will not, nor will they
-----
permit any of their Subsidiaries to, create, incur, or suffer to exist any Lien
in, of or on the Property of the General Partner, the Borrower or any of their
Subsidiaries, except:
(i) Liens for taxes, assessments or governmental charges or levies
on their Property if the same shall not at the time be
delinquent or thereafter can be paid without penalty, or are
being contested in good faith and by appropriate proceedings and
for which adequate reserves shall have been set aside on their
books;
49
(ii) Liens imposed by law, such as carriers', warehousemen's and
mechanics' Liens and other similar Liens arising in the ordinary
course of business which secure payment of obligations not more
than 90 days past due or which are being contested in good faith
by appropriate proceedings and for which adequate reserves shall
have been set aside on its books;
(iii) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or
other social security or retirement benefits, or similar
legislation;
(iv) Utility easements, building restrictions, customary license and
use agreements and such other encumbrances or charges against
real property as are of a nature generally existing with respect
to properties of a similar character and which do not in any
material way affect the marketability of the same or interfere
with the use thereof in the business of the General Partner, the
Borrower or their Subsidiaries; and
(v) Liens arising in connection with any Indebtedness permitted
hereunder to the extent such Liens will not result in a
violation of Section 7.20(v) or any of the other provisions of
this Agreement.
Liens permitted pursuant to clauses (i) through (v) of this Section 7.15 shall
------------
be deemed to be "Permitted Liens".
---------------
7.16 Affiliates. The General Partner and the Borrower will not, nor will
----------
they permit any of their Subsidiaries to, enter into any transaction (including,
without limitation, the purchase or sale of any Property or service) with, or
make any payment or transfer to, any Affiliate except in the ordinary course of
business and pursuant to the reasonable requirements of the General Partner's,
the Borrower's or such Subsidiary's business and upon fair and reasonable terms
no less favorable to the General Partner, the Borrower or such Subsidiary than
the General Partner, the Borrower or such Subsidiary would obtain in a
comparable arms-length transaction.
7.17 Interest Rate Hedging. The General Partner and the Borrower will not
---------------------
enter into or remain liable upon, nor will they permit any Subsidiary to enter
into or remain liable upon, any agreements, devices or arrangements designed to
protect at least one of the parties thereto from the fluctuations of interest
rates, exchange rates or forward rates applicable to such party's assets,
liabilities or exchange transactions, including, but not limited to, interest
rate exchange agreements, forward currency exchange agreements, interest rate
cap or collar protection agreements, forward rate currency or interest rate
options unless such agreement, device or arrangement was entered into by the
General Partner or the Borrower in the ordinary course of its business for the
purpose of hedging interest rate risk to the General Partner or the Borrower.
7.18 Limitation on Variable Rate Indebtedness. The General Partner and the
----------------------------------------
Borrower shall, at the request of the Required Lenders, enter into such interest
rate protection agreements as may be required to maintain at all times all
Funded Debt which bears interest at a rate that is not fixed for the full period
through the Revolving Facility Termination Date at fifty percent (50%) or less
of total Funded Debt, provided that the Required Lenders shall not require the
50
General Partner or the Borrower to enter into a specific interest rate
protection agreement that would cause the General Partner to lose its REIT
status.
7.19 Consolidated Net Worth. The General Partner, as of the last day of any
----------------------
fiscal quarter, shall maintain a Consolidated Net Worth of not less than the sum
of (i) $450,000,000 plus (ii) seventy-five percent (75%) of the net proceeds
received by the General Partner (net of customary related fees and expenses) in
connection with any offering of stock or other ownership interest in the General
Partner after the Original Closing Date.
7.20 Indebtedness and Cash Flow Covenants. The General Partner on a
------------------------------------
consolidated basis with the Borrower and their Subsidiaries shall not permit:
(i) as of the last day of any fiscal quarter, the ratio of (A)
EBITDA to (B) Interest Expense for the four (4) fiscal quarters
then ended to be less than, from the Closing Date through
December 31, 1999, 2.5 to 1.0 and thereafter, 2.75 to 1.0;
provided, however, that until four (4) full fiscal quarters have
elapsed after the Original Closing Date, Interest Expense will
be calculated by annualizing the Interest Expense for those full
fiscal quarters that have elapsed since the Original Closing
Date;
(ii) as of the last day of any fiscal quarter, the ratio of (A)
EBITDA to (B) Fixed Charges for the four (4) fiscal quarters
then ended to be less than, from the Closing Date through
December 31, 1999, 1.85 to 1.0 and thereafter, 2.0 to 1.0;
provided, however, that until four (4) full fiscal quarters have
elapsed after the Original Closing Date, Fixed Charges will be
calculated by annualizing the Fixed Charges for those full
fiscal quarters that have elapsed since the Original Closing
Date;
(iii) as of any day, Consolidated Total Indebtedness to exceed fifty
percent (50%) of Capitalization Value;
(iv) as of any day, the Value of Unencumbered Assets to be less than
2.0 times the Consolidated Unsecured Indebtedness; or
(v) as of any day, Consolidated Secured Indebtedness to exceed
twenty percent (20%) of Capitalization Value.
7.21 Environmental Matters. The General Partner and the Borrower will and
---------------------
will cause each of their Subsidiaries to:
7.21.1 comply with, and use its best efforts to ensure
compliance by all tenants and subtenants, if any, with, all applicable
Environmental Laws and obtain and comply with and maintain, and use
its best efforts to ensure that all tenants and subtenants obtain and
comply with and maintain, any and all licenses, approvals,
notifications, registrations or permits required by applicable
Environmental Laws, except to the extent that failure to do so could
not be reasonably expected to have a Material Adverse Effect;
51
7.21.2 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, except to the extent that
(a) the same are being contested in good faith by appropriate
proceedings and the pendency of such proceedings could not be
reasonably expected to have a Material Adverse Effect, or (b) the
General Partner has determined in good faith that contesting the same
is not in the best interests of the General Partner, the Borrower and
their Subsidiaries and the failure to contest the same could not be
reasonably expected to have a Material Adverse Effect; or
7.21.3 defend, indemnify and hold harmless the Administrative
Agent and each Lender, and their respective employees, agents,
officers and directors, from and against any claims, demands,
penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature known or unknown, contingent or
otherwise, arising out of, or in any way relating to the violation of,
noncompliance with or liability under any Environmental Laws
applicable to the operations of the General Partner, the Borrower,
their Subsidiaries or the Projects, or any orders, requirements or
demands of Governmental Authorities related thereto, including,
without limitation, attorney's and consultant's fees, investigation
and laboratory fees, response costs, court costs and litigation
expenses, except to the extent that any of the foregoing arise out of
the gross negligence or willful misconduct of the party seeking
indemnification therefor. This indemnity shall continue in full force
and effect regardless of the termination of this Agreement; and
7.21.4 prior to the acquisition of a new Project after the
Closing Date, perform or cause to be performed an environmental
investigation, which investigation shall at a minimum comply with the
specifications and procedures attached hereto as Exhibit G. In
---------
connection with any such investigation, Borrower shall cause to be
prepared a report of such investigation, to be made available to any
Lender upon request, for informational purposes and to assure
compliance with the specifications and procedures.
7.22 Control of the General Partner. The General Partner and the Borrower
------------------------------
will not suffer or permit to occur a "DGP Change of Control" (as such term is
defined in the Note Purchase Agreements (as in effect on the date hereof).
7.23 Approved Operating Leases. The Borrower shall lease at least 90% (by
-------------------------
Capitalization Value) of its Projects to Approved Operators under Approved
Operating Leases.
7.24 Borrower's Partnership Agreement. The General Partner shall not
--------------------------------
consent to any changes to Borrower's partnership agreement without the prior
written consent of the Required Lenders, provided that without such prior
consent the General Partner may consent to (i) immaterial changes that do not
adversely affect the Lenders, (ii) any changes necessary to maintain the General
Partner's status as a real estate investment trust, and (iii) changes necessary
52
to permit an additional common or preferred equity offering that do not
adversely affect the Lenders.
7.25 General Partner's Assets. The General Partner shall not invest in or
------------------------
own any material assets directly other than its partnership interest in
Borrower.
7.26 Notice of Rating Change. The Borrower shall notify the Administrative
-----------------------
Agent promptly if there is any change in the long term unsecured debt rating
from Xxxxx'x, S&P or the National Association of Insurance Commissioners of
either the General Partner or the Borrower.
7.27 Year 2000 Compliance. The Borrower will promptly notify the
--------------------
Administrative Agent in the event the Borrower discovers or determines that any
computer application (including those of its suppliers and vendors) that is
material to its or any of its Subsidiaries' business and operations will not be
Year 2000 compliant on a timely basis, except to the extent that such failure
could not reasonably be expected to have a Material Adverse Effect.
7.28 Operating Leases. The Borrower shall not, without the prior written
----------------
consent of the Required Lenders, modify, amend, or terminate any Approved
Operating Lease if such modification, amendment or termination is reasonably
anticipated to be adverse to the Borrower or Lenders in any material respect.
7.29 Capital Expenditures. The Borrower shall not make any capital
--------------------
expenditures with respect to any Property unless an Approved Operator under an
Approved Operating Lease or the tenant under a lease otherwise permitted
hereunder has agreed in writing to compensate Borrower for the cost of such
capital expenditure through the payment of increased rental under such Approved
Operating Lease or lease, provided such Approved Operator or tenant shall
maintain, at its sole expense, such capital expenditure in a manner consistent
with its original condition, subject to normal wear and tear, throughout the
term of the Approved Operating Lease or lease.
7.30 No Negative Pledge. The General Partner and the Borrower will not, and
------------------
they will not permit their Subsidiaries to, enter into any agreement with any
Person after the date hereof which prohibits the ability of the General Partner,
the Borrower or any of their Subsidiaries to create, incur, assume or suffer to
exist any Lien on the assets of the General Partner, the Borrower or any of
their Subsidiaries other than any agreement in favor of the Administrative Agent
and the Lenders, provided, however, that this Section 7.30 shall not apply to
restrictions under Capitalized Leases with respect to the Property subject
thereto or to Indebtedness secured by Liens permitted hereunder, provided such
restrictions are by their terms effective only against the assets subject to
such Liens.
ARTICLE VIII
DEFAULTS
The occurrence of any one or more of the following events shall constitute
a Default:
8.1 Nonpayment of Principal. Nonpayment of any principal payment on any
-----------------------
Note when due.
53
8.2 Nonpayment of Other Amounts. Nonpayment of interest upon any Note or of
---------------------------
any Revolving Commitment Fee or other payment Obligations under any of the Loan
Documents within five (5) Business Days after the same becomes due.
8.3 Breach of Certain Covenants. The breach of any of the terms or
---------------------------
provisions of Sections 7.2, 7.10 through 7.20, 7.22, 7.24 and 7.25.
------------ ---- ---- ---- ---- ----
8.4 Representation of Warranty Untrue. Any representation or warranty made
---------------------------------
or deemed made by or on behalf of the General Partner, the Borrower or any of
their Subsidiaries to the Lenders or the Administrative Agent under or in
connection with this Agreement, any Loan, or any certificate or information
delivered in connection with this Agreement or any other Loan Document shall be
materially false on the date as of which made.
8.5 Breach of Other Provisions. The breach (other than a breach which
--------------------------
constitutes a Default under Section 8.1, 8.2, 8.3 or 8.4) of any of the terms or
provisions of this Agreement or any other Loan Document which is not remedied
within thirty (30) days after written notice from the Administrative Agent or
any Lender.
8.6 Material Indebtedness. (i) Any failure of the General Partner, the
---------------------
Borrower or any of their Subsidiaries or of AGC to pay when due any payment due
under any Funded Debt or lease obligations aggregating in excess of $5,000,000
("Material Indebtedness") after giving effect to any applicable grace period
---------------------
thereunder; or (ii) any default in the performance of any term, provision or
condition contained in any agreement under which any such Material Indebtedness
was created or is governed, or any other event shall occur or condition exist,
the effect of which is to cause, or to permit the holder or holders of such
Material Indebtedness to cause, such Material Indebtedness to become due prior
to its stated maturity; or (iii) any Material Indebtedness of the General
Partner, the Borrower, any of their Subsidiaries shall or of AGC shall be
declared to be due and payable or required to be prepaid or repurchased (other
than by a regularly scheduled payment) prior to the stated maturity thereof.
8.7 Voluntary Bankruptcy. The General Partner, the Borrower or any of their
--------------------
Subsidiaries or AGC shall (i) have an order for relief entered with respect to
it under the federal bankruptcy laws as now or hereafter in effect, (ii) make an
assignment for the benefit of creditors, (iii) apply for, seek, consent to, or
acquiesce in, the appointment of a receiver, custodian, trustee, examiner,
liquidator or similar official for it or any Substantial Portion of its
Property, (iv) institute any proceeding seeking an order for relief under the
federal bankruptcy laws as now or hereafter in effect or seeking to adjudicate
it as a bankrupt or insolvent, or seeking dissolution, winding up, liquidation,
reorganization, arrangement, adjustment or composition of it or its debts under
any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, (v) take any corporate action to authorize or effect any of the
foregoing actions set forth in this Section 8.7, (vi) not pay, or admit in
-----------
writing its inability to pay, its debts generally as they become due.
8.8 Involuntary Bankruptcy. A receiver, trustee, examiner, liquidator or
----------------------
similar official shall be appointed for the General Partner, the Borrower or any
of their Subsidiaries or for AGC, or a proceeding described in Section 8.7(iv)
---------------
shall be instituted against the General Partner, the
54
Borrower or any such Subsidiary or AGC and such appointment continues
undischarged or such proceeding continues undismissed or unstayed for a period
of sixty (60) consecutive days.
8.9 Condemnation. Any court, government or governmental agency shall
------------
condemn, seize or otherwise appropriate, or take custody or control of (each a
"Condemnation"), all or any portion of the Projects of the Borrower and its
------------
Subsidiaries which, when taken together with all other Property of the Borrower
and its Subsidiaries so condemned, seized, appropriated, or taken custody or
control of, during the twelve-month period ending with the month in which any
such Condemnation occurs, constitutes a Substantial Portion of their Property.
8.10 Judgments. The General Partner, the Borrower or any of their
---------
Subsidiaries or AGC shall fail within sixty (60) days to pay, bond or otherwise
discharge any judgments or orders for the payment of money in an amount which,
when added to all other judgments or orders outstanding against the General
Partner, the Borrower or any Subsidiary or AGC would exceed $10,000,000 in the
aggregate, which have not been stayed on appeal or otherwise appropriately
contested in good faith.
8.11 AGC. AGC shall (i) have failed by December 31, 1999 to have extended
---
the termination and maturity dates of all of its existing credit facilities to
match or extend beyond the Revolving Facility Termination Date hereunder; (ii)
have failed to maintain at all times prior to the Revolving Facility Termination
Date hereunder, calculated at the end of each fiscal quarter of AGC, a ratio of
(A) EBITDA (except it shall be as reported by AGC after adjustment to add to
operating income the amount of membership initiation fees not included in
operating income due to the requirement of GAAP to recognize such fees as income
over a period of time on a straight line basis) plus GAAP rental expense, in
----
each case for the most recent four (4) fiscal quarters for which financial
results have been reported to (B) GAAP rental expense plus GAAP interest expense
----
of at least 1.1 to 1.0, in each case for the most recent four (4) fiscal
quarters for which financial results have been reported, (iii) have failed to
make any payment of rent or other material monetary obligation under any
Approved Operating Lease with the Borrower within thirty (30) days after the due
date thereof or (iv) enter into any merger, consolidation reorganization or
liquidation or transfer or otherwise dispose of all or Substantial Portion of
its assets, except for such transactions that occur between wholly-owned
Subsidiaries of AGC and the merger of Golf Enterprises, Inc. into AGC, and other
mergers where AGC is the surviving entity and such merger is not accomplished
through a hostile takeover.
8.12 Pledge of AGC Ownership Interests. Less than sixty-five percent (65%)
---------------------------------
of the total ownership interests in AGC shall be unencumbered by any pledge or
other security interest therein.
8.13 Ownership of AGC. Less than sixty-five percent (65%) of the total
----------------
ownership interests in AGC or of the total voting power shall be held, in the
aggregate, by Xxxxx X. Xxxxx, Dallas Price and/or their children and
grandchildren and respective spouses of any of the foregoing or by trusts in
which such Persons hold the entire beneficial interest or other entities wholly
owned and controlled by such Persons.
8.14 Multiemployer Plan Withdrawal Liability. The General Partner, the
---------------------------------------
Borrower or any other member of the Controlled Group shall have been notified by
the sponsor of a
55
Multiemployer Plan that it has incurred withdrawal liability to such
Multiemployer Plan in an amount which, when aggregated with all other amounts
required to be paid to Multiemployer Plans by the General Partner, the Borrower
or any other member of the Controlled Group as withdrawal liability (determined
as of the date of such notification), exceeds $1,000,000 or requires payments
exceeding $250,000 per annum.
8.15 Multiemployer Plan Termination. The General Partner, the Borrower or
------------------------------
any other member of the Controlled Group shall have been notified by the sponsor
of a Multiemployer Plan that such Multiemployer Plan is in reorganization or is
being terminated, within the meaning of Title IV of ERISA, if as a result of
such reorganization or termination the aggregate annual contributions of the
General Partner, the Borrower and the other members of the Controlled Group
(taken as a whole) to all Multiemployer Plans which are then in reorganization
or being terminated have been or will be increased over the amounts contributed
to such Multiemployer Plans for the respective plan years of each such
Multiemployer Plan immediately preceding the plan year in which the
reorganization or termination occurs by an amount exceeding $250,000.
8.16 Environmental Remediation. Failure to remediate within the time period
-------------------------
permitted by law or governmental order, after all administrative hearings and
appeals have been concluded (or within a reasonable time in light of the nature
of the problem if no specific time period is so established), material
environmental problems related to Projects of the Borrower and its Subsidiaries
if the affected Projects have an aggregate book value in excess of $10,000,000.
8.17 Revocation of Guaranty. The revocation or attempted revocation of any
----------------------
Guaranty.
ARTICLE IX
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
9.1 Acceleration. If any Default described in Section 8.7 or Section 8.8
------------ ----------- -----------
occurs with respect to the General Partner or the Borrower, the obligations of
the Revolving Lenders to make Loans and of the Issuing Bank to issue Facility
Letters of Credit hereunder shall automatically terminate and the Obligations
shall immediately become due and payable without any election or action on the
part of the Administrative Agent or any Lender. If any Default other than those
described in Section 8.7 or Section 8.8 occurs, (i) the Required Revolving
----------- -----------
Lenders may terminate or suspend the obligations of the Revolving Lenders to
make Revolving Loans hereunder and to issue Facility Letters of Credit and the
Required Lenders may declare the Obligations to be due and payable, or both,
whereupon the Obligations shall become immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which the Borrower
hereby expressly waives.
In addition to the foregoing, following the occurrence of a Default and so
long as any Facility Letter of Credit has not been fully drawn and has not been
cancelled or expired by its terms, upon demand by the Administrative Agent the
Borrower shall deposit in the Letter of Credit Collateral Account cash in an
amount equal to the aggregate undrawn face amount of all
56
outstanding Facility Letters of Credit and all fees and other amounts due or
which may become due with respect thereto. The Borrower hereby pledges and
assigns to the Administrative Agent on behalf of the Lenders, and hereby grants
a security interest to the Administrative Agent on behalf of the Lenders in, the
Letter of Credit Collateral Account. The Borrower shall have no control over
funds in the Letter of Credit Collateral Account, which funds will be invested
by the Administrative Agent from time to time at its discretion in certificates
of deposit of First Chicago having a maturity not exceeding 30 days. Such funds
shall be promptly applied by the Administrative Agent to reimburse any Issuing
Bank for drafts drawn from time to time under the Facility Letters of Credit.
Such funds, if any, remaining in the Letter of Credit Collateral Account
following the payment of all Obligations in full shall, unless Administrative
Agent is otherwise directed by a court of competent jurisdiction, be promptly
paid over to the Borrower.
If, within ten (10) days after acceleration of the maturity of the
Obligations or termination of the obligations of the Revolving Lenders to make
Revolving Loans hereunder or to issue Facility Letters of Credit as a result of
any Default (other than any Default as described in Section 8.7 or 8.8 with
----------- ---
respect to the Borrower) and before any judgment or decree for the payment of
the Obligations shall have been obtained or entered, (i) the Required Revolving
Lenders (in the case of termination of the obligation to make Revolving Loans or
issue Facility Letters of Credit) or (ii) the Required Lenders (in the case of
an acceleration) shall so direct, the Administrative Agent shall, by notice to
the Borrower, rescind and annul such acceleration and/or termination.
9.2 Amendments. Subject to the provisions of this Article IX, the Required
----------
Revolving Lenders and the Required Term Lenders (or the Administrative Agent
with the consent in writing of both the Required Revolving Lenders and Required
Term Lenders) and the Borrower may enter into agreements supplemental hereto for
the purpose of adding or modifying any provisions to the Loan Documents or
changing in any manner the rights of the Lenders or the Borrower hereunder or
waiving any Default hereunder (any of the foregoing being referred to as a
"Modification"); provided, however, that any such Modification with respect to
------------ -------- -------
the matters described below shall require the consent of the number of Lenders
so indicated below:
(a) The following Modifications shall require the consent of all
Lenders:
(i) Releasing the General Partner from the Guaranty;
(ii) Reducing the percentage specified in the definition of
Required Lenders, Super Majority Lenders, Required
Revolving Lenders, or Required Term Lenders;
(iii) Increasing the amount of the Aggregate Commitment;
(iv) Permitting the Borrower to assign or allow another Person
to assume its rights under this Agreement, other than
pursuant to a merger or other transaction permitted or
consented to hereunder;
(v) Amending this Section 9.2;
-----------
57
(vi) Amending clause (iv) of Section 7.20 or any of the defined
------------
terms contained therein; and
(vii) Subordinating the Obligations to any other Indebtedness of
the Borrower or the Guarantor.
(b) The following Modifications shall require the consent of the Super
Majority Lenders:
(i) Amending any of clauses (i) or (iii) of Section 7.20 or
----
any of the defined terms contained therein.
(c) The following Modifications shall require the consent of all
Revolving Lenders in addition to the consent of the Required Aggregate
Lenders:
(i) Extending the Revolving Facility Termination Date;
(ii) Forgiving all or any portion of the principal amount of
any Revolving Loan or accrued interest thereon or the
Revolving Commitment Fee;
(iii) Modifying the Applicable Margins for Revolving Advances or
otherwise changing the interest rate options available for
Revolving Advances; and
(iv) Extending the time of payment of any of the Obligations
relating to the Revolving Facility.
(d) The following Modifications shall require the consent of all Term
Lenders in addition to the consent of the Required Aggregate Lenders:
(i) Extending the Term Facility Termination Date;
(ii) Forgiving all or any portion of the principal amount of
the Term Loan or accrued interest thereon;
(iii) Modifying the Applicable Margins for Term Advances or
otherwise changing the interest rate options available for
Term Advances; and
(iv) Extending the time of payment of any of the Obligations
relating to the Term Facility, including any modification
of Section 2.8(b) regarding mandatory prepayments of the
Term Facility.
(e) Any Modification not referenced in subsections (a) through (d)
which pertains to a term or provision applicable only to either the Term
Facility or the Revolving Facility shall require the consent of the
Required Term Lenders or Required Revolving Lenders (as applicable) in
addition to the Required Aggregate Lenders, except
58
that in addition to the foregoing required consents, no increase in the
Applicable Margin for the Revolving Facility or modification of the
Revolving Facility Termination Date (except as contemplated by Section
2.14) shall be effective without the consent of the Required Term Lenders.
(f) No amendment of any provision of this Agreement relating to the
Administrative Agent shall be effective without the written consent of the
Administrative Agent, and no amendment increasing either the Term
Commitment or the Revolving Commitment of any Lender shall be effective
without the written consent of such Lender.
9.3 Preservation of Rights. No delay or omission of the Lenders or the
----------------------
Administrative Agent to exercise any right under the Loan Documents shall impair
such right or be construed to be a waiver of any Default or an acquiescence
therein, and the making of a Loan notwithstanding the existence of a Default or
the inability of the Borrower to satisfy the conditions precedent to such Loan
shall not constitute any waiver or acquiescence. Any single or partial exercise
of any such right shall not preclude other or further exercise thereof or the
exercise of any other right, and no waiver, amendment or other variation of the
terms, conditions or provisions of the Loan Documents whatsoever shall be valid
unless in writing signed by the Lenders required pursuant to Section 9.2, and
-----------
then only to the extent in such writing specifically set forth. All remedies
contained in the Loan Documents or by law afforded shall be cumulative and all
shall be available to the Administrative Agent and the Lenders until the
Obligations have been paid in full.
ARTICLE X
GENERAL PROVISIONS
10.1 Survival of Representations. All representations and warranties of the
---------------------------
Borrower contained in this Agreement shall survive delivery of the Notes and the
making of the Loans herein contemplated.
10.2 Governmental Regulation. Anything contained in this Agreement to the
-----------------------
contrary notwithstanding, no Lender shall be obligated to extend credit to the
Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
10.3 Taxes. Any taxes (excluding federal, state and local income or
-----
franchise or other taxes on the overall net income of any Lender) or other
similar assessments or charges made by any governmental or revenue authority in
respect of the Loan Documents shall be paid by the Borrower, together with
interest and penalties, if any (to the extent such interest and penalties do not
result from delay by any Lender).
10.4 Headings. Section headings in the Loan Documents are for convenience
--------
of reference only, and shall not govern the interpretation of any of the
provisions of the Loan Documents.
10.5 Entire Agreement. The Loan Documents embody the entire agreement and
----------------
understanding among the Borrower, the General Partner, the Administrative Agent
and the Lenders and supersede all prior commitments, agreements and
understandings among the
59
Borrower, the Administrative Agent and the Lenders relating to the subject
matter thereof, except for the agreement of the Borrower to pay certain fees to
the Administrative Agent as set forth in the Administrative Agent's Fee Letter
referred to in Section 2.5 and the agreement of the Administrative Agent to pay
-----------
certain fees to the Lenders.
10.6 Several Obligations; Benefits of this Agreement. The respective
-----------------------------------------------
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other (except to the extent to which the
Administrative Agent is authorized to act as such). The failure of any Lender to
perform any of its obligations hereunder shall not relieve any other Lender from
any of its obligations hereunder. This Agreement shall not be construed so as to
confer any right or benefit upon any Person other than the parties to this
Agreement and their respective successors and assigns.
10.7 Expenses; Indemnification. The Borrower shall reimburse the Arrangers
-------------------------
on demand for any reasonable costs, internal charges and reasonable out-of-
pocket expenses (including, without limitation, all reasonable fees for
consultants and reasonable fees and expenses for attorneys for the Arrangers,
which attorneys may be employees of the Arrangers) paid or incurred by the
Arrangers (whether in their capacity as arrangers, or, in the case of First
Chicago, in its capacity as Administrative Agent) in connection with the
preparation, negotiation, execution, delivery, review, amendment, modification,
and administration of the Loan Documents. The Borrower also agrees to reimburse
the Arrangers and the Lenders for any reasonable costs, internal charges and
reasonable out-of-pocket expenses (including, without limitation, all reasonable
fees and expenses for attorneys for the Arrangers and the Lenders, which
attorneys may be employees of the Arrangers or the Lenders) paid or incurred by
the Arrangers (whether in their capacity as arrangers, or, in the case of First
Chicago, in its capacity as Administrative Agent) or any Lender in connection
with the collection and enforcement of the Loan Documents or the Obligations
(including, without limitation, any negotiation of any restructuring or workout
whether or not consummated). The Borrower further agrees to indemnify the
Administrative Agent, the Arrangers and each Lender and their directors,
officers and employees against all losses, claims, damages, penalties,
judgments, liabilities and reasonable expenses (including, without limitation,
all expenses of litigation or preparation therefor whether or not such entity is
a party thereto) which any of them may pay or incur arising out of or relating
to this Agreement, the other Loan Documents, the Projects, the transactions
contemplated hereby or the direct or indirect application or proposed
application of the proceeds of any Loan hereunder, except to the extent arising
from the gross negligence or willful misconduct of the person seeking
indemnification. The obligations of the Borrower under this Section 10.7 shall
------------
survive the termination of this Agreement.
10.8 Reserved.
--------
10.9 Accounting. Except as provided to the contrary herein, all accounting
----------
terms used herein shall be interpreted and all accounting determinations
hereunder shall be made in accordance with GAAP.
10.10 Severability of Provisions. Any provision in any Loan Document that
--------------------------
is held to be inoperative, unenforceable, or invalid in any jurisdiction shall,
as to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that
60
jurisdiction or the operation, enforceability, or validity of that provision in
any other jurisdiction, and to this end the provisions of all Loan Documents are
declared to be severable.
10.11 Nonliability of Lenders. The relationship between the General Partner
-----------------------
and the Borrower, on the one hand, and the Lenders, the Arrangers and the
Administrative Agent, on the other, shall be solely that of borrower and lender.
Neither the Administrative Agent, the Arrangers nor any Lender shall have any
fiduciary responsibilities to the General Partner and the Borrower. Neither the
Administrative Agent, the Arrangers nor any Lender undertakes any responsibility
to the Borrower to review or inform the Borrower of any matter in connection
with any phase of the Borrower's business or operations.
10.12 Publicity. The Lenders shall have the right to publish a tombstone
---------
publicizing the transaction contemplated hereby without the consent of the
Borrower or the General Partner; provided, however, that the Lenders shall first
provide the Borrower and the General Partner the opportunity to review the
proposed tombstone.
10.13 CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
-------------
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
10.14 CONSENT TO JURISDICTION. THE GENERAL PARTNER AND THE BORROWER EACH
-----------------------
HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF (i) ANY UNITED
STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO AND (ii) ANY UNITED
STATES FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK CITY IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS AND THE
GENERAL PARTNER AND THE BORROWER EACH HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS
IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO
THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT
SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE
ADMINISTRATIVE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE GENERAL
PARTNER OR THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL
PROCEEDING BY THE GENERAL PARTNER OR THE BORROWER AGAINST THE ADMINISTRATIVE
AGENT OR ANY LENDER OR ANY AFFILIATE OF THE ADMINISTRATIVE AGENT OR ANY LENDER
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED
TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN
CHICAGO, ILLINOIS OR NEW YORK, NEW YORK.
10.15 WAIVER OF JURY TRIAL. THE GENERAL PARTNER, THE BORROWER, THE
--------------------
ADMINISTRATIVE AGENT AND EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY,
61
ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING
OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP
ESTABLISHED THEREUNDER.
10.16 Confidentiality. Each Lender agrees to hold any non-public
---------------
confidential information which it may receive from the Borrower pursuant to this
Agreement in confidence, except for disclosure (i) to its affiliates and to
other Lenders and their respective affiliates, (ii) to legal counsel,
accountants, and other professional advisors to such Lender or to a Transferee,
(iii) to regulatory officials, (iv) as required by law, regulation, or legal
process, (v) to such Lender's direct or indirect contractual counterparts in
swap agreements or to legal counsel, accountants and other professional advisors
to such counterparts, (vi) permitted by Section 13.4, (vii) of information that
------------
was or becomes generally available to the public other than by disclosure by
such Lender, or (viii) to the extent reasonably required in connection with the
enforcement of this Agreement or any other Loan Documents.
ARTICLE XI
THE ADMINISTRATIVE AGENT AND AGREEMENTS AMONG LENDERS
11.1 Appointment. Subject to the provisions of Section 11.11, The First
----------- -------------
National Bank of Chicago is hereby appointed Administrative Agent hereunder and
under each other Loan Document, and each of the Lenders irrevocably authorizes
the Administrative Agent to act as the agent of such Lender. The Administrative
Agent agrees to act as such upon the express conditions contained in this
Article XI. The Administrative Agent shall not have a fiduciary relationship in
----------
respect of the Borrower or any Lender by reason of this Agreement. The
Administrative Agent agrees to administer the Term Facility and Revolving
Facility consistent with the manner in which it administers loans held for its
own account.
11.2 Powers. The Administrative Agent shall have and may exercise such
------
powers under the Loan Documents as are specifically delegated to the
Administrative Agent by the terms of each thereof, together with such powers as
are reasonably incidental thereto. The Administrative Agent shall have no
implied duties to the Lenders, or any obligation to the Lenders to take any
action thereunder except any action specifically provided by the Loan Documents
to be taken by the Administrative Agent.
11.3 General Immunity. Neither the Administrative Agent nor any of its
----------------
directors, officers, agents or employees shall be liable to the Borrower, the
Lenders or any Lender for any action taken or omitted to be taken by it or them
hereunder or under any other Loan Document or in connection herewith or
therewith except for its or their own gross negligence or willful misconduct.
11.4 No Responsibility for Loans, Recitals, etc. Neither the Administrative
-------------------------------------------
Agent nor any of its directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into, or verify (i) any
statement, warranty or representation made in connection with any Loan Document
or any borrowing hereunder; (ii) the performance or observance of any of the
covenants or agreements of any obligor under any Loan Document, including,
without limitation, any agreement by an obligor to furnish information directly
to each Lender; (iii) the
62
satisfaction of any condition specified in Article V, except receipt of items
---------
required to be delivered to the Administrative Agent; (iv) the validity,
effectiveness or genuineness of any Loan Document or any other instrument or
writing furnished in connection therewith; or (v) the value, sufficiency,
creation, perfection or priority of any interest in any collateral security. The
Administrative Agent shall have no duty to disclose to the Lenders information
that is not required to be furnished by the Borrower to the Administrative Agent
at such time, but is voluntarily furnished by the Borrower to the Administrative
Agent (either in its capacity as Administrative Agent or in its individual
capacity).
11.5 Action on Instructions of Lenders. The Administrative Agent shall in
---------------------------------
all cases be fully protected in acting, or in refraining from acting, hereunder
and under any other Loan Document in accordance with written instructions signed
by the Lenders required by Article IX, and such instructions and any action
taken or failure to act pursuant thereto shall be binding on all of the Lenders
and on all holders of Notes. The Administrative Agent shall be fully justified
in failing or refusing to take any action hereunder and under any other Loan
Document unless it shall first be indemnified to its satisfaction by the Lenders
pro rata against any and all liability, cost and expense that it may incur by
reason of taking or continuing to take any such action.
11.6 Employment of Agents and Counsel. The Administrative Agent may execute
--------------------------------
any of its duties as Administrative Agent hereunder and under any other Loan
Document by or through employees, agents, and attorneys-in-fact and so long as
it exercises reasonable care in the selection of such parties, the
Administrative Agent shall not be answerable to the Lenders, except as to money
or securities received by it or its authorized agents, for the default or
misconduct of any such parties. The Administrative Agent shall be entitled to
advice of counsel concerning all matters pertaining to the agency hereby created
and its duties hereunder and under any other Loan Document.
11.7 Reliance on Documents; Counsel. The Administrative Agent shall be
------------------------------
entitled to rely upon any Note, notice, consent, certificate, affidavit, letter,
telegram, statement, paper or document believed by it to be genuine and correct
and to have been signed or sent by the proper Person or Persons, and, in respect
to legal matters, upon the opinion of counsel selected by the Administrative
Agent, which counsel may be employees of the Administrative Agent.
11.8 Administrative Agent's Reimbursement and Indemnification. The Lenders
--------------------------------------------------------
agree to reimburse and indemnify the Administrative Agent ratably in proportion
to their respective portions of the Aggregate Commitment (i) for any reasonable
amounts not reimbursed by the Borrower for which the Administrative Agent is
entitled to reimbursement by the Borrower under the Loan Documents including
reasonable out-of-pocket expenses in connection with the preparation, execution,
delivery of the Loan Documents, (ii) for any other reasonable out-of-pocket
expenses not reimbursed by the Borrower incurred by the Administrative Agent on
behalf of the Lenders, in connection with the administration and enforcement of
the Loan Documents and (iii) for any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever which may be imposed on, incurred by or asserted
against the Administrative Agent in any way relating to or arising out of the
Loan Documents or any other document delivered in connection therewith or the
transactions contemplated thereby, or the enforcement of any of the terms
thereof or of any such other documents, provided that no Lender shall be liable
--------
for any of the foregoing to the extent they
63
arise from the gross negligence or willful misconduct of the Administrative
Agent. The obligations of the Lenders under this Section 11.8 shall survive
------------
payment of the Obligations and termination of this Agreement.
11.9 Rights as a Lender. In the event the Administrative Agent is a Lender,
------------------
the Administrative Agent shall have the same rights and powers and the same
duties and obligations hereunder and under any other Loan Document as any Lender
and may exercise the same as though it were not the Administrative Agent, and
the term "Lender" or "Lenders" shall, at any time when the Administrative Agent
is a Lender, unless the context otherwise indicates, include the Administrative
Agent in its individual capacity. The Administrative Agent may accept deposits
from, lend money to, and generally engage in any kind of trust, debt, equity or
other transaction, in addition to those contemplated by this Agreement or any
other Loan Document, with the Borrower or any of its Subsidiaries in which the
Borrower or such Subsidiary is not restricted hereby from engaging with any
other Person.
11.10 Lender Credit Decision. Each Lender acknowledges that it has,
----------------------
independently and without reliance upon the Administrative Agent or any other
Lender and based on the financial statements prepared by the Borrower and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and without
reliance upon the Administrative 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 decisions in taking or not taking action under this
Agreement and the other Loan Documents.
11.11 Successor Administrative Agent. The Administrative Agent may resign
------------------------------
at any time by giving written notice thereof to the Lenders and the Borrower,
and the Administrative Agent shall be deemed to have automatically resigned if
it is no longer a Lender, such resignation in either case to be effective upon
the appointment of a successor Administrative Agent or, if no successor
Administrative Agent has been appointed, forty-five days after the retiring
Administrative Agent gives notice of its intention to resign or ceases to be a
Lender, as the case may be. The Administrative Agent may be removed at any time
with good cause by written notice received by the Administrative Agent from the
Required Lenders, such removal to be effective on the date specified by the
Required Lenders. Upon any such resignation or removal, the Required Lenders
shall have the right to appoint, on behalf of the Borrower and the Lenders and,
provided there exists no Default or Unmatured Default hereunder, with the
consent (not to be unreasonably withheld) of the Borrower, a successor
Administrative Agent. If no successor Administrative Agent shall have been so
appointed by the Required Lenders within thirty days after the resigning
Administrative Agent's giving notice of its intention to resign, then the
resigning Administrative Agent may appoint, on behalf of the Borrower and the
Lenders and, provided there exists no Default or Unmatured Default hereunder,
with the consent (not to be unreasonably withheld) of the Borrower, a successor
Administrative Agent. If the Administrative Agent has resigned or been removed
and no successor Administrative Agent has been appointed within 45 days, the
Lenders shall perform all the duties of the Administrative Agent hereunder and
the Borrower shall make all payments in respect of the Obligations to the
applicable Lender and for all other purposes shall deal directly with the
Lenders. No successor Administrative Agent shall be deemed to be appointed
hereunder until such successor
64
Administrative Agent has accepted the appointment. Any such successor
Administrative Agent shall be a commercial bank (or a subsidiary thereof) having
capital and retained earnings of at least $500,000,000, except that if the
successor Administrative Agent is a subsidiary of a bank, such capital and
retained earnings requirement shall apply only to the parent bank. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the resigning or removed Administrative Agent. Upon the effectiveness of the
resignation or removal of the Administrative Agent, the resigning or removed
Administrative Agent and the successor Administrative Agent shall pro rate any
agency fees, and the resigning or removed Administrative Agent shall be
discharged from its duties and obligations hereunder and under the Loan
Documents. After the effectiveness of the resignation or removal of an
Administrative Agent, the provisions of this Article XI shall continue in effect
for the benefit of such Administrative Agent in respect of any actions taken or
omitted to be taken by it while it was acting as the Administrative Agent
hereunder and under the other Loan Documents.
11.12 Notice of Defaults. If a Lender becomes aware of a Default or
------------------
Unmatured Default, such Lender shall notify the Administrative Agent of such
fact. Upon receipt of such notice that a Default or Unmatured Default has
occurred, the Administrative Agent shall notify each of the Lenders of such
fact.
11.13 Requests for Approval. If the Administrative Agent requests in
---------------------
writing the consent or approval of a Lender, such Lender shall respond and
either approve or disapprove definitively in writing to the Administrative Agent
within ten Business Days (or sooner if such notice specifies a shorter period
for responses based on Administrative Agent's good faith determination that
circumstances exist warranting its request for an earlier response) after such
written request from the Administrative Agent. If the Lender does not so
respond, that Lender shall be deemed to have approved the request, except that
such deemed approval shall not apply to any request requiring the approval of
100% of the Lenders.
11.14 Copies of Documents. Within fifteen Business Days after a request by
-------------------
a Lender to the Administrative Agent for documents furnished to the
Administrative Agent by the Borrower, the Administrative Agent shall provide
copies of such documents to such Lender.
11.15 Defaulting Lenders. At such time as a Lender becomes a Defaulting
------------------
Lender, such Defaulting Lender's right to vote on matters which are subject to
the consent or approval of the Required Lenders, each affected Lender or all
Lenders shall be immediately suspended until such time as the Lender is no
longer a Defaulting Lender. If a Defaulting Lender has failed to fund its pro
rata share of any Advance and until such time as such Defaulting Lender
subsequently funds its pro rata share of such Advance, all Obligations owing to
such Defaulting Lender hereunder shall be subordinated in right of payment, as
provided in the following sentence, to the prior payment in full of all
principal of, interest on and fees relating to the Loans funded by the other
Lenders in connection with any such Advance in which the Defaulting Lender has
not funded its pro rata share (such principal, interest and fees being referred
to as "Senior Loans" for the purposes of this section). All amounts paid by the
------------
Borrower and otherwise due to be applied to the Obligations owing to such
Defaulting Lender pursuant to the terms hereof shall be distributed by the
Administrative Agent to the other Lenders in accordance with their respective
pro rata
65
shares (recalculated for the purposes hereof to exclude the Defaulting Lender)
until all Senior Loans have been paid in full. After the Senior Loans have been
paid in full equitable adjustments will be made in connection with future
payments by the Borrower to the extent a portion of the Senior Loans had been
repaid with amounts that otherwise would have been distributed to a Defaulting
Lender but for the operation of this Section 11.15. This provision governs only
-------------
the relationship among the Administrative Agent, each Defaulting Lender and the
other Lenders; nothing hereunder shall limit the obligation of the Borrower to
repay all Loans in accordance with the terms of this Agreement. The provisions
of this section shall apply and be effective regardless of whether a Default
occurs and is continuing, and notwithstanding (i) any other provision of this
Agreement to the contrary, (ii) any instruction of the Borrower as to its
desired application of payments or (iii) the suspension of such Defaulting
Lender's right to vote on matters which are subject to the consent or approval
of the Required Lenders or all Lenders.
ARTICLE XII
SETOFF; RATABLE PAYMENTS
12.1 Setoff. In addition to, and without limitation of, any rights of the
------
Lenders under applicable law, if the Borrower becomes insolvent, however
evidenced, or any Default occurs, any and all deposits (including all account
balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by any Lender to
or for the credit or account of the Borrower may be offset and applied toward
the payment of the Obligations owing to such Lender, whether or not the
Obligations, or any part hereof, shall then be due. The Lenders agree for the
benefit of each other Lender (but not the Borrower) that any set-off shall first
be applied to the Obligations before being applied to any other Indebtedness
owing to such Lender.
12.2 Ratable Payments. If any Lender, whether by setoff or otherwise, has
----------------
payment made to it upon its Loans (other than payments received pursuant to
Sections 4.1, 4.2 or 4.4) in a greater proportion than that received by any
------------ --- ---
other Lender (based on the total outstanding amount of the Revolving Facility
and Term Facility), such Lender agrees, promptly upon demand, to purchase a
portion of the Loans held by the other Lenders so that after such purchase each
Lender will hold its ratable proportion of Loans. If any Lender, whether in
connection with setoff or amounts which might be subject to setoff or otherwise,
receives collateral or other protection for its Obligations or such amounts
which may be subject to setoff, such Lender agrees, promptly upon demand, to
take such action necessary such that all Lenders share in the benefits of such
collateral ratably in proportion to their Loans. In case any such payment is
disturbed by legal process, or otherwise, appropriate further adjustments shall
be made.
ARTICLE XIII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
13.1 Successors and Assigns. The terms and provisions of the Loan Documents
----------------------
shall be binding upon and inure to the benefit of the Borrower and the Lenders
and their respective successors and assigns, except that (i) the Borrower shall
not have the right to assign its rights or obligations under the Loan Documents
and (ii) any assignment by any Lender must be made in
66
compliance with Section 13.3. Notwithstanding clause (ii) of this Section 13.1,
------------ ------------
any Lender may at any time, without the consent of the Borrower or the
Administrative Agent, assign all or any portion of its rights under this
Agreement and its Notes to a Federal Reserve Bank; provided, however, that no
such assignment shall release the transferor Lender from its obligations
hereunder. The Administrative Agent may treat the payee of any Note as the owner
thereof for all purposes hereof unless and until such payee complies with
Section 13.3 in the case of an assignment thereof or, in the case of any other
------------
transfer, a written notice of the transfer is filed with the Administrative
Agent. Any assignee or transferee of a Note agrees by acceptance thereof to be
bound by all the terms and provisions of the Loan Documents. Any request,
authority or consent of any Person, who at the time of making such request or
giving such authority or consent is the holder of any Note, shall be conclusive
and binding on any subsequent holder, transferee or assignee of such Note or of
any Note or Notes issued in exchange therefor.
13.2 Participations.
--------------
13.2.1 Permitted Participants; Effect. Any Lender, in the
------------------------------
ordinary course of its business and in accordance with applicable law,
at any time, may sell participating interests in any Loan owing to
such Lender, any Note held by such Lender, any Commitment of such
Lender or any other interest of such Lender under the Loan Documents.
Any Person to whom such a participating interest is sold is a
"Participant". In the event of any such sale by a Lender of
-----------
participating interests to a Participant, such Lender's obligations
under the Loan Documents shall remain unchanged, such Lender shall
remain solely responsible to the other parties hereto for the
performance of such obligations, such Lender shall remain the holder
of any such Note for all purposes under the Loan Documents, all
amounts payable by the Borrower under this Agreement shall be
determined as if such Lender had not sold such participating
interests, and the Borrower and the Administrative Agent shall
continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under the Loan Documents.
13.2.2 Voting Rights. Each Lender shall retain the sole right to
-------------
approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other
than any amendment, modification or waiver with respect to any Loan or
Commitment in which such Participant has an interest which forgives
principal, interest or fees or reduces the interest rate or fees
payable with respect to any such Loan or Commitment or postpones any
date fixed for any regularly-scheduled payment of principal of, or
interest or fees on, any such Loan or Commitment or releases any
guarantor of any such Loan or releases any substantial portion of
collateral, if any, securing such Loan.
13.2.3 Benefit of Setoff. The General Partner and the Borrower
-----------------
each agrees that each Participant shall be deemed to have the right of
setoff provided in Section 12.1 in respect of its participating
------------
interest in amounts owing under the Loan Documents to the same extent
as if the amount of its participating interest were owing directly to
it as a Lender under the Loan Documents, provided that each Lender
shall retain the right of setoff provided in Section 12.1 with respect
------------
67
to the amount of participating interests sold to each Participant. The
Lenders agree to share with each Participant, and each Participant, by
exercising the right of setoff provided in Section 12.1, agrees to
------------
share with each Lender, any amount received pursuant to the exercise
of its right of setoff, such amounts to be shared in accordance with
Section 12.2 as if each Participant were a Lender.
------------
13.3 Assignments.
-----------
13.3.1 Permitted Assignments. Any Lender, in the ordinary course
---------------------
of its business and in accordance with applicable law, at any time,
may assign all or any portion (greater than or equal to $5,000,000 per
assignee if it is only a portion of such Lender's interest) of its
rights and obligations under the Loan Documents. Any Person to whom
such rights and obligations are assigned is a "Purchaser". Such
---------
assignment shall be substantially in the form of Exhibit G hereto or
---------
in such other form as may be agreed to by the parties thereto. Any
such assignment made after the initial syndication of the Facility has
been completed by the Arrangers shall also require the consent of the
Borrower, which consent shall not be unreasonably withheld, provided
that no consent of the Borrower shall be required with respect to any
assignment by a Lender to an Affiliate of that Lender or to any other
Lenders or if a Default has occurred and is continuing. Lenders may
hold and assign different percentages in the Revolving Facility and
the Term Facility. The consent of the Administrative Agent shall be
required prior to an assignment becoming effective with respect to a
Purchaser which is not a Lender or an Affiliate thereof, which consent
shall not be unreasonably withheld or delayed.
13.3.2 Effect; Effective Date. Upon (i) delivery to the
----------------------
Administrative Agent of a notice of assignment, substantially in the
form attached as Exhibit J to Exhibit H hereto (a "Notice of
--------- --------- ---------
Assignment"), together with any consents required by Section 13.3.1,
---------- --------------
and (ii) payment by the assigning Lender of a $3,500 fee to the
Administrative Agent for processing such assignment (unless the
assignment is to an affiliate of the Lender in which case no fee shall
be charged), such assignment shall become effective on the effective
date specified in such Notice of Assignment. The Notice of Assignment
shall contain a representation by the Purchaser to the effect that
none of the consideration used to make the purchase of the Commitment
and Loans under the applicable assignment agreement are "plan assets"
as defined under ERISA and that the rights and interests of the
Purchaser in and under the Loan Documents will not be "plan assets"
under ERISA. On and after the effective date of such assignment, such
Purchaser shall for all purposes be a Lender party to this Agreement
and any other Loan Document executed by the Lenders and shall have all
the rights and obligations of a Lender under the Loan Documents, to
the same extent as if it were an original party hereto, and no further
consent or action by the Borrower, the Lenders or the Administrative
Agent shall be required to release the transferor Lender with respect
to the percentage of the Aggregate Commitment and Loans assigned to
such Purchaser. Upon the consummation of any assignment to a Purchaser
pursuant to this Section 13.3.2, the transferor Lender, the
--------------
Administrative Agent and the Borrower shall make appropriate
arrangements so that replacement Notes are issued to such
68
transferor Lender and new Notes or, as appropriate, replacement Notes,
are issued to such Purchaser, in each case in principal amounts
reflecting their Commitment, as adjusted pursuant to such assignment.
13.4 Dissemination of Information. The General Partner and the Borrower
----------------------------
authorize each Lender to disclose to any Participant or Purchaser or any other
Person acquiring an interest in the Loan Documents by operation of law (each a
"Transferee") and any prospective Transferee any and all information in such
----------
Lender's possession concerning the creditworthiness of the General Partner, the
Borrower and their Subsidiaries.
13.5 Tax Treatment. If any interest in any Loan Document is transferred to
-------------
any Transferee which is organized under the laws of any jurisdiction other than
the United States or any state thereof, the transferor Lender shall cause such
Transferee, concurrently with the effectiveness of such transfer, to comply with
the provisions of Section 2.21.
------------
ARTICLE XIV
NOTICES
14.1 Giving Notice. Except as otherwise permitted by Section 2.16 with
------------- ------------
respect to borrowing notices, all notices and other communications provided to
any party hereto under this Agreement or any other Loan Document shall be in
writing or by telex or by facsimile and addressed or delivered to such party at
its address set forth below its signature hereto or at such other address as may
be designated by such party in a notice to the other parties, and, in the case
of a notice to the General Partner or the Borrower, shall be directed to the
attention of its principal accounting officer. Any notice, if mailed and
properly addressed with postage prepaid, shall be deemed given when received;
any notice, if transmitted by telex or facsimile, shall be deemed given when
transmitted (answerback confirmed in the case of telexes).
14.2 Change of Address. The General Partner, the Borrower, the
-----------------
Administrative Agent and any Lender may each change the address for service of
notice upon it by a notice in writing to the other parties hereto.
ARTICLE XV
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart. This Agreement shall be
effective when it has been executed by the Borrower, the Administrative Agent
and the Lenders and each party has notified the Administrative Agent by telex or
telephone that it has taken such action.
[REMAINDER OF PAGE LEFT BLANK]
69
IN WITNESS WHEREOF, the Borrower, the General Partner, the Lenders and the
Administrative Agent have executed this Agreement as of the date first above
written.
NATIONAL GOLF OPERATING PARTNERSHIP, L.P.
By: National Golf Properties, Inc., its General
Partner
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------
Print Name: Xxxxx X. Xxxxxxx
----------------------
Title: President
----------------------------
c/o National Golf Properties, Inc.
0000 00xx Xxxxxx, Xxxxx 0000
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Principal Accounting Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
NATIONAL GOLF PROPERTIES, INC.
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------
Print Name: Xxxxx X. Xxxxxxx
----------------------
Title: President
----------------------------
0000 00/xx/ Xxxxxx, Xxxxx 0000
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Principal Accounting Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Commitments:
Revolving Commitment: $22,500,000.00 THE FIRST NATIONAL BANK OF
Term Commitment: $ 2,500,000.00 CHICAGO, Individually and
Administrative Agent
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------
Print Name: Xxxxxxx X. Xxxxxxxx
------------------------
Title: First Vice President
-----------------------------
One First National Plaza
10th Floor, Mail Suite 0634
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Revolving Commitment: $17,500,000.00 XXXXXXX XXXXX CAPITAL
Term Commitment: $17,500,000.00 CORPORATION, Individually and as
Syndication Agent
By: /s/ Xxxxxx X. Xxxxxx
----------------------------
Print Name: Xxxxxx X. Xxxxxx
--------------------
Title: Vice President
--------------------------
World Financial Center
Xxxxx Xxxxx, 0/xx/ Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Revolving Commitment: $20,000,000.00 ING (U.S.) CAPITAL LLC,
Term Commitment: $0 Individually and as Co-Documentation
Agent and Co-Arranger
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------
Print Name: Xxxxx X. Xxxxxxxx
---------------------
Title: Managing Director
---------------------------
00 Xxxx 00/xx/ Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Revolving Commitment: $25,000,000.00 UNION BANK OF CALIFORNIA, N.A.,
Term Commitment: $0 Individually and as Co-Documentation
Agent
By: /s/ Xxxxxx X. Nations
---------------------------
Print Name: Xxxxxx X. Nations
---------------------
Title: Sr. Vice President
---------------------------
000 X. Xxxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxx Nations
------------------------
Telephone: (000) 000-0000
----------------
Facsimile: (000) 000-0000
----------------
Revolving Commitment: $10,000,000.00 BANKBOSTON, N.A., Individually and
Term Commitment: $10,000,000.00 as Co-Agent
By: /s/ XX Xxxxx
---------------------------
Print Name: XX Xxxxx
---------------------
Title: Vice President
---------------------------
Diversified Finance, XX 00-00-00
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Revolving Commitment: $16,000,000.00 CITY NATIONAL BANK, Individually
Term Commitment: $0 and as Co-Agent
By: /s/ Xxxxxx X. Xxxxx
---------------------------
Print Name: Xxxxxx X. Xxxxx
---------------------
Title: Vice President
---------------------------
000 X. Xxxxxxx Xxxxx, 0/xx/ Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Revolving Commitment: $16,000,000.00 XXXXX FARGO BANK, NATIONAL
Term Commitment: $0 ASSOCIATION, Individually and as Co-Agent
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------
Print Name: Xxxxxxx X. Xxxxxx
---------------------
Title: Vice President
---------------------------
000 X. Xxxxx Xxxxxx, 0/xx/ Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Revolving Commitment: $0 PACIFIC LIFE INSURANCE COMPANY
Term Commitment: $20,000,000.00
By: /s/ T. Xxxxxxx Xxxxxx
-------------------------------
Print Name: T. Xxxxxxx Xxxxxx
-----------------------
Title: Assitant Vice President
----------------------------
By: /s/ X.X. Xxxxxxx
-------------------------------
Print Name: X.X. Xxxxxxx
------------------------
Title: Assistant Secretary
------------------------------
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000-0000
Attention: T. Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Revolving Commitment: $16,000,000.00 AMSOUTH BANK
Term Commitment: $ 0
By: /s/ Xxxxxxxx Xxxxx
---------------------------
Print Name: Xxxxxxxx Xxxxx
---------------------
Title: VP
---------------------------
1900 5/th/ Avenue North, 0/xx/ Xxxxx
XxXxxxx Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Revolving Commitment: $16,000,000.00 CALIFORNIA FEDERAL BANK
Term Commitment: $0
By: /s/ Xxxxx Xxxx
---------------------------
Print Name: Xxxxx Xxxx
---------------------
Title: Senior Vice President
---------------------------
00000 Xxxxxxx Xxxxxxxxx
Xxxxxxx Xxxx, XX 00000
Attention: Xxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Revolving Commitment: $16,000,000.00 FIRST AMERICAN BANK TEXAS, SSB
Term Commitment: $0
By: /s/ Xxx Xxxxxxxxx
---------------------------
Print Name: Xxx Xxxxxxxxx
---------------------
Title: Assistant Vice President
---------------------------
00000 Xxxxxx Xxxxxxx
Xxxxxx, XX 00000
Attention: Xxx Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Revolving Commitment: $5,000,000.00 BANK OF MONTREAL
Term Commitment: $10,000,000.00
By: /s/ X.X. XxXxxxxx
---------------------------
Print Name: X.X. XxXxxxxx
---------------------
Title: Director
---------------------------
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Revolving Commitment: $0 BHF (USA) CAPITAL CORPORATION
Term Commitment: $10,000,000.00
By: /s/ Xxxxxxx X. Xxxxx
---------------------------
Print Name: Xxxxxxx X. Xxxxx
---------------------
Title: Associate
---------------------------
By: /s/ Xxxx X. Xxxxxx
---------------------------
Print Name: Xxxx X. Xxxxxx
---------------------
Title: Vice President
---------------------------
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Revolving Commitment: $10,000,000.00 CREDIT LYONNAIS NEW YORK
Term Commitment: $0 BRANCH
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------
Print Name: Xxxxxx X. Xxxxxxxx
---------------------
Title: First Vice President
---------------------------
1301 Avenue of the America
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Bruno DeFloor
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Revolving Commitment: $10,000,000.00 XXXXXXXX XXXX, XX, XXX XXXX
Term Commitment: $0 AND GRAND CAYMAN BRANCHES
By: /s/ Xxxx X. Xxxxxxx
---------------------------
/s/ Xxxxxxxxxxx X. Saris
---------------------------
Print Name: Xxxx X. Xxxxxxx
---------------------
Xxxxxxxxxxx X. Saris
----------------------
Title: Vice President
---------------------------
Assistant Vice President
---------------------------
Real Estate Finance Group
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxx Xxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
with a copy to:
--------------
Xxxxx Xxxxxxxxxxxx
Dresdner Bank AG
Real Estate Finance Group
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Revolving Commitment: $0 PILGRIM PRIME RATE TRUST
Term Commitment: $10,000,000.00
By: Pilgrim Investments, Inc.,
As its investment manager
By: /s/ Xxxxxx X. Xxxxxx
---------------------------
Print Name: Xxxxxx X. Xxxxxx
---------------------
Title: Vice President
---------------------------
Two Renaissance Square
00 X. Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000-0000
Attention: Xxxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Revolving Commitment: $0 THE TRAVELERS INSURANCE
Term Commitment: $10,000,000.00 COMPANY
By: /s/ Xxxxx X. Xxxxxxxxxx
---------------------------
Print Name: Xxxxx X. Xxxxxxxxxx
---------------------
Title: 2nd Vice President
---------------------------
Xxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Revolving Commitment: $0 MASSACHUSETTS MUTUAL
Term Commitment: $5,000,000.00 LIFE INSURANCE COMPANY
By: /s/ Xxxx X. Xxxxxxx
---------------------------
Print Name: Xxxx X. Xxxxxxx
---------------------
Title: Managing Director
---------------------------
0000 Xxxxx Xxxxxx, Mail Stop F461
Springfield, MA 01111-0001
Attention: Xxxx Xxxxxxx
Telephone: (000)000-0000
Facsimile:
Revolving Commitment: $0 OCTAGON LOAN TRUST
Term Commitment: $5,000,000
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------
Print Name: Xxxxx X. Xxxxxxxx
---------------------
Title: Senior Portfolio Manager
---------------------------
000 Xxxxxxx Xxxxxx, 0/xx/ Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
EXHIBIT A
---------
REVOLVING FACILITY
------------------
PRICING GRID
---------------------------------------------------------------------------------------------------------------------------------
Pricing
---------------------------------------------------------------------------------------------------------------------------------
Leverage RATIO LIBOR Applicable Margin ABR Applicable Margin Revolving Commitment Fee
(Funded (BPS) (BPS) (BPS)
Debt/Capital-ization Value)
--------------------------------------------------------------------------------------------------------------------------------
Greater than or
equal to 45% 225 100 50
--------------------------------------------------------------------------------------------------------------------------------
Greater than or
equal to 40% but 200 75 37.5
less than 45%
--------------------------------------------------------------------------------------------------------------------------------
Greater than or
equal to 35% but 175 50 30
less than 40%
-------------------------------------------------------------------------------------------------------------------------------
Less than 35% 150 25 25
===============================================================================================================================
On the Closing Date, the LIBOR Margin for the Revolving Facility shall be
225 basis points, the ABR Applicable Margin for the Revolving Facility shall be
100 basis points and the Revolving Commitment Fee shall be 50 basis points. All
Applicable Margins and the Revolving Commitment Fee for the Revolving Facility
shall remain at their Closing Date level through September 30, 1999. For
purposes of this Exhibit A, Leverage Ratio for the Revolving Facility shall take
effect with respect to all outstanding Advances on the date of delivery of the
Borrower's statement under Section 7.1 certifying such change in Borrower's
Leverage Ratio.
EXHIBIT B
---------
REVOLVING NOTE
--------------
$ July , 1999
---------------- -----
National Golf Operating Partnership, L.P., a Delaware limited partnership
(the "Borrower"), promises to pay to the order of
----------------------------
(the "Lender") the lesser of the principal sum of
----------------------------
Dollars or the aggregate unpaid principal amount of all Revolving Loans made by
the Lender to the Borrower pursuant to Article II of the Amended and Restated
Credit Agreement hereinafter referred to, in immediately available funds at the
main office of The First National Bank of Chicago in Chicago, Illinois, as
Administrative Agent, together with interest on the unpaid principal amount
hereof at the rates and on the dates set forth in the Agreement. The Borrower
shall pay the remaining unpaid principal of and accrued and unpaid interest on
the Loans in full on the Revolving Facility Termination Date.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Loan and the date and amount of each principal
payment hereunder.
This Revolving Note is one of the Notes issued pursuant to, and is
entitled to the benefits of, the Amended and Restated Credit Agreement (as the
same may be amended or modified, the "Agreement"), dated as of July __, 1999
among the Borrower, National Golf Properties, Inc., as Guarantor and General
Partner, The First National Bank of Chicago, individually and as the
Administrative Agent, Xxxxxxx Xxxxx Capital Corporation, individually and as the
Syndication Agent, First Chicago Capital Markets, Inc. and Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated, as Joint Lead Arrangers, ING (U.S.) Capital
LLC, individually and as Co-Documentation Agent and Co-Arranger, Union Bank of
California N.A., individually and as Co-Documentation Agent, and the other
Lenders named therein, to which Agreement reference is hereby made for a
statement of the terms and conditions governing this Revolving Note, including
the terms and conditions under which this Revolving Note may be prepaid or its
maturity date accelerated. Capitalized terms used herein and not otherwise
defined herein are used with the meanings attributed to them in the Agreement.
If there is a Default or Unmatured Default under the Agreement or any
other Loan Document and Administrative Agent exercises the remedies provided
under the Agreement and/or any of the Loan Documents for the Lenders, then in
addition to all amounts recoverable by the Administrative Agent and the Lenders
under such documents, the Administrative Agent and the Lenders shall be entitled
to receive reasonable attorneys fees and expenses incurred by Administrative
Agent and the Lenders in connection with the exercise of such remedies.
Borrower and all endorsers severally waive presentment, protest and
demand, notice of protest, demand and of dishonor and nonpayment of this
Revolving Note, and any and all lack of diligence or delays in collection or
enforcement of this Revolving Note, and expressly agree that this Note, or any
payment hereunder, may be extended from time to time, and expressly consent to
the release of any party liable for the obligation secured by this Revolving
Note, the release of any of the security for this Revolving Note, the acceptance
of any other security therefor, or any other indulgence or forbearance
whatsoever, all without notice to any party and without affecting the liability
of the Borrower and any endorsers hereof.
This Revolving Note shall be governed and construed under the internal
laws of the State of Illinois.
BORROWER AND LENDER, BY ITS ACCEPTANCE HEREOF, EACH HEREBY WAIVE ANY RIGHT
TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHT
UNDER THIS PROMISSORY NOTE OR ANY OTHER LOAN DOCUMENT OR RELATING THERETO OR
ARISING FROM THE LENDING RELATIONSHIP WHICH IS THE SUBJECT OF THIS PROMISSORY
NOTE AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A JUDGE
AND NOT BEFORE A JURY.
NATIONAL GOLF OPERATING PARTNERSHIP,
L.P.
By: NATIONAL GOLF PROPERTIES, INC., its
General Partner
By:
------------------------------
Print Name:
----------------------
Title:
---------------------------
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
NOTE OF NATIONAL GOLF OPERATING PARTNERSHIP, L.P.
DATED JULY ______, 1999
================================================================================================================
Date Principal Maturity Maturity Unpaid
---- Amount of Interest Principal Balance
of Loan Period Amount Paid -------
------- ------ -----------
----------------------------------------------------------------------------------------------------------------
================================================================================================================
EXHIBIT C
---------
TERM NOTE
---------
$ July , 1999
---------------- -----
National Golf Operating Partnership, L.P., a Delaware limited partnership
(the "Borrower"), promises to pay to the order of
-------------------------------
(the "Lender") the principal sum of Dollars, in immediately
-------------------
available funds at the main office of The First National Bank of Chicago in
Chicago, Illinois, as Administrative Agent, together with interest on the unpaid
principal amount hereof at the rates and on the dates set forth in the
Agreement. The Borrower shall pay the remaining unpaid principal of and accrued
and unpaid interest on the Loans in full on the Term Facility Termination Date.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Loan and the date and amount of each principal
payment hereunder.
This Term Note is one of the Notes issued pursuant to, and is entitled to
the benefits of, the Amended and Restated Credit Agreement (as the same may be
amended or modified, the "Agreement"), dated as of July __, 1999 among the
Borrower, National Golf Properties, Inc., as Guarantor and General Partner, The
First National Bank of Chicago, individually and as the Administrative Agent,
Xxxxxxx Xxxxx Capital Corporation, individually and as the Syndication Agent,
First Chicago Capital Markets, Inc. and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, as Joint Lead Arrangers, ING (U.S.) Capital LLC, individually and
as Co-Documentation Agent and Co-Arranger, Union Bank of California N.A.,
individually and as Co-Documentation Agent, and the other Lenders named therein,
to which Agreement reference is hereby made for a statement of the terms and
conditions governing this Term Note, including the terms and conditions under
which this Term Note may be prepaid or its maturity date accelerated.
Capitalized terms used herein and not otherwise defined herein are used with the
meanings attributed to them in the Agreement.
If there is a Default or Unmatured Default under the Agreement or any
other Loan Document and Administrative Agent exercises the remedies provided
under the Agreement and/or any of the Loan Documents for the Lenders, then in
addition to all amounts recoverable by the Administrative Agent and the Lenders
under such documents, the Administrative Agent and the Lenders shall be entitled
to receive reasonable attorneys fees and expenses incurred by Administrative
Agent and the Lenders in connection with the exercise of such remedies.
Borrower and all endorsers severally waive presentment, protest and
demand, notice of protest, demand and of dishonor and nonpayment of this Term
Note, and any and all lack of diligence or delays in collection or enforcement
of this Term Note, and expressly agree that this Note, or any payment hereunder,
may be extended from time to time, and expressly consent to the release of any
party liable for the obligation secured by this Term Note, the release of any of
the security for this Term Note, the acceptance of any other security therefor,
or any other indulgence or forbearance whatsoever, all without notice to any
party and without affecting the liability of the Borrower and any endorsers
hereof.
This Term Note shall be governed and construed under the internal laws of
the State of Illinois.
BORROWER AND LENDER, BY ITS ACCEPTANCE HEREOF, EACH HEREBY WAIVE ANY RIGHT
TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHT
UNDER THIS PROMISSORY NOTE OR ANY OTHER LOAN DOCUMENT OR RELATING THERETO OR
ARISING FROM THE LENDING RELATIONSHIP WHICH IS THE SUBJECT OF THIS PROMISSORY
NOTE AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A JUDGE
AND NOT BEFORE A JURY.
NATIONAL GOLF OPERATING PARTNERSHIP,
L.P.
By: NATIONAL GOLF PROPERTIES, INC., its
General Partner
By:
---------------------------
Print Name:
---------------------
Title:
---------------------------
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
NOTE OF NATIONAL GOLF OPERATING PARTNERSHIP, L.P.
DATED JULY ______, 1999
================================================================================================================
Date Principal Maturity Maturity Unpaid
---- Amount of Interest Principal Balance
of Loan Period Amount Paid -------
------- ----------- -----------
----------------------------------------------------------------------------------------------------------------
================================================================================================================
