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EXHIBIT 10.35
LOAN AGREEMENT
BETWEEN
CCP/SHURGARD VENTURE, LLC
AS BORROWER
THE LENDERS PARTY HERETO
AS LENDERS
AND
GENERAL ELECTRIC CAPITAL CORPORATION,
AS ADMINISTRATIVE AGENT
DECEMBER 28, 2000
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TABLE OF CONTENTS
Page No.
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ARTICLE 1 CERTAIN DEFINITIONS ...................................................................................1
Section 1.1 Certain Definitions.........................................................................1
Section 1.2 Types of Loans.............................................................................16
ARTICLE 2 LOAN TERMS ...........................................................................................16
Section 2.1 The Loan...................................................................................16
Section 2.2 Interest Rate; Late Charge.................................................................17
Section 2.3 Terms of Payment...........................................................................18
Section 2.4 Security...................................................................................22
Section 2.5 Fees ...................................................................................22
Section 2.6 Payments; Pro Rata Treatment; Etc..........................................................22
Section 2.7 Yield Protection; Etc......................................................................25
ARTICLE 3 INSURANCE, CONDEMNATION, AND IMPOUNDS.................................................................31
Section 3.1 Insurance..................................................................................31
Section 3.2 Use and Application of Insurance Proceeds..................................................33
Section 3.3 Condemnation Awards........................................................................33
Section 3.4 Impounds...................................................................................34
ARTICLE 4 ENVIRONMENTAL MATTERS.................................................................................35
Section 4.1 Certain Definitions........................................................................35
Section 4.2 Representations and Warranties on Environmental Matters....................................35
Section 4.3 Covenants on Environmental Matters.........................................................35
Section 4.4 Allocation of Risks and Indemnity..........................................................36
Section 4.5 No Waiver..................................................................................37
ARTICLE 5 LEASING MATTERS ......................................................................................37
Section 5.1 Representations and Warranties on Leases...................................................37
Section 5.2 Standard Lease Form; Approval Rights.......................................................37
Section 5.3 Covenants..................................................................................38
ARTICLE 6 REPRESENTATIONS AND WARRANTIES........................................................................38
Section 6.1 Organization and Power.....................................................................38
Section 6.2 Validity of Loan Documents.................................................................38
Section 6.3 Liabilities; Litigation....................................................................38
Section 6.4 Taxes and Assessments......................................................................39
Section 6.5 Other Agreements; Defaults.................................................................39
Section 6.6 Compliance with Law........................................................................39
Section 6.7 Location of Borrower.......................................................................40
Section 6.8 ERISA .....................................................................................40
Section 6.9 Margin Stock...............................................................................40
Section 6.10 Tax Filings................................................................................40
Section 6.11 Solvency...................................................................................40
Section 6.12 Full and Accurate Disclosure...............................................................40
Section 6.13 Single Purpose Entity......................................................................40
Section 6.14 Management Agreement.......................................................................40
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Section 6.15 No Conflicts...............................................................................41
Section 6.16 Title .....................................................................................41
Section 6.17 Use of Properties..........................................................................41
Section 6.18 Flood Zone.................................................................................41
Section 6.19 Insurance..................................................................................42
Section 6.20 Certificate of Occupancy; Licenses.........................................................42
Section 6.21 Physical Condition.........................................................................42
Section 6.22 Boundaries.................................................................................42
Section 6.23 Separate Lots..............................................................................42
Section 6.24 Survey ....................................................................................42
Section 6.25 Filing and Recording Taxes.................................................................42
Section 6.26 Investment Company Act.....................................................................43
ARTICLE 7 FINANCIAL REPORTING ..................................................................................43
Section 7.1 Financial Statements.......................................................................43
Section 7.2 Accounting Principles......................................................................44
Section 7.3 Other Information..........................................................................44
Section 7.4 Annual Budget..............................................................................44
Section 7.5 Audits ....................................................................................44
ARTICLE 8 COVENANTS ............................................................................................44
Section 8.1 Due on Sale and Encumbrance; Transfers of Interests........................................44
Section 8.2 Taxes; Charges.............................................................................45
Section 8.3 Control; Management........................................................................45
Section 8.4 Operation; Maintenance; Inspection.........................................................46
Section 8.5 Taxes on Security..........................................................................46
Section 8.6 Legal Existence; Name, Etc.................................................................46
Section 8.7 Affiliate Transactions.....................................................................47
Section 8.8 Limitation on Other Debt...................................................................47
Section 8.9 Further Assurances.........................................................................47
Section 8.10 Estoppel Certificates......................................................................47
Section 8.11 Notice of Certain Events...................................................................47
Section 8.12 Indemnification............................................................................48
Section 8.13 Payment For Labor and Materials............................................................48
Section 8.14 Alterations................................................................................48
Section 8.15 Handicapped Access.........................................................................48
Section 8.16 Hedge Instrument...........................................................................49
ARTICLE 9 EVENTS OF DEFAULT ....................................................................................49
Section 9.1 Payments...................................................................................49
Section 9.2 Insurance..................................................................................50
Section 9.3 Single Purpose Entity......................................................................50
Section 9.4 Taxes .....................................................................................50
Section 9.5 Sale, Encumbrance, Etc.....................................................................50
Section 9.6 Representations and Warranties.............................................................50
Section 9.7 Other Encumbrances.........................................................................50
Section 9.8 Involuntary Bankruptcy or Other Proceeding.................................................50
Section 9.9 Voluntary Petitions, etc...................................................................50
Section 9.10 Covenants..................................................................................50
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ARTICLE 10 REMEDIES ............................................................................................51
Section 10.1 Remedies - Insolvency Events...............................................................51
Section 10.2 Remedies - Other Events....................................................................51
Section 10.3 Lender's Right to Perform the Obligations..................................................51
ARTICLE 11 MISCELLANEOUS .......................................................................................52
Section 11.1 Notices ...................................................................................52
Section 11.2 Amendments, Waivers, Etc...................................................................53
Section 11.3 Limitation on Interest.....................................................................54
Section 11.4 Invalid Provisions.........................................................................55
Section 11.5 Reimbursement of Expenses..................................................................55
Section 11.6 Approvals; Third Parties; Conditions.......................................................55
Section 11.7 Lenders and Administrative Agent Not in Control; No Partnership............................56
Section 11.8 Time of the Essence........................................................................56
Section 11.9 Successors and Assigns; Secondary Market Transactions......................................56
Section 11.10 Renewal, Extension or Rearrangement........................................................57
Section 11.11 Waivers....................................................................................57
Section 11.12 Cumulative Rights..........................................................................58
Section 11.13 Singular and Plural........................................................................58
Section 11.14 Phrases....................................................................................58
Section 11.15 Exhibits and Schedules.....................................................................58
Section 11.16 Titles of Articles, Sections and Subsections...............................................58
Section 11.17 Promotional Material.......................................................................58
Section 11.18 Survival...................................................................................59
Section 11.19 Waiver of Jury Trial.......................................................................59
Section 11.20 Waiver of Punitive or Consequential Damages................................................59
Section 11.21 Governing Law..............................................................................59
Section 11.22 Entire Agreement...........................................................................61
Section 11.23 Counterparts...............................................................................61
Section 11.24 Assignments and Participations.............................................................61
Section 11.25 Brokers....................................................................................63
ARTICLE 12 LIMITATIONS ON LIABILITY.............................................................................64
Section 12.1 Limitation on Liability....................................................................64
Section 12.2 Limitation on Liability of Lender's Officers, Employees, etc...............................65
ARTICLE 13 ADMINISTRATIVE AGENT.................................................................................65
Section 13.1 Appointment, Powers and Immunities.........................................................65
Section 13.2 Reliance by Administrative Agent...........................................................66
Section 13.3 Defaults...................................................................................66
Section 13.4 .Rights as a Lender........................................................................66
Section 13.5 Standard of Care; Indemnification..........................................................66
Section 13.6 Non-Reliance on Administrative Agent and Other Lenders.....................................67
Section 13.7 Failure to Act.............................................................................67
Section 13.8 Resignation of Administrative Agent........................................................68
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LIST OF DEFINED TERMS
Page No.
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ADDITIONAL COSTS.................................................................................................1
ADJUSTED LIBOR RATE..............................................................................................1
ADMINISTRATIVE AGENT.............................................................................................1
ADVANCE DATE.....................................................................................................1
AFFILIATE........................................................................................................1
AGREEMENT........................................................................................................1
ALLOCATED LOAN AMOUNT............................................................................................1
ALTERNATE BASE RATE..............................................................................................1
ALTERNATE BASE RATE LOANS........................................................................................2
APPLICABLE LENDING OFFICE........................................................................................2
APPRAISAL........................................................................................................2
ASSIGNMENT AND ACCEPTANCE........................................................................................2
ASSIGNMENT OF RENTS AND LEASES...................................................................................2
BASLE ACCORD.....................................................................................................2
BORROWER.........................................................................................................1
BORROWER PARTY...................................................................................................2
BORROWER'S KNOWLEDGE.............................................................................................2
BORROWER'S LIMITED LIABILITY COMPANY AGREEMENT...................................................................2
BUDGET...........................................................................................................3
BUSINESS DAY.....................................................................................................3
CALCULATED NOI ADJUSTMENTS.......................................................................................3
CASH ON CASH RETURN..............................................................................................3
COMMITMENT.......................................................................................................3
COMMITMENT LETTER................................................................................................4
CONSTRUCTION EXPENSE AUDIT.......................................................................................4
CONTRACT RATE....................................................................................................4
CONVERT, CONVERSION AND CONVERTED................................................................................4
COUNTERPARTY.....................................................................................................4
DEBT.............................................................................................................4
DEBT SERVICE.....................................................................................................4
DEBT SERVICE COVERAGE............................................................................................5
DEBT SERVICE SHORTFALL...........................................................................................5
DEFAULT RATE.....................................................................................................5
DEVELOPMENT FEE..................................................................................................5
DOLLARS AND $....................................................................................................5
ENVIRONMENTAL LAWS...........................................................................................5, 34
EURODOLLAR LOANS.................................................................................................5
EVENT OF DEFAULT.................................................................................................5
FEDERAL FUNDS RATE...............................................................................................5
GECC.............................................................................................................5
GECC-APPROVED ACQUISITION COSTS..................................................................................6
GECC-APPROVED CLOSING COSTS......................................................................................6
GECC-PROPERTY NET OPERATING INCOME...............................................................................6
GUARANTORS.......................................................................................................6
GUARANTY.........................................................................................................6
HAZARDOUS MATERIALS..........................................................................................6, 35
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HEDGE INSTRUMENT.................................................................................................6
IMPROVEMENTS.....................................................................................................6
INDEBTEDNESS.....................................................................................................6
INITIAL ADVANCE AMOUNT...........................................................................................6
INTEREST BUDGET..................................................................................................6
INTEREST BUDGET RESERVE..........................................................................................6
INTEREST PERIOD..................................................................................................6
JOINDER.........................................................................................................71
JOINDER PARTIES.................................................................................................71
JOINDER PARTY....................................................................................................7
LENDER...........................................................................................................1
LENDERS..........................................................................................................1
LIBOR BASE RATE..................................................................................................7
LICENSES.....................................................................................................7, 41
LIEN.............................................................................................................7
LOAN.............................................................................................................7
LOAN DOCUMENTS...................................................................................................7
LOAN YEAR........................................................................................................8
MAJORITY LENDERS.................................................................................................8
MATERIAL ADVERSE EFFECT..........................................................................................8
MATURITY DATE....................................................................................................8
MORTGAGE.........................................................................................................8
NET CASH FLOW....................................................................................................8
NET OPERATING INCOME.............................................................................................8
NOTES............................................................................................................8
OPERATING EXPENSES...............................................................................................8
OPERATING REVENUES...............................................................................................9
PARTICIPANT......................................................................................................9
PAYMENT DATE.....................................................................................................9
PAYOR............................................................................................................9
PERMITTED ENCUMBRANCES...........................................................................................9
PERSON...........................................................................................................9
PORTFOLIO.......................................................................................................10
POTENTIAL DEFAULT................................................................................................9
PRIME RATE......................................................................................................10
PROPERTY........................................................................................................10
PROPERTY MANAGER................................................................................................10
PROPOSED LENDER.................................................................................................10
REGULATION D....................................................................................................10
REGULATORY CHANGE...............................................................................................10
RELEASE PRICE...................................................................................................10
REQUESTING LENDER...............................................................................................11
REQUIRED PAYMENT................................................................................................11
RESERVE REQUIREMENT.............................................................................................11
SECONDARY MARKET TRANSACTION....................................................................................11
SHURGARD........................................................................................................11
SINGLE PURPOSE ENTITY...........................................................................................11
SITE ASSESSMENT.................................................................................................14
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SPREAD..........................................................................................................14
SPREAD REDUCTION REQUIREMENTS...................................................................................14
STANDARD NOI ADJUSTMENTS........................................................................................15
STATE...........................................................................................................15
STUB INTEREST PERIOD............................................................................................15
TAX AND INSURANCE ESCROW RESERVE................................................................................15
TAXES...........................................................................................................15
THIRD PARTY REPORTS.............................................................................................15
THRESHOLD AMOUNT................................................................................................15
TYPE............................................................................................................15
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LIST OF EXHIBITS AND SCHEDULES
Exhibit A - Legal Description of Property
Exhibit B - Budget
Exhibit C - Promissory Note
Schedule of Loans
Exhibit D - Assignment and Acceptance
Schedule 1.1(f) - Allocated Loan Amount
Schedule 1.1(mm) - GECC-Approved Acquisition Costs
Schedule 1.1(nn) - GECC-Approved Closing Costs
Schedule 2.1 - Advance Conditions
Schedule 2.4 - Interest Budget Reserve
Schedule 6.3 Liabilities; Litigation; Claims
Schedule 6.21 Property Conditions
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LOAN AGREEMENT
This Loan Agreement (this "AGREEMENT") is entered into as of December
28, 2000, among CCP/SHURGARD VENTURE, LLC, a Delaware limited liability company
("BORROWER"); each of the lenders that is a signatory hereto identified under
the caption "LENDERS" on the signature pages hereof and each lender that becomes
a "Lender" after the date hereof pursuant to Section 11.24(b) (individually, a
"LENDER" and, collectively, the "LENDERS"); and GENERAL ELECTRIC CAPITAL
CORPORATION, a New York corporation, as administrative agent for the Lenders (in
such capacity, together with its successors in such capacity, the
"ADMINISTRATIVE AGENT").
ARTICLE 1
CERTAIN DEFINITIONS
SECTION 1.1 CERTAIN DEFINITIONS. As used herein, the following terms
have the meanings indicated:
(a) "ADDITIONAL COSTS" has the meaning assigned in Section
2.7(a)(i).
(b) "ADJUSTED LIBOR RATE" means, for any Interest Period for any
Eurodollar Loan, a rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) determined by Administrative Agent to be equal to
the Libor Base Rate for such Interest Period divided by 1 minus the
Reserve Requirement (if any) for such Interest Period.
(c) "ADVANCE DATE" has the meaning assigned in Section 2.6(c).
(d) "AFFILIATE" means (1) any corporation in which Borrower or
any partner, shareholder, director, officer, member, or manager of
Borrower directly or indirectly owns or controls more than ten percent
(10%) of the beneficial interest, (2) any partnership, joint venture or
limited liability company in which Borrower or any partner, shareholder,
director, officer, member, or manager of Borrower is a partner, joint
venturer or member, (3) any trust in which Borrower or any partner,
shareholder, director, officer, member or manager of Borrower is a
trustee or beneficiary, (4) any entity of any type which is directly or
indirectly owned or controlled by Borrower or any partner, shareholder,
director, officer, member or manager of Borrower, (5) any partner,
shareholder, director, officer, member, manager or employee of Borrower,
(6) any Person related by birth, adoption or marriage to any partner,
shareholder, director, officer, member, manager, or employee of
Borrower, or (7) any Borrower Party.
(e) "AGREEMENT" means this Loan Agreement, as amended from time
to time.
(f) "ALLOCATED LOAN AMOUNT" means, for each Property, the amount
of the Loan allocated to such Property by GECC and set forth on Schedule
1.1(f); provided, however, that if there is not then any uncured Event
of Default or Potential Default the amounts shown on Schedule 1.1(f)
shall be reduced, pro rata based on the relative amounts shown on
Schedule 1.1(f) for each Property, by any unfunded and unavailable Loan
amount
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(which shall not include any un-funded portion of the Interest Budget),
if any, remaining after the last Additional Advance has been made
pursuant to Schedule 2.1 hereof.
(g) "ALTERNATE BASE RATE" means, (x) for any day that the Spread
Reduction Requirements have not been met, a rate per annum equal to the
Prime Rate in effect for such day, or (y) for any day that the Spread
Reduction Requirements have been met, a rate per annum equal to the
Prime Rate in effect for such day minus twenty-five (25) basis points.
(h) "ALTERNATE BASE RATE LOANS" means Loans that bear interest
at rates based upon the Alternate Base Rate.
(i) "APPLICABLE LENDING OFFICE" means, for each Lender and for
each Type of Loan, the "Lending Office" of such Lender (or of an
affiliate of such Lender) designated for such Type of Loan on the
respective signature pages hereof or such other office of such Lender
(or of an affiliate of such Lender) as such Lender may from time to time
specify to Administrative Agent and Borrower as the office by which its
Loans of such Type are to be made and maintained.
(j) "APPRAISAL" means an appraisal of a Property or Properties,
as the case may be, prepared by an MAI appraiser satisfactory to
Administrative Agent, which appraisal must also (a) satisfy the
requirements of Title XI of the Federal Institution Reform, Recovery and
Enforcement Act of 1989 and the regulations promulgated thereunder
(including the appraiser with respect thereto) and (b) be otherwise in
form and substance satisfactory to Administrative Agent.
(k) "ASSIGNMENT AND ACCEPTANCE" means an Assignment and
Acceptance, duly executed by the parties thereto, in substantially the
form of Exhibit D hereto and consented to by Administrative Agent in
accordance with Section 11.24(b).
(l) "ASSIGNMENT OF RENTS AND LEASES" means each of the
Assignments of Rents and Leases, executed by Borrower for the benefit of
Administrative Agent (on behalf of the Lenders), and pertaining to
leases of space in the Properties, as the same may be modified or
amended from time to time.
(m) "BASLE ACCORD" means the proposals for risk-based capital
framework described by the Basle Committee on Banking Regulations and
Supervisory Practices in its paper entitled "International Convergence
of Capital Measurement and Capital Standards" dated July 1988, as
amended, modified and supplemented and in effect from time to time or
any replacement thereof.
(n) "BORROWER PARTY" means any Joinder Party, any Guarantor, any
general partner or managing member in Borrower, and any general partner
in any partnership or any managing member in a limited liability company
that is a general partner or managing member in Borrower, at any level.
(o) "BORROWER'S KNOWLEDGE" means the actual knowledge of any one
or more of Shurgard, Shurgard Storage Centers, Inc., or Chase, and for
purposes of this definition
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the knowledge of Chase shall be limited to the knowledge of Xxxxxxx X.
Xxxxxxxx and Xxxxx Xxxxxxx.
(p) "BORROWER'S LIMITED LIABILITY COMPANY AGREEMENT" means that
certain Amended and Restated Limited Liability Company Agreement of
CCP/Shurgard Venture, LLC dated as of December 26, 2000 by Shurgard
Development IV, Inc., a Washington corporation, and CCPRE-Storage, LLC,
a Delaware limited liability company.
(q) "BUDGET" means the budget attached as Exhibit B showing
total costs relating to the subject transaction, use of the initial
advance of the Loans, and amounts allocated for future advances (if
any).
(r) "BUSINESS DAY" means (a) any day other than a Saturday, a
Sunday, or other day on which commercial banks located in the New York
City are authorized or required by law to remain closed and (b) in
connection with a borrowing of, a payment or prepayment of principal of
or interest on, a Conversion of or into, or an Interest Period for, a
Eurodollar Loan or a notice by Borrower with respect to any such
borrowing, payment, prepayment or Conversion, the term "Business Day"
shall also exclude a day on which banks are not open for dealings in
Dollar deposits in the London interbank market.
(s) "CALCULATED NOI ADJUSTMENTS" means, when calculating Net
Operating Income, adjustments thereto made by GECC as follows:
(i) The occupancy rate used for each Property in the
calculation shall be the lesser of (x) the actual occupancy
rate, or (y) eighty-five percent (85%); and
(ii) GECC may, in GECC's reasonable discretion, adjust
Net Operating Income to account for seasonal income usage trends
in the self-storage industry as they specifically relate to each
Property; provided, however, that
(A) GECC will not adjust Net Operating Income for such
seasonal income and usage trends by more than (w) plus two
percent (2%) during any first calendar quarter, (x) minus one
percent (1%) during any second calendar quarter, (y) minus two
percent (2%) during any calendar third quarter, and (z) plus one
percent (1%) during any calendar fourth quarter; and
(B) Each time GECC elects to adjust Net Operating Income
under clause (i) above, GECC shall adjust Net Operating Income
for a whole calendar year after the election is made, it being
the intent of GECC and Borrower to use such adjustments for a
whole year in order to account for all seasonal variations so
that both positive and negative adjustments are taken into
consideration, even though such adjustments are calculated on a
quarterly basis.
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(t) "CASH ON CASH RETURN" means the ratio, expressed as a
percentage, of (1) annualized Net Operating Income or GECC-Projected Net
Operating Income, as applicable, to (2) the outstanding principal
balance of the Loans.
(u) "COMMITMENT" means, as to each Lender, the obligation of
such Lender to make a Loan in a principal amount up to but not exceeding
the amount set opposite the name of such Lender on Schedule 1 under the
caption "Commitment" or, in the case of a Person that becomes a Lender
pursuant to an assignment permitted under Section 11.24(b), as specified
in the respective instrument of assignment pursuant to which such
assignment is effected. The original aggregate principal amount of the
Commitments is $67,700,000.00.
(v) "COMMITMENT LETTER" means the commitment letter, dated
November 14, issued by GECC and accepted by Borrower on November 15,
2000.
(w) "CONVERT", "CONVERSION" and "CONVERTED" refer to a
conversion pursuant to the terms of this Agreement of one Type of Loans
into another Type of Loans, which may be accompanied by the transfer by
a Lender (at its sole discretion) of a Loan from one Applicable Lending
Office to another.
(x) "CONTRACT RATE" has the meaning assigned in ARTICLE 1.
(y) "CONSTRUCTION EXPENSE AUDIT" means a construction expense
audit with respect to a Property performed by or on behalf of
Administrative Agent, and approved by Administrative Agent, with respect
to each Property and which generally will include the following
procedures: (i) review an itemization of actual Property costs incurred;
(ii) review general contractor's contract, developer's contract, and
select subcontractor's contract as determined by Administrative Agent;
(iii) review the final applications for payment and fees under the
respective contracts and verify total payment amounts; (iv) review
general and temporary condition costs on the final applications for
payment; and (v) select a sample of Property positions as determined by
Administrative Agent and confirm the employee position per the final
application for payment or cost to the Property cost report to the
appropriate contract.
(z) "COUNTERPARTY" has the meaning provided to it in Section
8.16.
(aa) "DEBT" means, for any Person, without duplication: (1) all
indebtedness of such Person for borrowed money, for amounts drawn under
a letter of credit, or for the deferred purchase price of property for
which such Person or its assets is liable, (2) all unfunded amounts
under a loan agreement, letter of credit, or other credit facility for
which such Person would be liable, if such amounts were advanced under
the credit facility, (3) all amounts required to be paid by such Person
as a guaranteed payment to partners, members (or other equity holders)
or a preferred or special dividend, including any mandatory redemption
of shares or interests, (4) all indebtedness guaranteed by such Person,
directly or indirectly, (5) all obligations under leases that constitute
capital leases for which such Person is liable, and (6) all obligations
of such Person under interest rate swaps, caps, floors, collars and
other interest hedge agreements, in each case whether
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such Person is liable contingently or otherwise, as obligor, guarantor
or otherwise, or in respect of which obligations such Person otherwise
assures a creditor against loss.
(bb) "DEBT SERVICE" means the aggregate interest and other
payments due under the Loans, and on any other outstanding permitted
Debt relating to any Property or the Portfolio approved by
Administrative Agent for the period of time for which calculated, but
excluding payment of Net Cash Flow applied to (1) reduction of
principal, and (2) escrows or reserves required by Administrative Agent.
(cc) "DEBT SERVICE COVERAGE" means, for the period of time for
which calculation is being made, the ratio of (x) GECC-Projected Net
Operating Income or Net Operating Income, as the case may be, to (y)
Debt Service. The Debt Service Coverage Ratio shall be as determined by
Administrative Agent based upon the most recent reports required to have
been submitted by Borrower under Section 7.1 (or, if no such reports
have been so submitted, such other information as Administrative Agent
shall determine in its sole discretion), which determination shall be
conclusive in the absence of manifest error.
(dd) "DEBT SERVICE SHORTFALL" means, for a month, an amount
equal to the positive difference, if any, of (x) the Debt Service due
and payable with respect to the Loans for such month, less (y) the sum
of (i) Net Operating Income for such month, and (ii) Organizational
Expenses for such month.
(ee) "DEFAULT RATE" means the lesser of (a) the maximum rate of
interest allowed by applicable law, and (b) five percent (5%) per annum
in excess of (i) with respect to Alternate Base Rate Loans, the
Alternate Base Rate as in effect from time to time or (ii) with respect
to Eurodollar Loans, the respective Contract Rate for such Eurodollar
Loan.
(ff) "DEVELOPMENT FEE" means a development fee payable to
Shurgard with respect to each Property in an amount equal to five
percent (5%) of the costs of the land that is a part of the Property,
and all other hard and soft costs and contingency costs related to the
development of such Property as set forth on the Budget but only up to
the amount actually incurred.
(gg) "DOLLARS" and "$" means lawful money of the United States
of America.
(hh) "ENVIRONMENTAL LAWS" has the meaning assigned in ARTICLE 4.
(ii) "EURODOLLAR LOANS" means Loans that bear interest at rates
based on rates referred to in the definition of "Libor Base Rate".
(jj) "EVENT OF DEFAULT" has the meaning assigned in ARTICLE 9.
(kk) "FEDERAL FUNDS RATE" means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) 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 by the Federal
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Reserve Bank of New York on the Business Day next succeeding such day,
provided that (a) if the day for which such rate is to be determined is
not a Business Day, the Federal Funds Rate for such day shall be such
rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day and (b) if such rate is
not so published for any Business Day, the Federal Funds Rate for such
Business Day shall be the average rate charged to Bankers Trust Company
on such Business Day on such transactions as determined by
Administrative Agent, or such other commercial bank as selected by
Administrative Agent.
(ll) "GECC" means General Electric Capital Corporation.
(mm) "GECC-APPROVED ACQUISITION COSTS" means the costs of
acquiring the land that included in each Property and the costs related
to the substantial completion of the improvements to the Property, which
shall include, without limitation, the Development Fee, and verified by
a Construction Expense Audit, including, without limitation, those set
forth in Schedule 1.1(mm).
(nn) "GECC-APPROVED CLOSING COSTS" means the actual costs and
expenses incurred and paid by Borrower in connection with the closing of
the Loan and the acquisition of the Portfolio, to the extent the same
are approved by Administrative Agent, including, without limitation,
those costs set forth in Schedule 1.1(nn).
(oo) "GECC-PROJECTED NET OPERATING INCOME" means GECC's estimate
of the Net Operating Income to be generated by each Property upon such
Property's achieving a maximum of 80% occupancy and taking into account
and subject to the Standard NOI Adjustments.
(pp) "GUARANTORS" means the Persons, if any, executing a
Guaranty.
(qq) "GUARANTY" means the instruments of guaranty, if any, now
or hereafter in effect from a Guarantor to Administrative Agent (on
behalf of the Lenders).
(rr) "HAZARDOUS MATERIALS" has the meaning assigned in ARTICLE
4.
(ss) "HEDGE INSTRUMENT" shall have the meaning given to is in
Section 8.16.
(tt) "IMPROVEMENTS" has the meaning assigned to it in the
Mortgage.
(uu) "INDEBTEDNESS" has the meaning assigned to it in the
Mortgage.
(vv) "INITIAL ADVANCE AMOUNT" means an amount that, when funded,
generates not less than (i) a 15% Cash on Cash Return based upon the
GECC-Projected Net Operating Income, and (ii) a 1.50:1.0 Debt Service
Coverage based on GECC-Projected Net Operating Income.
(ww) "INTEREST BUDGET" means an amount equal to Administrative
Agent's estimate of the negative difference between (x) the
GECC-Projected Net Operating Income, less (y) the Debt Service due under
the Loan for the Term of the Loan.
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(xx) "INTEREST BUDGET RESERVE" means the interest reserve set
forth in Schedule 2.4.
(yy) "INTEREST PERIOD" means, for any Eurodollar Loan, each
period commencing on the date such Eurodollar Loan is made or Converted
from a Loan of another Type or (in the event of a Continuation) the last
day of the next preceding Interest Period for such Loan, and ending on
the first Business Day of the next calendar month; provided that, if any
Interest Period would otherwise end after the Maturity Date, such Loan
shall not be Continued as, or Converted into, a Eurodollar Loan and
shall bear interest at the Alternate Base Rate. In no event may Borrower
have more than one Interest Period in respect of Eurodollar Loans from
all Lenders outstanding at any one time and to the extent any Loan does
not qualify for such Interest Period, such loan shall bear interest at
the Alternative Base Rate. The first Interest Period shall be the Stub
Interest Period.
(zz) "JOINDER PARTY" means the Persons, if any, executing the
Joinder hereto.
(aaa) "LIBOR BASE RATE" means, for any Interest Period for any
Eurodollar Loan, the rate per annum appearing on Page 3750 of the Dow
Xxxxx Markets (Telerate) Service (or on any successor or substitute page
of such Service, or any successor to or substitute for such Service,
providing rate quotations comparable to those currently provided on such
page of such Service, as determined by Administrative Agent from time to
time for purposes of providing quotations of interest rates applicable
to Dollar deposits in the London interbank market) at approximately
11:00 A.M. London time on the date two Business Days prior to the first
day of such Interest Period as the rate for the offering of Dollar
deposits having a term comparable to such Interest Period, provided that
if such rate does not appear on such page, or if such page shall cease
to be publicly available, or if the information contained on such page,
in the reasonable judgment of Administrative Agent shall cease
accurately to reflect the rate offered by leading banks in the London
interbank market as reported by any publicly available source of similar
market data selected by Administrative Agent, the Libor Base Rate for
such Interest Period shall be determined from such substitute financial
reporting service as Administrative Agent in its discretion shall
determine.
(bbb) "LICENSES" has the meaning assigned in Section 6.20.
(ccc) "LIEN" means any interest or, with respect to Georgia
Property, any claim thereof, in any Property securing an obligation owed
to, or a claim by, any Person other than the owner of such Property,
whether such interest is based on common law, statute or contract,
including the lien or security interest arising from a deed of trust,
mortgage, assignment, encumbrance, pledge, security agreement,
conditional sale or trust receipt or a lease, consignment or bailment
for security purposes. The term "Lien" shall include reservations,
exceptions, encroachments, easements, rights of way, covenants,
conditions, restrictions, leases and other title exceptions and
encumbrances affecting such Property.
(ddd) "LOAN" means the loans to be made by Lenders to Borrower
under this Agreement and all other amounts evidenced or secured by the
Loan Documents.
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(eee) "LOAN DOCUMENTS" means: (1) this Agreement, (2) the Notes,
(3) the Guaranty, (4) any letter of credit provided to Administrative
Agent in connection with the Loan, (5) the Mortgage, (6) the Assignment
of Rents and Leases, (7) Uniform Commercial Code financing statements,
(8) such assignments of management agreements, contracts and other
rights as may be required under the Commitment or otherwise requested by
Administrative Agent, (9) all other documents evidencing, securing,
governing or otherwise pertaining to the Loans, and (10) all amendments,
modifications, renewals, substitutions and replacements of any of the
foregoing.
(fff) "LOAN YEAR" means the period between the date hereof and
December 31, 2001 for the first Loan Year and the period between each
succeeding January 1 and December 31 until the Maturity Date.
(ggg) "MAJORITY LENDERS" means Lenders holding at least 66.7% of
the aggregate outstanding principal amount of the Loans or, if the Loans
shall not have been made, at least 66.7% of the Commitments.
(hhh) "MANAGEMENT AGREEMENT" has the meaning assigned in Section
6.14.
(iii) "MATERIAL ADVERSE EFFECT" means a material adverse effect
on (a) the business, property, financial condition, operation, or income
of the Borrower, (b) the ability of the Borrower to perform or adhere to
its obligations under this Agreement or any Loan Document, or (c) the
Property or any portion thereof.
(jjj) "MATURITY DATE" means the earlier of (1) subject to
extension under Section 2.3(c), December 31, 2003 or (2) any earlier
date on which the Loans are required to be paid in full, by acceleration
or otherwise, under this Agreement or any of the other Loan Documents.
(kkk) "MORTGAGE" means, collectively, any and all of the
following: Mortgage, Security Agreement and Fixture Filing, the Deed of
Trust, Security Agreement and Fixture Filing, or the Deed to Secure
Debt, Security Agreement and Fixture Filing, that are executed by
Borrower in favor of Administrative Agent (on behalf of the Lenders),
encumbering the Portfolio as security for the Loan, and any amendments,
modifications, renewals, substitutions, consolidations, severances and
replacements thereof.
(lll) "NET CASH FLOW" means, for any period, the amount by which
Operating Revenues exceed the sum of (1) Operating Expenses, (2) Debt
Service and (3) any actual payment into impounds, escrows, or reserves
required by Administrative Agent, except to the extent included within
the definition of Operating Expenses.
(mmm) "NET OPERATING INCOME" means the amount by which Operating
Revenues exceed Operating Expenses, and taking into account and subject
to the Standard NOI Adjustments and Calculated NOI Adjustments.
(nnn) "NOTES" means the promissory notes of even date herewith
as provided for in Section 2.1(d) in the aggregate stated principal
amount of $67,700,000.00, and all promissory notes delivered in
substitution or exchange therefor, in each case as the same
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may be consolidated, replaced, severed, modified, amended or extended
from time to time.
(ooo) "OPERATING EXPENSES" means, for each Property or the
Portfolio, as the case may be, all reasonable and necessary expenses of
operating the Property or the Portfolio, as the case may be, in the
ordinary course of business which are paid in cash by Borrower and which
are directly associated with and fairly allocable to the Property or the
Portfolio, as the case may be, for the applicable period, including ad
valorem real estate taxes and assessments, insurance premiums, regularly
scheduled tax impounds paid to Administrative Agent, maintenance costs,
management fees and costs not to exceed the greater of $2,000 per
Property per month or five percent (5%) of Operating Revenues,
accounting, legal, and other professional fees, and other expenses
incurred by Administrative Agent and reimbursed by Borrower under this
Agreement and the other Loan Documents, deposits to any capital
replacement reserves required by Administrative Agent, wages, salaries,
and personnel expenses, but excluding Debt Service, capital
expenditures, any of the foregoing expenses which are paid from deposits
to cash reserves previously included as Operating Expenses, any payment
or expense for which Borrower was or is to be reimbursed from proceeds
of the Loans or insurance or by any third party, and any non-cash
charges such as depreciation and amortization. Any management fee or
other expense payable to Borrower or to an Affiliate of Borrower other
than the fees and expenses permitted under this Agreement and the other
Loan Documents shall be included as an Operating Expense only with
Administrative Agent's prior approval under the Loan Documents.
Operating Expenses shall not include federal, state or local income
taxes or legal and other professional fees unrelated to the operation of
the Property or the Portfolio, as the case may be.
(ppp) "OPERATING REVENUES" means, with respect to each Property
or the Portfolio, as the case may be, all cash receipts of Borrower from
operation of the Property or the Portfolio, as the case may be, or
otherwise arising in respect of the Property or the Portfolio, as the
case may be, after the date hereof which are properly allocable to the
Property or the Portfolio, as the case may be, for the applicable
period, including receipts from leases and parking agreements,
concession fees and charges and other miscellaneous operating revenues,
proceeds from rental or business interruption insurance, proceeds of any
loans (other than the Loans and any refinancing of the Loans) obtained
by Borrower after the date hereof which are secured by the Property or
the Portfolio, as the case may be, (less only reasonable and customary
expenses incurred in procuring and closing such loan and actually paid
in cash to individuals or entities other than Borrower or any Affiliate
of Borrower and without implying any consent of Administrative Agent or
any Lender to the granting of any security for any such loans),
withdrawals from cash reserves (except to the extent any operating
expenses paid therewith are excluded from Operating Expenses), but
excluding security deposits and xxxxxxx money deposits until they are
forfeited by the depositor, advance rentals until they are earned, and
proceeds from a sale or other disposition.
(qqq) "ORGANIZATIONAL EXPENSES" means all reasonable and
necessary expenses of operating Borrower in the ordinary course of
business which are not directly allocable to or related to the Property,
which are paid in cash by Borrower to third parties and
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which are not included in Operating Expenses. To be included in
Operating Expenses, costs and expenses incurred in the operation of
Borrower must be included in the Budget.
(rrr) "PARTICIPANT" has the meaning assigned in Section
11.24(c).
(sss) "PAYMENT DATE" has the meaning assigned in Section 2.3(a).
(ttt) "PAYOR" has the meaning assigned in Section 2.6(c).
(uuu) "PERMITTED ENCUMBRANCES" has the meaning set forth in the
Mortgage.
(vvv) "PERSON" means any individual, corporation, partnership,
joint venture, association, joint stock company, trust, trustee, estate,
limited liability company, unincorporated organization, real estate
investment trust, government or any agency or political subdivision
thereof, or any other form of entity.
(www) "POTENTIAL DEFAULT" means the occurrence of any event or
condition which, with the giving of notice, the passage of time, or
both, would constitute an Event of Default.
(xxx) "PORTFOLIO" means collectively, all of the Properties then
securing the Loans.
(yyy) "PRIME RATE" means the highest prime rate (or base rate)
reported in the Money Rates column or section of The Wall Street Journal
as the rate in effect for corporate loans at large U.S. money center
commercial banks (whether or not such rate has actually been charged by
any such bank) from time to time. If The Wall Street Journal ceases
publication of the Prime Rate, the "Prime Rate" shall mean the prime
rate (or base rate) announced by Bankers Trust Company, New York, New
York (whether or not such rate has actually been charged by such bank).
If such bank discontinues the practice of announcing the Prime Rate, the
"Prime Rate" shall mean the prime or base rate charged by a large United
States commercial bank selected by Administrative Agent to its most
creditworthy large corporate borrowers.
(zzz) "PROPERTY" means individually each, and "Properties" means
collectively, all, of the twenty-one (21) tracts or parcels of real
property described in Exhibit A, the self storage facilities located on
each parcel, and all related facilities, amenities, fixtures, and
personal property owned by Borrower and any improvements now or
hereafter located therein.
(aaaa) "PROPERTY MANAGER" means the property manager under a
Management Agreement.
(bbbb) "PROPOSED LENDER"" has the meaning assigned in Section
2.7(g).
(cccc) "REGULATION D" means Regulation D of the Board of
Governors of the Federal Reserve System of the United States of America
(or any successor), as the same may be modified and supplemented and in
effect from time to time.
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(dddd) "REGULATORY CHANGE" means, with respect to any Lender,
any change after the date hereof in Federal, state or foreign law or
regulations (including, without limitation, Regulation D) or the
adoption or making after such date of any interpretation, directive or
request applying to a class of banks including such Lender of or under
any Federal, state or foreign law or regulations (whether or not having
the force of law and whether or not failure to comply therewith would be
unlawful) by any court or governmental or monetary authority charged
with the interpretation or administration thereof.
(eeee) "RELEASE PRICE" means the price to be paid by Borrower to
Administrative Agent (on behalf of the Lenders) for the release of a
Property pursuant to Section 2.3(d) and calculated as follows: if the
Debt Service Coverage (as determined using actual Net Operating Income
and Debt Service during the three (3) calendar month period prior to the
release in question and annualizing the results thereof after taking
into account the release of the Property),
(i) is equal to a greater than 1.50:1.0, then the
Allocated Loan Amount for such Property;
(ii) is equal to or greater than 1.20:1.0 but less than
1.50:1.0, then 110% of the Allocated Loan Amount for such
Property; and
(iii) is equal to or greater than 1.0:1.0 but less than
1.20:1.0, then 130% of the Allocated Loan Amount for such
Property.
(ffff) "REQUESTING LENDER" has the meaning assigned in Section
2.7(g).
(gggg) "REQUIRED PAYMENT" has the meaning assigned in Section
2.6(c).
(hhhh) "RESERVE REQUIREMENT" means, for any Interest Period for
any Eurodollar Loan, the average maximum rate at which reserves
(including, without limitation, any marginal, supplemental or emergency
reserves) are required to be maintained during such Interest Period
under Regulation D by member banks of the Federal Reserve System in New
York City with deposits exceeding $1,000,000,000 against "Eurocurrency
liabilities" (as such term is used in Regulation D). Without limiting
the effect of the foregoing, the Reserve Requirement shall include any
other reserves required to be maintained by such member banks by reason
of any Regulatory Change with respect to (i) any category of liabilities
that includes deposits by reference to which the Libor Base Rate for any
Interest Period for any Eurodollar Loans is to be determined as provided
in the definition of "Libor Base Rate" or (ii) any category of
extensions of credit or other assets that includes Eurodollar Loans.
(iiii) "SECONDARY MARKET TRANSACTION" has the meaning assigned
in Section 11.9(b).
(jjjj) "SHURGARD" means Shurgard Development IV, Inc., a
Washington corporation.
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20
(kkkk) "SINGLE PURPOSE ENTITY" shall mean a corporation, limited
partnership or limited liability company which at all times on and after
the date hereof, unless otherwise approved in writing by Administrative
Agent:
(i) is organized solely for the purpose of one of the
following: (a) acquiring, developing, owning, holding, selling,
leasing, transferring, exchanging, managing and operating the
Portfolio, entering into this Agreement, refinancing the
Portfolio in connection with a permitted repayment of the Loans,
and transacting any and all lawful business that is incident,
necessary and appropriate to accomplish the foregoing or (b)
acting as the sole managing member of Borrower;
(ii) is not engaged and will not engage in any business
unrelated to (a) the acquisition, development, ownership,
management or operation of the Portfolio or (b) acting as the
sole managing member of Borrower;
(iii) does not have and will not have any assets other
than those related to (a) the Property or (b) its membership
interest in Borrower;
(iv) has not engaged, sought or consented to and will
not engage in, seek or consent to any dissolution, winding up,
liquidation, consolidation, merger, sale of all or substantially
all of its assets, transfer of partnership or membership
interests (if such entity is a general partner in a limited
partnership or a member in a limited liability company), or any
amendment of its articles of incorporation, by-laws, limited
partnership certificate, limited partnership agreement, articles
of organization, certificate of formation or operating agreement
(as applicable) with respect to the matters set forth in this
definition;
(v) if such entity is (i) a limited liability company,
has articles of organization, a certificate of formation and/or
an operating agreement, as applicable, (ii) a limited
partnership, has a certificate of limited partnership and
limited partnership agreement, or (ii) a corporation, has a
certificate of incorporation or articles of incorporation, that
in each case provide that such entity (a) will not dissolve,
merge, liquidate or consolidate; (b) sell all or substantially
all of its assets or the assets of any other entity in which it
has a direct or indirect legal or beneficial ownership interest;
(c) engage in any other business activity, other than as
permitted pursuant to the Loan Documents, or amend its
organizational documents with respect to the matters set forth
in this definition without the consent of Administrative Agent;
and (d) shall not file a bankruptcy or insolvency petition or
otherwise institute insolvency proceedings with respect to
itself or to any other entity in which it has a direct or
indirect legal or beneficial ownership interest or is the direct
or indirect general partner or manager without the affirmative
vote of all of the directors of the entity;
(vi) if such entity is a limited partnership, has as its
only general partner a Single Purpose Entity;
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(vii) is and will remain solvent and pay its debts and
liability (including, as applicable, shared personnel and
overhead expenses) from its assets as the same shall become due,
and is maintaining and will maintain adequate capital for the
normal obligations reasonably foreseeable in a business of its
size and character and in light of its contemplated business
operations;
(viii) has not failed and will not fail to correct any
known misunderstanding regarding the separate identity of such
entity;
(ix) has maintained and will maintain its accounts,
books and records separate from any other Person and will file
its own tax returns, except to the extent that it is required to
file consolidated tax returns by law;
(x) has not commingled and will not commingle its funds
or assets with those of any other Person;
(xi) has held and will hold its assets in its own name;
(xii) has maintained and will maintain financial
statements that properly and accurately show its separate assets
and liabilities and do not show the assets or liabilities of any
other Person, and has not permitted and will not permit its
assets to be listed as assets on the financial statement of any
other entity;
(xiii) has paid and will pay its own liabilities and
expenses, including, but not limited to, the salaries of its own
employees (if any), out of its own funds and assets, and has
maintained and will maintain a sufficient number of employees in
light of its contemplated business operations;
(xiv) has observed and will observe all corporate,
partnership or limited liability company formalities, as
applicable;
(xv) has not incurred and will not incur any Debt other
than (a) with respect to Borrower, the Loans and (b) trade and
operational debt which is (i) incurred in the ordinary course of
business, (ii) not more than sixty (60) days past due, (iii)
with trade creditors, (iv) with respect to Borrower, in the
aggregate, in an amount less than $3,000,000.00, (v) not
evidenced by a note, and (vi) paid when due. No Debt other than
the Loans may be secured (subordinate or pari passu) by the
Property;
(xvi) has not and will not assume or guarantee or become
obligated for the debts of any other Person or hold out its
credit as being available to satisfy the obligations of any
other Person except as permitted pursuant to this Agreement;
(xvii) has not and will not acquire obligations or
securities of its members or shareholders or any other
affiliate;
(xviii) has allocated and will allocate fairly and
reasonably any overhead expenses that are shared with an
affiliate, including, but not limited to, paying for
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shared office space and services performed by any officer or
employee of an affiliate;
(xix) maintains and uses and will maintain and use
separate invoices and checks bearing its name. The stationary,
invoices, and checks utilized by the Single Purpose Entity or
utilized to collect its funds or pay its expenses shall bear its
own name and shall not bear the name of any other entity unless
such entity is clearly designated as being the Single Purpose
Entity's agent;
(xx) except in connection with the Loans, has not
pledged and will not pledge its assets for the benefit of any
other Person;
(xxi) has conducted business, held itself out and
identified itself and will conduct business, hold itself out and
identify itself as a separate and distinct entity under its own
name or in a name franchised or licensed to it by a Person other
than an affiliate of Borrower and not as a division or part of
any other Person;
(xxii) has maintained and will maintain its assets in
such a manner that it will not be costly or difficult to
segregate, ascertain or identify its individual assets from
those of any other Person;
(xxiii) has not made and will not make loans to any
Person or hold evidence of indebtedness issued by any other
Person (other than cash and securities issued by an entity that
is not an affiliate or subject to common ownership with such
entity);
(xxiv) has not identified and will not identify its
partners, members or shareholders, or any affiliate of any of
them, as a division or part of it, and has not identified itself
and shall not identify itself as a division of any other Person;
(xxv) has not entered into or been a party to, and will
not enter into or be a party to, any transaction with its
partners, members, shareholders or affiliates except in the
ordinary course of its business and on terms which are
intrinsically fair, commercially reasonable and are no less
favorable to it than would be obtained in a comparable
arm's-length transaction with an unrelated third party;
(xxvi) has not and will not have any obligation to
indemnify its partners, officers, directors or members, as the
case may be, unless such obligation is fully subordinated to the
Indebtedness and will not constitute a claim against it in the
event that, after payment of the Indebtedness, cash flow is
insufficient to pay such obligation;
(xxvii) if such entity is a corporation, it is required
to consider the interests of its creditors in connection with
all corporate actions;
(xxviii) does not and will not have any of its
obligations guaranteed by any affiliate.
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(llll) "SITE ASSESSMENT" means an environmental
engineering report for each Property prepared by an engineer
engaged by Administrative Agent at Borrower's expense, and in a
manner satisfactory to Administrative Agent, based upon an
investigation relating to and making appropriate inquiries
concerning the existence of Hazardous Materials on or about such
Property, and the past or present discharge, disposal, release
or escape of any such substances, all consistent with good
customary and commercial practice.
(mmmm) "SPREAD" means (x) for calendar quarter periods
when the Spread Reduction Requirements are not achieved, 275
basis points, and (y) for calendar quarter periods when the
Spread Reduction Requirements are achieved, 250 basis points.
(nnnn) "SPREAD REDUCTION REQUIREMENTS" means the
following requirements based upon the immediately preceding
three (3) calendar month period: (i) the Portfolio has generated
a 1.50:1.0 Debt Service Coverage, as determined using actual Net
Operating Income and Debt Service (during the three (3) calendar
month period prior to the month within which the release in
question occurs and annualizing the results thereof), (ii) a
fifteen percent (15%) Cash on Cash Return (as determined using
actual Net Operating Income and Debt Service during the three
(3) calendar month period prior to the month within which the
release in question occurs and annualizing the results thereof),
and (iii) no Event of Default or Potential Default exists under
this Agreement or any Loan Document.
(oooo) "STANDARD NOI ADJUSTMENTS" means the following
adjustments to Net Operating Income: (a) debiting from Net
Operating Income an amount for reserves equal to $0.15 per
rentable square foot of the Portfolio; (b) assuming an Operating
Expense for a five percent (5%) management fee; and (c) reducing
Net Operating Income by an amount equal to the income generated
at any Property from activities other than the rental of storage
units (including late fees) in excess of seven percent (7%) of
the total Operating Revenues generated at such Property during
the period in question.
(pppp) "STATE" means the State of New York.
(qqqq) "STUB INTEREST PERIOD" has the meaning assigned
in Section 2.3(a).
(rrrr) "TAX AND INSURANCE ESCROW RESERVE" has the
meaning assigned in Section 3.4.
(ssss) "TAXES" has the meaning assigned in Section 8.2.
(tttt) "THIRD PARTY REPORTS" means all third party
reports relating to one or more Properties, including, without
limitations, any and all engineering reports, environmental
reports, Construction Expense Audits and credit reports
(regardless of who completed said reports), each in form and
substance satisfactory to Administrative Agent and the Lenders
and all such third party reports must be performed for the use
and reliance of Administrative Agent and the Lenders, and
Administrative Agent's and the Lenders' affiliates, successors,
assigns, rating agencies, and other institutional investors who
acquire as interest in the Loan.
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(uuuu) "THRESHOLD AMOUNT" means $150,000.00.
(vvvv) "TYPE" has the meaning assigned in Section 1.2.
SECTION 1.2 TYPES OF LOANS. Loans hereunder are distinguished by "TYPE".
The "TYPE" of a Loan refers to whether such Loan is an Alternate Base Rate Loan
or a Eurodollar Loan, each of which constitutes a Type.
ARTICLE 2
LOAN TERMS
SECTION 2.1 THE LOAN.
(a) LOANS. Each Lender severally agrees, on the terms and
conditions of this Agreement, to make a term loan to Borrower in Dollars
in a principal amount up to but not exceeding the amount of the
Commitment of such Lender, which in the aggregate will be up to
SIXTY-SEVEN MILLION SEVEN HUNDRED THOUSAND AND NO/100 DOLLARS
($67,700,000.00) (inclusive of the amount allocated for funding under
the Interest Budget) shall be funded in one or more advances and repaid
in accordance with this Agreement; provided, however, that
notwithstanding the foregoing of this sentence, GECC shall be the Lender
obligated to fund the Loan advances during the first Loan Year. All
advances of the Loans shall be made in accordance with the Budget. The
initial advance of the Loan, in the amount of the Initial Advance
Amount, shall be made in accordance with the Budget upon Borrower's
satisfaction of the conditions to initial advance described in Schedule
2.1. Administrative Agent and Lenders acknowledge that, except as
specifically set forth on Schedule 2.1, all such conditions have been
satisfied or waived with respect only to the initial advance hereunder.
Subsequent advances (with the parties acknowledging that GECC will be
the only Lender responsible to make subsequent advances) for the items
shown on the Budget shall be made upon Borrower's satisfaction of the
conditions for such advances described in Schedule 2.1. Notwithstanding
anything to the contrary in this Agreement or the Loan Documents, the
maximum principal amount of the Loan (including all amounts allocated
for funding under the Interest Budget) shall not exceed 60% of the sum
of the GECC-Approved Acquisition Costs and the GECC-Approved Closing
Costs.
(b) LENDING OFFICES. The Loans of each Lender shall be made and
maintained at such Lender's Applicable Lending Office for Loans of such
Type.
(c) SEVERAL OBLIGATIONS. The failure of any Lender to make any
Loan to be made by it on the date specified therefor shall not relieve
any other Lender of its obligation to make its Loan, but neither any
Lender nor Administrative Agent shall be responsible for the failure of
any other Lender to make a Loan to be made by such other Lender.
(d) NOTES.
(i) LOAN NOTES. The Loans made by each Lender shall be
evidenced by a single promissory note of Borrower substantially
in the form of Exhibit C,
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payable to such Lender in a principal amount equal to the amount
of its Commitment as originally in effect and otherwise duly
completed.
(ii) ENDORSEMENT ON NOTES. The date, amount, Type,
interest rate and duration of Interest Period (if applicable) of
each Loan made by each Lender to Borrower, and each payment made
on account of the principal thereof, shall be recorded by such
Lender on its books and, prior to any transfer of the Note held
by it, endorsed by such Lender on the schedule attached to such
Note or any continuation thereof; provided that the failure of
such Lender to make any such recordation or endorsement shall
not affect the obligations of Borrower to make a payment when
due of any amount owing hereunder or under such Note in respect
of such Loans.
(iii) SUBSTITUTION, EXCHANGE AND SUBDIVISION OF NOTES.
No Lender shall be entitled to have its Notes substituted or
exchanged for any reason, or subdivided for promissory notes of
lesser denominations, except in connection with a permitted
assignment of all or any portion of such Lender's Commitment,
Loans and Note pursuant to Section 11.9(c), Section 11.10 and
Section 11.24 (and, if requested by any Lender, Borrower agrees
to so substitute or exchange any Notes and enter into note
splitter agreements in connection therewith).
(iv) LOSS, THEFT, DESTRUCTION OR MUTILATION OF NOTES. In
the event of the loss, theft or destruction of any Note, upon
Borrower's receipt of a reasonably satisfactory indemnification
agreement executed in favor of Borrower by the holder of such
Note, or in the event of the mutilation of any Note, upon the
surrender of such mutilated Note by the holder thereof to
Borrower, Borrower shall execute and deliver to such holder a
new replacement Note in lieu of the lost, stolen, destroyed or
mutilated Note.
(v) FUNDING OF LOANS. Each Lender shall make each Loan
to be made by it hereunder on the proposed date thereof by wire
transfer of immediately available funds by 12:00 noon, New York
City time, to the account of Administrative Agent most recently
designated by it for such purpose by notice to the Lenders.
Administrative Agent will promptly make such Loans available to
the Borrowers by wire transfer of immediately available funds to
an account in the United States designated by the applicable
Borrower in the applicable Borrowing Request.
SECTION 2.2 INTEREST RATE; LATE CHARGE. The outstanding principal
balance of the Loan (including any amounts added to principal under the Loan
Documents) shall bear interest at a rate of interest equal to the sum of the
Adjusted Libor Rate plus the Spread, subject to the provisions of this Agreement
which, in certain instances, require payment of interest at the Alternate Base
Rate, such Eurodollar Loans shall Continue from one Interest Period to the next
Interest Period (the "CONTRACT RATE"). The parties acknowledge that the Spread
is subject to adjustment both upwards and downwards based upon whether or not
the Spread Reduction Requirements are then met, and that there is no limit to
the number of times that the Spread may be increased or decreased hereunder due
to the Spread Reduction Requirements being or not
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being met hereunder. Interest shall be computed on the basis of a fraction, the
denominator of which is three hundred sixty (360) and the numerator of which is
the actual number of days elapsed (including the first day but excluding the
last day) during the period for which payable. If Borrower fails to pay any
installment of interest or principal within five (5) days after the date on
which the same is due, Borrower shall pay to Administrative Agent (on behalf of
the Lenders) a late charge on such past-due amount, as liquidated damages and
not as a penalty, equal to the greater of (a) interest at the Default Rate on
such amount from the date when due until paid, or (b) five percent (5%) of such
amount, but not in excess of the maximum amount of interest allowed by
applicable law. While any Event of Default exists, the Loan shall bear interest
at the Default Rate; provided, that during the continuance of an Event of
Default Administrative Agent may suspend the right of Borrower to Continue any
Loan as a Eurodollar Loan, in which event all Loans shall be Converted (on the
last day(s) of the respective Interest Periods therefor) into Alternate Base
Rate Loans and, thereafter, the Default Rate shall be computed using the
Alternate Base Rate.
SECTION 2.3 TERMS OF PAYMENT. The Loan shall be payable as follows:
(a) INTEREST. On the date hereof, Borrower shall make a payment
of interest only (covering the period from the date hereof through and
including December 31, 2000 (the "STUB INTEREST PERIOD"), and beginning
with the Interest Period commencing on January 1, 2001, Borrower shall
pay interest in arrears on the last day of each Interest Period, or if
the Alternate Base Rate is applicable, the first Business Day (assuming
clause (b) of such definition applies) of each month (each a "PAYMENT
DATE") in accordance with the instructions as Administrative Agent may
from time to time provide until all amounts due under the Loan Documents
are paid in full.
(b) INTEREST BUDGET.
(i) No later than two (2) business days prior to the
first day of each month, Borrower shall deliver to
Administrative Agent a certification of the Net Operating Income
of the Portfolio over the previous month and such supporting
information concerning the same as requested by Administrative
Agent. Upon Administrative Agent's verification of such Net
Operating Income amount which is contained in the monthly
reports delivered to Administrative Agent pursuant to Section
7.1(a), and so long as (A) no Event of Default or Potential
Event of Default exists, and (B) Borrower pays to Administrative
Agent all Net Operating Income generated by the Portfolio during
such prior month (less the Organizational Expenses paid during
such month) on account of, and up to the amount of, the interest
due hereunder and under the Notes, Administrative Agent shall,
to the extent of the funds then remaining in the Interest Budget
Reserve and in the Interest Budget, advance to Administrative
Agent (on behalf of the Lenders) an amount equal to the Debt
Service Shortfall. Advances for any Debt Service Shortfall shall
be made first from the Interest Budget Reserve to the extent of
the funds in the Interest Budget Reserve, then, from funds held
back by Administrative Agent under the Interest Budget to the
extent of funds in the Interest Budget. Thereafter Borrower
shall be solely responsible for, and shall
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pay from sources other than the Loan, all interest and other
amounts due hereunder as and when due.
(ii) All funds that are a part of the Interest Budget
shall be treated as funds having been funded by Administrative
Agent for purposes of calculating Debt Service and Cash on Cash
Return hereunder, whether or not such funds have been so
advanced hereunder.
(iii) Administrative Agent shall hold back from funding,
as the initial balance of the Interest Budget, $2,000,000.00 of
the Loan.
(iv) Administrative Agent may adjust, in Administrative
Agent's sole discretion and from time to time, the required
balance of the Interest Budget based upon, among other things,
the Net Operating Income and Debt Service Coverage. If
Administrative Agent determines that an increase to the Interest
Budget is required, then Administrative Agent shall notify
Borrower in writing of such required amount and shall
simultaneously provide Borrower with a written statement of
Administrative Agent's financial calculations. Borrower shall
have ten (10) business days from the receipt of Administrative
Agent's notice to deposit with Administrative Agent in the
Interest Budget Reserve the sum requested by Administrative
Agent in the deficiency notice. Failure of Borrower so to
deposit the sum requested by GECC within said ten (10) business
day period shall constitute an Event of Default, except that
Borrower shall have an additional three (3) days to contest
Administrative Agent's determination only for so long as (a)
Borrower is contesting in good faith, and (b) failure to deposit
the requested sums with Administrative Agent will not result in
the interruption of payment of interest due hereunder to
Administrative Agent or impair Administrative Agent's
collateral.
Notwithstanding anything to the contrary in this Article 2, while an
Event of Default or Potential Default exists, Administrative Agent shall
not be obligated to advance to Borrower any portion of the Interest
Budget, and while an Event of Default exists, Administrative Agent shall
be entitled, without notice to Borrower, to apply any funds in the
Interest Budget to satisfy Borrower's obligations under the Loan
Documents.
(c) MATURITY; EXTENSION. On the Maturity Date, Borrower shall
pay to Administrative Agent (on behalf of the Lenders) all outstanding
principal, accrued and unpaid interest, and any other amounts due under
the Loan Documents. The Maturity Date may be extended by Borrower for up
to two (2) additional, consecutive one year periods upon satisfaction of
the following conditions:
(i) No Event of Default or Potential Default shall
exist;
(ii) Borrower has paid to Administrative Agent in cash
an extension fee for each such extension in an amount equal to
25 basis points based upon the outstanding principal balance of
the Loan, including, without limitation, any
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amounts in the Interest Budget advanced by Administrative Agent
to Borrower under Section 2.2;
(iii) Administrative Agent has received, in form and
substance satisfactory to Administrative Agent, (1) extension
documentation; (2) title insurance "bring down" endorsements for
the Portfolio; and (3) updated and certified Third Party
Reports, other than any Construction Expense Audit, (but with
respect to items in clause (3) hereof, only to extent that
Administrative Agent, in Administrative Agent's reasonable
discretion, requires any Third Party Report due to the
occurrence of an event at a Property since the date of the last
Third Party Report relating thereto);
(iv) the Portfolio has generated for the two (2)
calendar quarters immediately preceding the then Maturity Date,
1.20:1.0 Debt Service Coverage (as determined using actual Net
Operating Income and Debt Service during the three (3) calendar
month period prior to the month within which the release in
question occurs and annualizing the results thereof); and
(v) the ratio of the outstanding principal balance of
the Loan (including all amounts being advanced to Borrower under
this (c) from the Interest Budget in connection with such
extension) to GECC-Approved Acquisition Costs and GECC Approved
Closing Costs does not exceed sixty percent (60%).
Upon any extension of the Maturity Date under clause (c) above, Borrower shall
be entitled to an advance of any unused amounts in the Interest Budget and
Interest Budget Reserve (or any portion thereof), except that items (ii), (iv)
and (v) of clause (c) above shall be satisfied upon taking into account any sums
so advanced. The maximum principal amount of the Loan to be funded by
Administrative Agent under this Agreement shall be permanently reduced by that
portion of the Interest Budget that is not advanced to Borrower in accordance
with this paragraph.
(d) PREPAYMENT.
(i) Subject to Section 2.3(e) and excluding any prepayments
which are the result of the application of condemnation or casualty
awards, the Loans are closed to prepayment in whole or in part, during
the first Loan Year. Thereafter, upon not less than fifteen (15) days'
prior written notice to Administrative Agent, Borrower may prepay the
Loans, in whole or in part, without prepayment premium other than any
premium required by clause (ii) below. Subject to the limitations set
forth above, if the Loans are prepaid, in whole or in part, including,
without limitation, pursuant to a casualty or condemnation, each such
prepayment shall be made to Administrative Agent on the prepayment date
specified in the applicable notice to Administrative Agent pursuant
hereto, and (in every case) together with (a) the accrued and unpaid
interest on the principal amount prepaid and (b) any amounts payable to
a Lender pursuant to Section 2.7(e) as a result of such prepayment while
a Eurodollar Loan is in effect. If the Loans are closed to
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prepayment, Borrower shall pay, in addition to all other amounts
outstanding under the Loan Documents, a prepayment premium equal to five
percent (5%) of the outstanding balance of the Loans.
(e) PARTIAL RELEASES. Notwithstanding the foregoing of Section
2.3(d), Borrower may obtain the release of any Property upon the
satisfaction of all of the following conditions:
(A) Payment to Administrative Agent (on behalf of
Lenders) of the Release Price;
(B) Administrative Agent determines, in Administrative
Agent's sole discretion, that the amount of the Interest Budget
is satisfactory;
(C) Delivery by Borrower to Administrative Agent of a
release of lien and related loan documentation in a form
appropriate for each jurisdiction and satisfactory to
Administrative Agent and the Lenders, which the Administrative
Agent and Lenders shall execute and deliver to Borrower for
recordation;
(D) No Event of Default or Potential Default by Borrower
or any Borrower Party shall exist under this Agreement or any
other Loan Document;
(E) Borrower shall pay all reasonable and actual third
party costs and expenses incurred by Administrative Agent in
connection with the release of the Property;
(F) Such release shall be in compliance with all
applicable legal requirements, and will not impair or otherwise
adversely affect the liens, security interest, and other rights
of Administrative Agent;
(G) After giving effect to such release, the outstanding
principal balance of the Loan is not less than $15,000,000.00;
(H) If, after giving effect to such release, the
outstanding principal balance is equal to or greater than
$15,000,000.000 but less than $30,000,000.00, then the Debt
Service Coverage (as determined using actual Net Operating
Income and Debt Service during the three (3) calendar month
period prior to the release in question and annualizing the
results thereof), after giving effect to such release, is not
less than 1.20:1.0;
(I) If, after giving effect to such release, the
outstanding principal balance of the Loan is equal to or greater
than $30,000,000.00, then the Debt Service Coverage (as
determined using actual Net Operating Income and Debt Service
during the three (3) calendar month period prior to the
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release in question and annualizing the results thereof) after
giving effect to such release, is not less than 1.0:1.0; and
(J) any such other conditions as may be contained in the
Loan Documents or reasonably requested by Administrative Agent.
(f) APPLICATION OF PAYMENTS. All payments received by
Administrative Agent (on behalf of Lenders) under the Loan Documents
shall be applied: first, to any fees and expenses due to Administrative
Agent or Lenders under the Loan Documents; second, to any Default Rate
interest or late charges; third, to accrued and unpaid interest; and
fourth, to the principal sum and other amounts due under the Loan
Documents; provided, however, that, if an Event of Default exists
Administrative Agent shall apply such payments in any order or manner as
Administrative Agent shall determine.
SECTION 2.4 SECURITY. The Loans shall be secured by the Mortgage
creating a first lien on each Property, the Assignment of Rents and Leases and
the other Loan Documents. As further security for the Loans Borrower agrees to
fund the Interest Budget and the Interest Budget Reserve in accordance with
Section 2.3(b) and the Tax and Insurance Escrow Reserve in accordance with
Section 3.4.
SECTION 2.5 FEES. In addition to any and all other amounts due under
this Agreement in the Loan Documents, Borrower shall pay to Administrative Agent
the following fees:
(a) UNUSED FEE. A fee equal to 25 basis points per annum
calculated on the average daily unfunded portion of the Loans, and
payable to Administrative Agent quarterly in arrears.
(b) ADMINISTRATION FEE. A fee equal to $75,000.00 per annum, and
payable to Administrative Agent quarterly in arrears only upon and for
so long as there has been a Secondary Market Transaction, including,
without limitation, a syndication of the Loan.
All such fees shall be invoiced by Administrative Agent to Borrower and paid by
Borrower contemporaneously with the next payment then due under the Loan.
SECTION 2.6 PAYMENTS; PRO RATA TREATMENT; ETC.
(a) PAYMENTS GENERALLY.
(i) PAYMENTS BY BORROWER. Except to the extent otherwise
provided herein, all payments of principal, interest and other
amounts to be made by Borrower under this Agreement and the
Notes, and, except to the extent otherwise provided therein, all
payments to be made by Borrower under any other Loan Document,
shall be made in Dollars, in immediately available funds,
without deduction, set-off or counterclaim, to Administrative
Agent at an account designated by Administrative Agent by notice
to Borrower, not later than 1:00 p.m., New York City time, on
the date on which such payment shall become due (each such
payment made after such time on such due date to be deemed to
have been made on the next succeeding Business Day).
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(ii) APPLICATION OF PAYMENTS. Subject to the provisions
of Section 2.3(f), Borrower shall, at the time of making each
payment under this Agreement or any Note for the account of any
Lender, specify to Administrative Agent (which shall so notify
the intended recipient(s) thereof) the Loans or other amounts
payable by Borrower hereunder to which such payment is to be
applied (and in the event that Borrower fails to so specify, or
if an Event of Default has occurred and is continuing,
Administrative Agent may distribute such payment to the Lenders
for application in such manner as it may determine to be
appropriate, subject to Section 2.6(b) and any other agreement
among Administrative Agent and the Lenders with respect to such
application).
(iii) FORWARDING OF PAYMENTS BY ADMINISTRATIVE AGENT.
Except as otherwise agreed by Administrative Agent and the
Lenders, each payment received by Administrative Agent under
this Agreement or any Note for account of any Lender shall be
paid by Administrative Agent promptly to such Lender, in
immediately available funds, for account of such Lender's
Applicable Lending Office for the Loan or other obligation in
respect of which such payment is made.
(iv) EXTENSIONS TO NEXT BUSINESS DAY. If the due date of
any payment under this Agreement or any Note would otherwise
fall on a day that is not a Business Day, such date shall be
extended to the next succeeding Business Day, and interest shall
be payable for any principal so extended for the period of such
extension.
(b) PRO RATA TREATMENT. Except to the extent otherwise provided
herein: (a) each advance of a Loan from the Lenders under Section 2.1(a)
shall be made from the Lenders, and any termination of the obligation to
make an advance of the Loans shall be applied to the respective
Commitments of the Lenders, pro rata according to the amounts of their
respective Commitments; (b) except as otherwise provided in Section
2.7(d), Loans shall be allocated pro rata among the Lenders according to
the amounts of their respective Commitments (in the case of the making
of Loans) or their respective Loans (in the case of Conversions or
Continuations of Loans); (c) each payment or prepayment of principal of
Loans by Borrower shall be made for account of the Lenders pro rata in
accordance with the respective unpaid principal amounts of the Loans
held by them; and (d) each payment of interest on Loans by Borrower
shall be made for account of the Lenders pro rata in accordance with the
amounts of interest on such Loans then due and payable to the respective
Lenders.
(c) NON-RECEIPT OF FUNDS BY ADMINISTRATIVE AGENT. Unless
Administrative Agent shall have been notified by a Lender or Borrower
(in either case, the "PAYOR") prior to the date on which the Payor is to
make payment to Administrative Agent of (in the case of a Lender) the
proceeds of a Loan to be made by such Lender hereunder or (in the case
of Borrower) a payment to Administrative Agent for account of any Lender
hereunder (in either case, such payment being herein called the
"REQUIRED PAYMENT"), which notice shall be effective upon receipt, that
the Payor does not intend to make the Required Payment to Administrative
Agent, Administrative Agent may assume that the Required Payment has
been made and may, in reliance upon such assumption (but shall
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not be required to), make the amount thereof available to the intended
recipient(s) on such date; and, if the Payor has not in fact made the
Required Payment to Administrative Agent, the recipient(s) of such
payment shall, on demand, repay to Administrative Agent the amount so
made available together with interest thereon in respect of each day
during the period commencing on the date (the "ADVANCE DATE") such
amount was so made available by Administrative Agent until the date
Administrative Agent recovers such amount at a rate per annum equal to
(a) the Federal Funds Rate for such day in the case of payments returned
to Administrative Agent by any of the Lenders or (b) the applicable
interest rate due hereunder with respect to payments returned by
Borrower to Administrative Agent and, if such recipient(s) shall fail
promptly to make such payment, Administrative Agent shall be entitled to
recover such amount, on demand, from the Payor, together with interest
as aforesaid, provided that if neither the recipient(s) nor the Payor
shall return the Required Payment to Administrative Agent within three
(3) Business Days of the Advance Date, then, retroactively to the
Advance Date, the Payor and the recipient(s) shall each be obligated to
pay interest on the Required Payment as follows:
(i) if the Required Payment shall represent a payment to
be made by Borrower to the Lenders, Borrower and the
recipient(s) shall each be obligated retroactively to the
Advance Date to pay interest in respect of the Required Payment
at the Default Rate (without duplication of the obligation of
Borrower under Section 2.2 to pay interest on the Required
Payment at the Default Rate), it being understood that the
return by the recipient(s) of the Required Payment to
Administrative Agent shall not limit such obligation of Borrower
under Section 2.2 to pay interest at the Default Rate in respect
of the Required Payment, and
(ii) if the Required Payment shall represent proceeds of
a Loan to be made by the Lenders to Borrower, the Payor and
Borrower shall each be obligated retroactively to the Advance
Date to pay interest in respect of the Required Payment pursuant
to whichever of the rates specified in Section 2.2 is applicable
to the Type of such Loan, it being understood that the return by
Borrower of the Required Payment to Administrative Agent shall
not limit any claim Borrower may have against the Payor in
respect of such Required Payment.
(d) SHARING OF PAYMENTS, ETC.
(i) RIGHT OF SET-OFF. Borrower agrees that, in addition
to (and without limitation of) any right of set-off, banker's
lien or counterclaim a Lender may otherwise have, each Lender
shall be entitled, at its option (to the fullest extent
permitted by law), to set off and apply any deposit (general or
special, time or demand, provisional or final), or other
indebtedness, held by it for the credit or account of Borrower
at any of its offices, in Dollars or in any other currency,
against any principal of or interest on any of such Lender's
Loans or any other amount payable to such Lender hereunder, that
is not paid when due (regardless of whether such deposit or
other indebtedness is then due to Borrower), in which case it
shall promptly notify Borrower and Administrative Agent thereof,
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provided that such Lender's failure to give such notice shall
not affect the validity thereof.
(ii) SHARING. If any Lender shall obtain from Borrower
payment of any principal of or interest on any Loan owing to it
or payment of any other amount under this Agreement or any other
Loan Document through the exercise of any right of set-off,
banker's lien or counterclaim or similar right or otherwise
(other than from Administrative Agent as provided herein), and,
as a result of such payment, such Lender shall have received a
greater percentage of the principal of or interest on the Loans
or such other amounts then due hereunder or thereunder by
Borrower to such Lender than the percentage received by any
other Lender, it shall promptly purchase from such other Lenders
participations in (or, if and to the extent specified by such
Lender, direct interests in) the Loans or such other amounts,
respectively, owing to such other Lenders (or in interest due
thereon, as the case may be) in such amounts, and make such
other adjustments from time to time as shall be equitable, to
the end that all the Lenders shall share the benefit of such
excess payment (net of any expenses that may be incurred by such
Lender in obtaining or preserving such excess payment) pro rata
in accordance with the unpaid principal of and/or interest on
the Loans or such other amounts, respectively, owing to each of
the Lenders. To such end all the Lenders shall make appropriate
adjustments among themselves (by the resale of participations
sold or otherwise) if such payment is rescinded or must
otherwise be restored.
(iii) CONSENT BY BORROWER. Borrower agrees that any
Lender so purchasing such a participation (or direct interest)
may exercise all rights of set-off, banker's lien, counterclaim
or similar rights with respect to such participation as fully as
if such Lender were a direct holder of Loans or other amounts
(as the case may be) owing to such Lender in the amount of such
participation.
(iv) RIGHTS OF LENDERS; BANKRUPTCY. Nothing contained
herein shall require any Lender to exercise any such right or
shall affect the right of any Lender to exercise, and retain the
benefits of exercising, any such right with respect to any other
indebtedness or obligation of Borrower. If, under any applicable
bankruptcy, insolvency or other similar law, any Lender receives
a secured claim in lieu of a set-off to which this Section
2.6(d) applies, such Lender shall, to the extent practicable,
exercise its rights in respect of such secured claim in a manner
consistent with the rights of the Lenders entitled under this
Section 2.6(d) to share in the benefits of any recovery on such
secured claim.
SECTION 2.7 YIELD PROTECTION; ETC.
(a) ADDITIONAL COSTS.
(i) COSTS OF MAKING OR MAINTAINING EURODOLLAR LOANS.
Borrower shall pay directly to each Lender from time to time
such amounts as such Lender
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may determine to be necessary to compensate such Lender for any
costs that such Lender determines are attributable to its making
or maintaining of any Eurodollar Loans or its obligation to make
any Eurodollar Loans hereunder, or any reduction in any amount
receivable by such Lender hereunder in respect of any of such
Loans or such obligation (such increases in costs and reductions
in amounts receivable being herein called "ADDITIONAL COSTS"),
resulting from any Regulatory Change that:
(A) shall subject any Lender (or its Applicable
Lending Office for any of such Loans) to any tax, duty
or other charge in respect of such Loans or its Note or
changes the basis of taxation of any amounts payable to
such Lender under this Agreement or its Note in respect
of any of such Loans (excluding changes in the rate of
tax on the overall net income of such Lender or of such
Applicable Lending Office by the jurisdiction in which
such Lender has its principal office or such Applicable
Lending Office); or
(B) imposes or modifies any reserve, special
deposit or similar requirements (other than the Reserve
Requirement used in the determination of the Adjusted
Libor Rate for any Interest Period for such Loan)
relating to any extensions of credit or other assets of,
or any deposits with or other liabilities of, such
Lender (including, without limitation, any of such Loans
or any deposits referred to in the definition of "Libor
Base Rate"), or any commitment of such Lender
(including, without limitation, the Commitment of such
Lender hereunder); or
(C) imposes any other condition affecting this
Agreement or its Note (or any of such extensions of
credit or liabilities) or its Commitment.
If any Lender requests compensation from Borrower under this
paragraph (a), Borrower may, by notice to such Lender (with a
copy to Administrative Agent), suspend the obligation of such
Lender thereafter to make or Continue Eurodollar Loans, or to
Convert Loans into Eurodollar Loans, until the Regulatory Change
giving rise to such request ceases to be in effect (in which
case the provisions of Section 2.7(d) shall be applicable),
provided that such suspension shall not affect the right of such
Lender to receive the compensation so requested.
(ii) COSTS ATTRIBUTABLE TO REGULATORY CHANGE OR
RISK-BASED CAPITAL GUIDELINES. Without limiting the effect of
the foregoing provisions of this Section 2.7(a) (but without
duplication), Borrower shall pay directly to each Lender from
time to time on request such amounts as such Lender may
determine to be necessary to compensate such Lender (or, without
duplication, the bank holding company of which such Lender is a
subsidiary) for any costs that it determines are attributable to
the maintenance by such Lender (or any Applicable Lending Office
or such bank holding company), pursuant to any law or regulation
or any interpretation, directive or request (whether or not
having the force of law and whether or not failure to comply
therewith would be unlawful) of any court or
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governmental or monetary authority (i) following any Regulatory
Change or (ii) implementing any risk-based capital guideline or
other requirement (whether or not having the force of law and
whether or not the failure to comply therewith would be
unlawful) hereafter issued by any government or governmental or
supervisory authority implementing at the national level the
Basle Accord, of capital in respect of its Commitment or Loans
(such compensation to include, without limitation, an amount
equal to any reduction of the rate of return on assets or equity
of such Lender (or any Applicable Lending Office or such bank
holding company) to a level below that which such Lender (or any
Applicable Lending Office or such bank holding company) could
have achieved but for such law, regulation, interpretation,
directive or request. If at any time, unless there is an uncured
Event of Default, any payee hereunder receives a refund or tax
credit with respect to any tax, duty, or other charge as to
which it has been indemnified by the Borrower or with respect to
which the Borrower has paid additional amounts pursuant to this
Section 2.7, such payee shall pay over such refund or the amount
of such tax credit to the Borrower, net of its actual
out-of-pocket expenses incurred to receive such refund or tax
credit and with interest (other than any interest paid by the
relevant governmental authority with respect to such refund or
tax credit).
(iii) NOTIFICATION AND CERTIFICATION. Each Lender shall
notify Borrower of any event occurring after the date hereof
entitling such Lender to compensation under paragraph (i) or
(ii) of this Section 2.7(a) as promptly as practicable, but in
any event within 45 days, after such Lender obtains actual
knowledge thereof; provided that (i) if any Lender fails to give
such notice within 45 days after it obtains actual knowledge of
such an event, such Lender shall, with respect to compensation
payable pursuant to this Section 2.7(a) in respect of any costs
resulting from such event, only be entitled to payment under
this Section 2.7(a) for costs incurred from and after the date
45 days prior to the date that such Lender does give such notice
and (ii) each Lender will designate a different Applicable
Lending Office for the Loans of such Lender affected by such
event if such designation will avoid the need for, or reduce the
amount of, such compensation and will not, in the sole opinion
of such Lender, be disadvantageous to such Lender, except that
such Lender shall have no obligation to designate an Applicable
Lending Office located in the United States of America. Each
Lender will furnish to Borrower a certificate setting forth the
basis and amount of each request by such Lender for compensation
under paragraph (i) or (ii) of this Section 2.7(a).
Determinations and allocations by any Lender for purposes of
this Section 2.7(a) of the effect of any Regulatory Change
pursuant to paragraph (i) of this Section 2.7(a), or of the
effect of capital maintained pursuant to paragraph (ii) of this
Section 2.7(a), on its costs or rate of return of maintaining
Loans or its obligation to make Loans, or on amounts receivable
by it in respect of Loans, and of the amounts required to
compensate such Lender under this Section 2.7(a), shall be
conclusive, provided that such determinations and allocations
are made on a reasonable basis.
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(b) LIMITATION ON TYPES OF LOANS. Anything herein to the
contrary notwithstanding, if, on or prior to the determination of the
Libor Base Rate for any Interest Period for any Eurodollar Loan:
(i) Administrative Agent determines, which determination
shall be conclusive, that quotations of interest rates for the
relevant deposits referred to in the definition of Libor Base
Rate are not being provided in the relevant amounts or for the
relevant maturities for purposes of determining rates of
interest for Eurodollar Loans as provided herein; or
(ii) the Majority Lenders determine, which determination
shall be conclusive, and notify Administrative Agent that the
relevant rates of interest referred to in the definition of
Libor Base Rate upon the basis of which the rate of interest for
Eurodollar Loans for such Interest Period is to be determined
are not likely adequately to cover the cost to such Lenders of
making or maintaining Eurodollar Loans for such Interest Period;
then Administrative Agent shall give Borrower and each Lender prompt
notice thereof and, so long as such condition remains in effect, the
Lenders shall be under no obligation to make additional Eurodollar
Loans, to Continue Eurodollar Loans or to Convert Loans of any other
Type into Eurodollar Loans, and Borrower shall, on the last day(s) of
the then current Interest Period(s) for the outstanding Eurodollar
Loans, either prepay such Loans or such Loans shall be automatically
Converted into Alternate Base Rate Loans.
(c) ILLEGALITY. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to honor its obligation to make or maintain
Eurodollar Loans hereunder (and, in the sole opinion of such Lender, the
designation of a different Applicable Lending Office would either not
avoid such unlawfulness or would be disadvantageous to such Lender),
then such Lender shall promptly notify Borrower thereof (with a copy to
Administrative Agent) and such Lender's obligation to make or Continue,
or to Convert Loans of any other Type into, Eurodollar Loans shall be
suspended until such time as such Lender may again make and maintain
Eurodollar Loans (in which case the provisions of Section 2.7(d) shall
be applicable).
(d) TREATMENT OF AFFECTED LOANS. If the obligation of any Lender
to make Eurodollar Loans or to Continue, or to Convert Alternate Base
Rate Loans into, Eurodollar Loans shall be suspended pursuant to Section
2.7(a) or (c), such Lender's Loans shall be automatically Converted into
Alternate Base Rate Loans on the last day(s) of the then current
Interest Period(s) for Loans (or, in the case of a Conversion resulting
from a circumstance described in (c), on such earlier date as such
Lender may specify to Borrower with a copy to Administrative Agent) and,
unless and until such Lender gives notice as provided below that the
circumstances specified in Section 2.7(a) or (c) that gave rise to such
Conversion no longer exist:
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(i) to the extent that such Lender's Loans have been so
Converted, all payments and prepayments of principal that would
otherwise be applied to such Lender's Loans shall be applied
instead to its Alternate Base Rate Loans; and
(ii) all Loans that would otherwise be made or Continued
by such Lender as Eurodollar Loans shall be made or Continued
instead as Alternate Base Rate Loans, and all Loans of such
Lender that would otherwise be Converted into Eurodollar Loans
shall remain as Alternate Base Rate Loans.
If such Lender gives notice to Borrower with a copy to Administrative Agent that
the circumstances specified in Section 2.7(a) or Section 2.7(c) that gave rise
to the Conversion of such Lender's Loans pursuant to this Section 2.7(d) no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Eurodollar Loans made by other Lenders are
outstanding, such Lender's Alternate Base Rate Loans shall be automatically
Converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding Eurodollar Loans, to the extent necessary so that, after giving
effect thereto, all Alternate Base Rate Loans and Eurodollar Loans are allocated
among the Lenders ratably (as to principal amounts, Types and Interest Periods)
in accordance with their respective Commitments.
(e) COMPENSATION. Borrower shall pay to Administrative Agent for
account of each Lender, upon the request of such Lender through
Administrative Agent, such amount or amounts as shall be sufficient (in
the reasonable opinion of such Lender) to compensate it for any loss,
cost or expense that such Lender determines is attributable to:
(i) any payment, prepayment or Conversion of a
Eurodollar Loan made by such Lender for any reason (including,
without limitation, the acceleration of the Loans pursuant to
Administrative Agent's or the Lenders' rights referred to in
Article 10) on a date other than the last day of the Interest
Period for such Loan; or
(ii) any failure by Borrower for any reason to borrow a
Eurodollar Loan from such Lender on the date for such borrowing
specified in the relevant notice of borrowing given to
Administrative Agent in accordance with the terms of this
Agreement.
Without limiting the effect of the preceding sentence, such compensation shall
include an amount equal to the excess, if any, of (i) the amount of interest
that otherwise would have accrued on the principal amount so paid, prepaid,
Converted or not borrowed for the period from the date of such payment,
prepayment, Conversion or failure to borrow to the last day of the then current
Interest Period for such Loan (or, in the case of a failure to borrow, the
Interest Period for such Loan that would have commenced on the date specified
for such borrowing) at the applicable rate of interest for such Loan provided
for herein over (ii) the amount of interest that otherwise would have accrued on
such principal amount at a rate per annum equal to the interest component of the
amount such Lender would have bid in the London interbank market for Dollar
deposits of leading banks in amounts comparable to such principal amount and
with maturities comparable to such period (as reasonably determined by such
Lender), or if such Lender shall cease to make such bids, the equivalent rate,
as reasonably determined by such Lender, derived
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from Page 3750 of the Dow Xxxxx Markets (Telerate) Service or other publicly
available source as described in the definition of Libor Base Rate.
(f) U.S. TAXES.
(i) GROSS-UP FOR DEDUCTION OR WITHHOLDING OF U.S. TAXES.
Borrower agrees to pay to each Lender that is not a U.S. Person such
additional amounts as are necessary in order that the net payment of any
amount due to such non-U.S. Person hereunder after deduction for or
withholding in respect of any U.S. Taxes imposed with respect to such
payment (or in lieu thereof, payment of such U.S. Taxes by such non-U.S.
Person), will not be less than the amount stated herein to be then due
and payable, provided that the foregoing obligation to pay such
additional amounts shall not apply:
(A) to any payment to any Lender hereunder unless such
Lender is, on the date hereof (or on the date it becomes a
Lender hereunder as provided in Section 11.24(b)) and on the
date of any change in the Applicable Lending Office of such
Lender, either entitled to submit a Form W-8BEN (relating to
such Lender and entitling it to a complete exemption from
withholding on all interest to be received by it hereunder in
respect of the Loans) or Form W-8ECI (relating to all interest
to be received by such Lender hereunder in respect of the
Loans), or
(B) to any U.S. Taxes imposed solely by reason of the
failure by such non-U.S. Person to comply with applicable
certification, information, documentation or other reporting
requirements concerning the nationality, residence, identity or
connections with the United States of America of such non-U.S.
Person if such compliance is required by statute or regulation
of the United States of America as a precondition to relief or
exemption from such U.S. Taxes.
For the purposes hereof, (A) "U.S. PERSON" means a citizen, national or resident
of the United States of America, a corporation, limited liability company,
partnership or other entity created or organized in or under any laws of the
United States of America or any State thereof, or any estate or trust that is
subject to Federal income taxation regardless of the source of its income, (B)
"U.S. TAXES" means any present or future tax, assessment or other charge or levy
imposed by or on behalf of the United States of America or any taxing authority
thereof or therein, (C) "FORM W-8BEN" means Form W-8BEN of the Department of the
Treasury of the United States of America and (D) "FORM W-8ECI" means Form W-8ECI
of the Department of the Treasury of the United States of America. Each of the
Forms referred to in the foregoing clauses (C) and (D) shall include such
successor and related forms as may from time to time be adopted by the relevant
taxing authorities of the United States of America to document a claim to which
such Form relates.
(ii) EVIDENCE OF DEDUCTION, ETC. Within 30 days after
paying any amount to Administrative Agent or any Lender from
which it is required by law to make any deduction or
withholding, and within 30 days after it is required by law
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to remit such deduction or withholding to any relevant taxing or
other authority, Borrower shall deliver to Administrative Agent
for delivery to such non-U.S. Person evidence satisfactory to
such Person of such deduction, withholding or payment (as the
case may be).
(g) REPLACEMENT OF LENDERS. If any Lender requests compensation
pursuant to Section 2.7(a) or Section 2.7(f) or any such Lender
withholds consent when such Lender's consent is required pursuant to the
terms hereof, or any Lender's obligation to Continue Loans of any Type,
or to Convert Loans of any Type into the other Type of Loan, shall be
suspended pursuant to Section 2.7 or Section 2.7(c) (any such Lender
requesting such compensation, or whose obligations are so suspended,
being herein called a "REQUESTING LENDER"), Borrower, upon three
Business Days notice, may require that such Requesting Lender transfer
all of its right, title and interest under this Agreement and such
Requesting Lender's Note to any bank or other financial institution (a
"PROPOSED LENDER") identified by Borrower that is satisfactory to
Administrative Agent (i) if such Proposed Lender agrees to assume all of
the obligations of such Requesting Lender hereunder, and to purchase all
of such Requesting Lender's Loans hereunder for consideration equal to
the aggregate outstanding principal amount of such Requesting Lender's
Loans, together with interest thereon to the date of such purchase (to
the extent not paid by Borrower), and satisfactory arrangements are made
for payment to such Requesting Lender of all other amounts accrued and
payable hereunder to such Requesting Lender as of the date of such
transfer (including any fees accrued hereunder and any amounts that
would be payable under Section 2.7(e) as if all of such Requesting
Lender's Loans were being prepaid in full on such date) and (ii) if such
Requesting Lender has requested compensation pursuant to Section 2.7(a)
or Section 2.7(f), such Proposed Lender's aggregate requested
compensation, if any, pursuant to Section 2.7(a) or Section 2.7(f) with
respect to such Requesting Lender's Loans is lower than that of the
Requesting Lender. Subject to the provisions of Section 11.24(b), such
Proposed Lender shall be a "Lender" for all purposes hereunder. Without
prejudice to the survival of any other agreement of Borrower hereunder,
the agreements of Borrower contained in Section 2.7(a), Section 2.7(f)
and Section 11.5 (without duplication of any payments made to such
Requesting Lender by Borrower or the Proposed Lender) shall survive for
the benefit of such Requesting Lender under this Section 2.7(g) with
respect to the time prior to such replacement.
ARTICLE 3
INSURANCE, CONDEMNATION, AND IMPOUNDS
SECTION 3.1 INSURANCE. Borrower shall maintain insurance as follows:
(a) CASUALTY; BUSINESS INTERRUPTION. Borrower shall keep each
Property insured against damage by fire and the other hazards covered
by a standard extended coverage and all-risk insurance policy for the
full insurable value thereof (without reduction for depreciation or
co-insurance), and shall maintain such other casualty insurance as
reasonably required by Administrative Agent. Borrower shall keep each
Property insured against loss by flood if each Property is located in an
area identified by the Federal
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Emergency Management Agency as an area having special flood hazards and
in which flood insurance has been made available under the National
Flood Insurance Act of 1968 (and any successor act thereto) in an amount
at least equal to the lesser of (1) the maximum amount of the Loans or
(2) the maximum limit of coverage available under said act. Borrower
shall maintain use and occupancy insurance covering, as applicable,
rental income or business interruption, with coverage in an amount not
less than twelve (12)-months anticipated gross rental income or gross
business earnings, as applicable in each case, attributable to each
Property. Borrower shall not maintain any separate or additional
insurance which is contributing in the event of loss unless it is
properly endorsed and otherwise satisfactory to Administrative Agent in
all respects. The proceeds of insurance paid on account of any damage or
destruction to each Property shall be paid to Administrative Agent to be
applied as provided in Section 3.2.
(b) LIABILITY. Borrower shall maintain (1) commercial general
liability insurance with respect to each Property providing for limits
of liability of not less than $5,000,000 for both injury to or death of
a person and for property damage per occurrence, and (2) other liability
insurance as reasonably required by Administrative Agent.
(c) FORM AND QUALITY. All insurance policies shall be endorsed
in form and substance acceptable to Administrative Agent to name
Administrative Agent (on behalf of Lenders) as an additional insured,
loss payee or mortgagee thereunder, as its interest may appear, with
loss payable to Administrative Agent, without contribution, under a
standard New York (or local equivalent) mortgagee clause. All such
insurance policies and endorsements shall be fully paid for and contain
such provisions and expiration dates and be in such form and issued by
such insurance companies licensed to do business in the State, with a
rating of "A-IX" or better as established by Best's Rating Guide (or an
equivalent rating approved in writing by Administrative Agent). Each
policy shall provide that such policy may not be cancelled or materially
changed except upon thirty (30) days' prior written notice of intention
of non-renewal, cancellation or material change to Administrative Agent
and that no act or thing done by Borrower shall invalidate any policy as
against Administrative Agent or any Lender. If Borrower fails to
maintain insurance in compliance with this Section 3.1, Administrative
Agent may - obtain such insurance and pay the premium therefor and
Borrower shall, on demand, reimburse Administrative Agent and the
Lenders for all expenses incurred in connection therewith. Borrower
shall assign the policies or proofs of insurance to Administrative Agent
(on behalf of Lenders), in such manner and form that Administrative
Agent and its successors and assigns shall at all times have and hold
the same as security for the payment of the Loans. Borrower shall
deliver copies of all original policies certified to Administrative
Agent by the insurance company or authorized agent as being true copies,
together with the endorsements required hereunder. The proceeds of
insurance policies coming into the possession of Administrative Agent
shall not be deemed trust funds, and Administrative Agent shall be
entitled to apply such proceeds as herein provided.
(d) ADJUSTMENTS. Borrower shall give immediate written notice of
any loss to the insurance carrier and to Administrative Agent. Borrower
hereby irrevocably authorizes and empowers Administrative Agent, as
attorney-in-fact for Borrower coupled with an interest, to make proof of
loss, to adjust and compromise any claim under insurance
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policies, to appear in and prosecute any action arising from such
insurance policies, to collect and receive insurance proceeds, and to
deduct therefrom Administrative Agent's expenses incurred in the
collection of such proceeds. Nothing contained in this Section 3.1(d),
however, shall require Administrative Agent to incur any expense or take
any action hereunder.
SECTION 3.2 USE AND APPLICATION OF INSURANCE PROCEEDS. Administrative
Agent shall apply insurance proceeds to costs of restoring a Property or the
Loans as follows:
(a) if the loss is less than or equal to the Threshold Amount,
Administrative Agent (on behalf of the Lenders) shall apply the
insurance proceeds to restoration provided (1) no Event of Default or
Potential Default exists, and (2) Borrower promptly commences and is
diligently pursuing restoration of the Property;
(b) if the loss exceeds the Threshold Amount, but is not more
than 25% of the replacement value of the improvements at such Property
(for Properties containing multiple phases or stand alone structures,
such calculation to be based on the damaged phase or structure, not the
Property as a whole), Administrative Agent shall apply the insurance
proceeds to restoration provided that at all times during such
restoration (1) no Event of Default or Potential Default exists; (2)
Administrative Agent determines that there are sufficient funds
available to restore and repair the Property to a condition approved by
Administrative Agent; (3) Administrative Agent determines that the Net
Operating Income of the Portfolio plus the amounts in the Interest
Budget and Interest Budget Reserve and available during restoration will
be sufficient to pay Debt Service during such period; (4) Administrative
Agent determines that restoration and repair of the Property to a
condition approved by Administrative Agent will be completed within six
months after the date of loss or casualty and in any event ninety (90)
days prior to the Maturity Date; and (5) Borrower promptly commences and
is diligently pursuing restoration of the Property;
(c) if the conditions set forth above are not satisfied or the
loss exceeds the maximum amount specified in Section 3.2(b) above, in
Administrative Agent's sole discretion, Administrative Agent may
(subject to the approval of the Majority Lenders) apply any insurance
proceeds it may receive to the payment of the Loans or allow all or a
portion of such proceeds to be used for the restoration of the Property;
and
(d) insurance proceeds applied to restoration will be disbursed
on receipt of satisfactory plans and specifications, contracts and
subcontracts, schedules, budgets, lien waivers and architects'
certificates, and otherwise in accordance with prudent commercial
construction lending practices for construction loan advances,
including, as applicable, the advance conditions under Schedule 2.1.
SECTION 3.3 CONDEMNATION AWARDS. Borrower shall as soon as is reasonably
practical notify Administrative Agent of the institution of any proceeding for
the condemnation or other taking of any Property or any portion thereof.
Administrative Agent may participate in any such proceeding and Borrower will
deliver to Administrative Agent all instruments necessary or required by
Administrative Agent to permit such participation. Without
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Administrative Agent's prior consent (subject to the approval of the Majority
Lenders), Borrower (a) shall not agree to any compensation or award, and (b)
shall not take any action or fail to take any action which would cause the
compensation to be determined. All awards and compensation for the taking or
purchase in lieu of condemnation of any and all Properties or any part thereof
are hereby assigned to and shall be paid to Administrative Agent. Borrower
authorizes Administrative Agent to collect and receive such awards and
compensation, to give proper receipts and acquittances therefor, and in
Administrative Agent's sole discretion (which Administrative Agent shall
exercise at the direction of the Majority Lenders) to apply the same toward the
payment of the Loans, notwithstanding that the Loans may not then be due and
payable, or to the restoration of the Property; however, if the award is less
than or equal to the Threshold Amount and Borrower requests that such proceeds
be used for non-structural site improvements (such as landscape, driveway,
walkway and parking area repairs) required to be made as a result of such
condemnation, Administrative Agent will apply the award to such restoration in
accordance with disbursement procedures applicable to insurance proceeds
provided there exists no Potential Default or Event of Default. Borrower, upon
request by Administrative Agent, shall execute all instruments requested to
confirm the assignment of the awards and compensation to Administrative Agent,
free and clear of all liens, charges or encumbrances.
SECTION 3.4 IMPOUNDS. In the event of an Event of Default, Borrower
shall, upon Lender's request, deposit into a reserve with Administrative Agent
(the "TAX AND INSURANCE ESCROW RESERVE"), monthly, one-twelfth (1/12th) of the
annual charges for ground or other rent, if any, and real estate taxes,
assessments and similar charges and insurance premiums relating to any Property.
Deposits shall be made on the basis of Administrative Agent's estimate from time
to time of the charges for the current year (after giving effect to any
reassessment or, at Administrative Agent's election, on the basis of the charges
for the prior year, with adjustments when the charges are fixed for the then
current year). All funds so deposited shall be held in the Tax and Insurance
Escrow Reserve by Administrative Agent under its sole dominion and control, with
interest, and may be commingled with Administrative Agent's general funds.
Borrower hereby grants to Administrative Agent (on behalf of Lenders) a first
priority security interest in all funds so deposited with Administrative Agent
in the Tax and Insurance Escrow Reserve for the purpose of securing the Loans
and will take all actions necessary to maintain in favor of Administrative Agent
a perfected first priority security interest in the Tax and Insurance Escrow
Reserve, including, without limitation, executing and filing UCC-1 Financing
Statements and continuations thereof and entering into agreements to confirm
Administrative Agent's dominion and control over, and security interest in, the
Tax and Insurance Escrow Reserve. While an Event of Default exists, the funds
deposited in the Tax and Insurance Escrow Reserve may be applied in payment of
the charges for which such funds have been deposited, or to the payment of the
Loans or any other charges affecting the security of Administrative Agent and
the Lenders, as Administrative Agent may elect, but no such application shall be
deemed to have been made by operation of law or otherwise until actually made by
Administrative Agent. Borrower shall furnish Administrative Agent with bills for
the charges for which such deposits are required at least thirty (30) days prior
to the date on which the charges first become payable. If at any time the amount
on deposit with Administrative Agent in the Tax and Insurance Escrow Reserve,
together with amounts to be deposited by Borrower before such charges are
payable, is insufficient to pay such charges, Borrower shall deposit any
deficiency with Administrative Agent in the Tax and Insurance Escrow Reserve
immediately upon demand. Administrative
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Agent shall pay such charges when the amount on deposit with Administrative
Agent in the Tax and Insurance Escrow Reserve is sufficient to pay such charges
and Administrative Agent has received a xxxx for such charges.
ARTICLE 4
ENVIRONMENTAL MATTERS
SECTION 4.1 CERTAIN DEFINITIONS. As used herein, the following terms
have the meanings indicated:
(a) "ENVIRONMENTAL LAWS" means any federal, state or local law
(whether imposed by statute, or administrative or judicial order, or
common law), now or hereafter enacted, governing health, safety,
industrial hygiene, the environment or natural resources, or Hazardous
Materials, including, such laws governing or regulating the use,
generation, storage, removal, recovery, treatment, handling, transport,
disposal, control, discharge of, or exposure to, Hazardous Materials.
(b) "HAZARDOUS MATERIALS" means (1) petroleum or chemical
products, whether in liquid, solid, or gaseous form, or any fraction or
by-product thereof, (2) asbestos or asbestos-containing materials, (3)
polychlorinated biphenyls (PCBs), (4) radon gas, (5) underground storage
tanks, (6) any explosive or radioactive substances, (7) lead or
lead-based paint, or (8) any other substance, material, waste or mixture
which is or shall be listed, defined, or otherwise determined by any
governmental authority to be hazardous, toxic, dangerous or otherwise
regulated, controlled or giving rise to liability under any
Environmental Laws.
SECTION 4.2 REPRESENTATIONS AND WARRANTIES ON ENVIRONMENTAL MATTERS.
Borrower represents and warrants to Administrative Agent and Lenders that, to
Borrower's knowledge, except as set forth in the Site Assessments, (a) no
Hazardous Material is now or was formerly used, stored, generated, manufactured,
installed, treated, discharged, disposed of or otherwise present at or about any
Property or any property adjacent to any Property (except for cleaning and other
products currently used in connection with the routine maintenance or repair of
the Portfolio in full compliance with Environmental Laws), so as to have a
Material Adverse Effect, (b) all material permits, licenses, approvals and
filings required by Environmental Laws have been obtained, and the use,
operation and condition of each Property does not, and did not previously,
violate any Environmental Laws, (c) no civil, criminal or administrative action,
suit, claim, hearing, investigation or proceeding has been brought or been
threatened, nor have any settlements been reached by or with any parties or any
liens imposed in connection with any Property concerning Hazardous Materials or
Environmental Laws, and (d) no underground storage tanks exist at the
Properties.
SECTION 4.3 COVENANTS ON ENVIRONMENTAL MATTERS.
(a) Borrower shall promptly remove such Hazardous Materials and
remediate such Property in full compliance with Environmental Laws and
in accordance with the recommendations and specifications of an
independent environmental consultant approved by Administrative Agent.
Borrower shall (1) comply strictly and in all respects
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with applicable Environmental Laws unless it is not expected to have a
Material Adverse Effect; (2) notify Administrative Agent as promptly as
is reasonably practical upon Borrower's discovery of any spill,
discharge, release or presence of any Hazardous Material at, upon,
under, within, contiguous to or otherwise affecting any Property, unless
such spill, discharge, release or presence is not expected to have a
Material Adverse Effect; (3) promptly forward to Administrative Agent
copies of all orders, notices, permits, applications or other
communications and reports in connection with any spill, discharge,
release or the presence of any Hazardous Material or any other matters
relating to the Environmental Laws or any similar laws or regulations,
as they may affect any portion of the Portfolio or Borrower, unless such
spill, discharge, release, presence or other matter is not expected to
have a Material Adverse Effect; and (4) cause to be delivered a
Hazardous Material indemnity in form and substance satisfactory to
Administrative Agent and the Lenders.
(b) Borrower shall not cause, shall prohibit any other Person
within the control of Borrower from causing, and shall use prudent,
commercially reasonable efforts to prohibit other Persons (including
tenants) from (1) causing any spill, discharge or release, or the use,
storage, generation, manufacture, installation, or disposal, of any
Hazardous Materials at, upon, under, within or about the Portfolio or
any portion thereof or the transportation of any Hazardous Materials to
or from the Portfolio or any portion thereof (except for (i) cleaning
and other products used in connection with routine maintenance or repair
of the Portfolio in full compliance with Environmental Laws, and (ii)
uses consistent with the use of the Property as of the date hereof and
in compliance with Environmental Laws, (2) installing any underground
storage tanks at any Property, or (3) conducting any activity pertaining
to Hazardous Materials that requires a permit or other authorization
under Environmental Laws unless such activity is consistent with the use
of the Property as of the date hereof and in compliance with
Environmental Laws.
(c) Borrower shall provide to Administrative Agent, at
Borrower's expense promptly upon the written request of Administrative
Agent from time to time, a Site Assessment or, if required by
Administrative Agent, an update to any existing Site Assessment, to
assess the presence or absence of any Hazardous Materials and the
potential costs in connection with abatement, cleanup or removal of any
Hazardous Materials found on, under, at or within the Portfolio or any
Property. Borrower shall pay the cost of no more than one such Site
Assessment or update in any twelve (12)-month period, unless
Administrative Agent's request for a Site Assessment is based on
information provided under Section 4.3(a), a reasonable suspicion of
Hazardous Materials at or near any Property, a breach of representations
under Section 4.2, or an Event of Default, in which case any such Site
Assessment or update shall be at Borrower's expense.
SECTION 4.4 ALLOCATION OF RISKS AND INDEMNITY. As between Borrower,
Administrative Agent and Lenders, all risk of loss associated with
non-compliance with Environmental Laws, or with the presence of any Hazardous
Material at, upon, within, contiguous to or otherwise affecting the Portfolio or
any portion thereof, shall lie solely with Borrower unless such non-compliance
is caused by the Administrative Agent or the Lenders or which first exists (as
distinguished from first discovered) after the Administrative Agent causes
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Borrower to be defeased of title to the Property in question by any exercise of
a remedy provided herein after an Event of Default. Accordingly, Borrower shall
bear all risks and costs associated with any loss (including any loss in value
attributable to Hazardous Materials), damage or liability therefrom, including
all costs of removal of Hazardous Materials or other remediation required by
Administrative Agent or by law. Borrower shall indemnify, defend and hold
Administrative Agent and Lenders harmless from and against all loss,
liabilities, damages, claims, costs and expenses (including reasonable costs of
defense) arising out of or associated, in any way, with the non-compliance with
Environmental Laws, or the existence of Hazardous Materials in, on, or about the
Portfolio or any portion thereof, or a breach of any representation, warranty or
covenant contained in this ARTICLE 4, whether based in contract, tort, implied
or express warranty, strict liability, criminal or civil statute or common law,
including those arising from the joint, concurrent, or comparative negligence of
Administrative Agent and the Lenders; however, Borrower shall not be liable
under such indemnification to the extent such loss, liability, damage, claim,
cost or expense results solely from Administrative Agent's or the Lender's gross
negligence or willful misconduct or actions or inactions of Administrative Agent
after Borrower is defeased of title to the Property in question after exercise
of any remedy provided for herein after an Event of Default. Borrower's
obligations under this Section 4.4 shall arise upon the discovery of the
presence of any Hazardous Material, whether or not any governmental authority
has taken or threatened any action in connection with the presence of any
Hazardous Material, and whether or not the existence of any such Hazardous
Material or potential liability on account thereof is disclosed in the Site
Assessment and shall continue notwithstanding the repayment of the Loans or any
transfer or sale of any right, title and interest in the Portfolio or any
portion thereof (by foreclosure, deed in lieu of foreclosure or otherwise).
SECTION 4.5 NO WAIVER. Notwithstanding any provision in this ARTICLE 4
or elsewhere in the Loan Documents, or any rights or remedies granted by the
Loan Documents, Administrative Agent and Lenders do not waive and expressly
reserve all rights and benefits now or hereafter accruing to Administrative
Agent or any of the Lenders under the "security interest" or "secured creditor"
exception under applicable Environmental Laws, as the same may be amended. No
action taken by Administrative Agent or any Lender pursuant to the Loan
Documents shall be deemed or construed to be a waiver or relinquishment of any
such rights or benefits under the "security interest exception."
ARTICLE 5
LEASING MATTERS
SECTION 5.1 REPRESENTATIONS AND WARRANTIES ON LEASES. Borrower
represents and warrants to Administrative Agent and the Lenders with respect to
leases of the Portfolio, or any portion thereof, that: (a) to Borrower's
knowledge, the occupancy reports, income statements, and delinquency reports for
each Property delivered to Administrative Agent is true, correct and complete;
(b) Borrower has not assigned or pledged any of the leases, the rents or any
interests therein except to Administrative Agent (on behalf of Lenders); and (c)
no tenant or other party has an option to purchase all or any portion of any
Property.
SECTION 5.2 STANDARD LEASE FORM; APPROVAL RIGHTS. All leases and other
rental arrangements shall be on a standard lease form approved by Administrative
Agent with no
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material modifications (except as approved by Administrative Agent). Borrower
shall hold, in trust, all tenant security deposits and, to the extent required
by applicable law, shall not commingle any such funds with any other funds of
Borrower. In addition, during any time that Borrower holds $100,000 or more of
tenant security deposits, Borrower shall hold all tenant security deposits in a
segregated account and shall not commingle any such funds with any other funds
of Borrower. Within ten (10) days after Administrative Agent's request, Borrower
shall furnish to Administrative Agent a statement of occupancy reports, income
statements and expenses, and delinquency reports, certified by Borrower as being
true and correct.
SECTION 5.3 COVENANTS. Borrower (a) shall perform the obligations which
Borrower is required to perform under the leases; (b) shall enforce the
obligations to be performed by the tenants under the leases; (c) shall not enter
into any ground lease or master lease of any part of any Property; (d) shall not
further assign or encumber any lease; and (e) shall not, except with
Administrative Agent's prior written consent, modify or amend any lease (except
for minor modifications and amendments entered into in the ordinary course of
business, consistent with prudent property management practices, not affecting
the economic terms of the lease in any material respect), and any action in
violation of clauses (c), (d), and (e) of this Section 5.3 shall be void at the
election of Administrative Agent.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Administrative Agent and Lenders
that:
SECTION 6.1 ORGANIZATION AND POWER. Borrower and each Borrower Party is
duly organized, validly existing and in good standing under the laws of the
state of its formation or existence, and is in compliance with legal
requirements applicable to doing business in the State. Borrower is not a
"foreign person" within the meaning of Section 1445(f)(3) of the Internal
Revenue Code.
SECTION 6.2 VALIDITY OF LOAN DOCUMENTS. The execution, delivery and
performance by Borrower and each Borrower Party of the Loan Documents: (a) are
duly authorized and do not require the consent or approval of any other party or
governmental authority which has not been obtained; and (b) will not violate any
law or result in the imposition of any Lien upon the assets of any such party,
except as contemplated by the Loan Documents. The Loan Documents constitute the
legal, valid and binding obligations of Borrower and each Borrower Party,
enforceable in accordance with their respective terms, subject to applicable
bankruptcy, insolvency, or similar laws generally affecting the enforcement of
creditors' rights.
SECTION 6.3 LIABILITIES; LITIGATION.
(a) The financial statements delivered by Borrower and each
Borrower Party are true, correct and complete with no material adverse
change since the date of preparation. Except as disclosed in such
financial statements, there are no liabilities (fixed or contingent)
affecting the Portfolio, Borrower or any Borrower Party, except for such
liabilities as exist in the ordinary course of business or in connection
with constructing the Improvements. Except as disclosed in Schedule 6.3,
there is no litigation,
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administrative proceeding, investigation or other legal action
(including any proceeding under any state or federal bankruptcy or
insolvency law) pending or, to the knowledge of Borrower, threatened,
against the Portfolio, Borrower or any Borrower Party which if adversely
determined could have a material adverse effect on such party, the
Portfolio, any Property, or the Loans.
(b) Neither Borrower nor any Borrower Party is contemplating
either the filing of a petition by it under state or federal bankruptcy
or insolvency laws or the liquidation of all or a major portion of its
assets or property, and neither Borrower nor any Borrower Party has
knowledge of any Person contemplating the filing of any such petition
against it.
SECTION 6.4 TAXES AND ASSESSMENTS. The Portfolio is comprised of one or
more parcels, each of which constitutes a separate tax lot and none of which
constitutes a portion of any other tax lot. There are no pending or, to
Borrower's best knowledge, proposed, special or other assessments for public
improvements or otherwise affecting any Property, nor are there any contemplated
improvements to any Property that may result in such special or other
assessments.
SECTION 6.5 OTHER AGREEMENTS; DEFAULTS. Neither Borrower nor any
Borrower Party is a party to any agreement or instrument or subject to any court
order, injunction, permit, or restriction which might materially adversely
affect the Portfolio, any Property, or the business, operations, or condition
(financial or otherwise) of Borrower or any Borrower Party. Neither Borrower nor
any Borrower Party is in violation of any agreement which violation would have a
material adverse effect on the Portfolio, any Property, Borrower, or any
Borrower Party or Borrower's or any Borrower Party's business, properties, or
assets, operations or condition, financial or otherwise.
SECTION 6.6 COMPLIANCE WITH LAW.
(a) Except as provided for in the advance conditions hereunder,
Borrower and each Borrower Party have all requisite licenses, permits,
franchises, qualifications, certificates of occupancy (temporary or
permanent) or other governmental authorizations to own, lease and
operate each Property and carry on its business, and each Property is in
compliance with all applicable legal requirements and is free of
structural defects, and all building systems contained therein are in
good working order, subject to ordinary wear and tear;
(b) No condemnation has been commenced or, to Borrower's
knowledge, is contemplated with respect to all or any portion of any
Property or for the relocation of roadways providing access to a
Property; and
(c) Each Property has adequate rights of access to public ways
and is served by adequate water, sewer, sanitary sewer and storm drain
facilities. All public utilities necessary or convenient to the full use
and enjoyment of each Property are located in the public right-of-way
abutting such Property, and all such utilities are connected so as to
serve such Property without passing over other property, except to the
extent such other property is subject to a perpetual easement for such
utility benefiting such Property. All
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roads necessary for the full utilization of each Property for its
current purpose have been completed and dedicated to public use and
accepted by all governmental authorities.
SECTION 6.7 LOCATION OF BORROWER. Borrower's principal place of business
and chief executive offices are located at the address stated in Section 11.1.
SECTION 6.8 ERISA. Borrower has not established any pension plan for
employees which would cause Borrower to be subject to the Employee Retirement
Income Security Act of 1974, as amended.
SECTION 6.9 MARGIN STOCK. No part of proceeds of the Loan will be used
for purchasing or acquiring any "margin stock" within the meaning of Regulations
G, T, U or X of the Board of Governors of the Federal Reserve System.
SECTION 6.10 TAX FILINGS. Borrower and each Borrower Party have filed
(or have obtained effective extensions for filing) all federal, state and local
tax returns required to be filed and have paid or made adequate provision for
the payment of all federal, state and local taxes, charges and assessments
payable by Borrower and each Borrower Party, respectively.
SECTION 6.11 SOLVENCY. Giving effect to the Loans, the fair saleable
value of Borrower's assets exceeds and will, immediately following the making of
the Loans, exceed Borrower's total liabilities, including, without limitation,
subordinated, unliquidated, disputed and contingent liabilities. The fair
saleable value of Borrower's assets is and will, immediately following the
making of the Loans, be greater than Borrower's probable liabilities, including
the maximum amount of its contingent liabilities on its Debts as such Debts
become absolute and matured, Borrower's assets do not and, immediately following
the making of the Loans will not, constitute unreasonably small capital to carry
out its business as conducted or as proposed to be conducted. Borrower does not
intend to, and does not believe that it will, incur Debts and liabilities
(including contingent liabilities and other commitments) beyond its ability to
pay such Debts as they mature (taking into account the timing and amounts of
cash to be received by Borrower and the amounts to be payable on or in respect
of obligations of Borrower).
SECTION 6.12 FULL AND ACCURATE DISCLOSURE. No statement of fact made by
or on behalf of Borrower or any Borrower Party in this Agreement or in any of
the other Loan Documents or in any certificate, statement or questionnaire
delivered by Borrower or any Borrower Party in connection with the Loans
contains any untrue statement of a material fact or omits to state any material
fact necessary to make statements contained herein or therein not misleading.
There is no fact presently known to Borrower or any Borrower Party which has not
been disclosed to Administrative Agent which adversely affects, nor as far as
Borrower can foresee, might adversely affect, any Property or the business,
operations or condition (financial or otherwise) of Borrower or any Borrower
Party.
SECTION 6.13 SINGLE PURPOSE ENTITY. Borrower is and has at all times
since its formation been a Single Purpose Entity.
SECTION 6.14 MANAGEMENT AGREEMENT The day to day management of the
Properties will be performed pursuant to the terms of that certain Management
Services Agreement dated as of even date herewith between Shurgard Storage
Centers, Inc., as manager, and Borrower (the
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"MANAGEMENT AGREEMENT"). The Management Agreement is the only management
agreement in existence with respect to the operation or management of any of the
Properties. The copy of the Management Agreement delivered to Administrative
Agent is a true and correct copy, and such agreement has not been amended or
modified. Neither party to such agreement is in default under such agreement and
the Manager has no defense, offset right or other right to withhold performance
under or terminate such agreement.
SECTION 6.15 NO CONFLICTS. The execution, delivery and performance of
this Agreement and the other Loan Documents by Borrower will not conflict with
or result in a breach of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any lien, charge or
encumbrance (other than pursuant to the Loan Documents) upon any of the property
or assets of Borrower pursuant to the terms of any indenture, mortgage, deed of
trust, loan agreement, operating agreement or other agreement or instrument to
which Borrower is a party or by which any of Borrower's property or assets is
subject, nor will such action result in any violation of the provisions of any
statute or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over Borrower or any of Borrower's properties or
assets, and any consent, approval, authorization, order, registration or
qualification of or with any court or any such regulatory authority or other
governmental agency or body required for the execution, delivery and performance
by Borrower of this Agreement or any other Loan Documents has been obtained and
is in full force and effect.
SECTION 6.16 TITLE. Borrower has good, marketable and insurable title to
each of the Properties, free and clear of all Liens whatsoever, except for the
Permitted Encumbrances and such other Liens as are permitted pursuant to the
Loan Documents. The Mortgage creates (and upon the recordation thereof and of
any related financing statements there will be perfected) (1) a valid Lien on
each of the Property, subject only to Permitted Encumbrances and (2) security
interests in and to, and collateral assignments of, all personality (including
the leases), all in accordance with the terms thereof, in each case subject only
to any applicable Permitted Encumbrances and such other Liens as are permitted
pursuant to the Loan Documents. Except as set forth on Schedule 6.3, there are
no claims for payment for work, labor or materials affecting any of the
Properties which are or may become a Lien prior to, or of equal priority with,
the Liens created by the Loan Documents. None of the Permitted Encumbrances,
individually or in the aggregate, materially and adversely interfere with the
benefits of the security intended to be provided by the Mortgage and this
Agreement, materially and adversely affect the value of the Property or any
portion thereof, impair the use or operations of the Property or any portion
thereof or impair Borrower's ability to pay its obligations in a timely manner.
SECTION 6.17 USE OF PROPERTIES. The Properties are being, and will
continue to be, used exclusively for self storage facilities and other
appurtenant and related uses.
SECTION 6.18 FLOOD ZONE. Except as insured as required by Lender, no
portion of the improvements comprising the Property is located in an area
identified by the Secretary of Housing and Urban Development or any successor
thereto as an area having special flood hazards pursuant to the National Flood
Insurance Act of 1968, the Flood Disaster Protection Act of 1973 or the National
Flood Insurance Act of 1994, as amended, or any successor law.
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SECTION 6.19 INSURANCE. Borrower has obtained and has delivered to
Administrative Agent certified copies of all of the insurance policies for the
Properties reflecting the insurance coverages, amounts and other insurance
requirements set forth in this Agreement. No claims have been made under any
such policy, and to Borrower's Knowledge, no Person, including Borrower, has
done, by act or omission, anything which would impair the coverage of any such
policy.
SECTION 6.20 CERTIFICATE OF OCCUPANCY; LICENSES. Except as provided for
in the advance conditions hereunder, all certifications, permits, licenses and
approvals, including without limitation, certificates of completion and
occupancy permits (temporary or permanent), required for the legal use,
occupancy and operation of the Properties for their intended use as self storage
facilities (collectively, the "LICENSES") have been obtained and are in full
force and effect. Borrower shall keep and maintain all Licenses in full force
and effect. The use being made of the Property is in conformity with any
applicable certificate of occupancy issued for the Property.
SECTION 6.21 PHYSICAL CONDITION. Except as disclosed in the building
condition reports certified to Administrative Agent and delivered in connection
with the initial advance of the Loans or as set forth on Schedule 6.21, the
Properties, including, without limitation, all buildings, improvements, parking
facilities, sidewalks, storm drainage systems, roofs, plumbing systems, HVAC
systems, fire protection systems, electrical systems, equipment, elevators,
exterior sidings and doors, landscaping, irrigation systems and all structural
components, are in good condition, order and repair in all material respects; to
Borrower's Knowledge, there exists no structural or other material defects or
damages in the Properties, whether latent or otherwise, and Borrower has not
received written notice from any insurance company or bonding company of any
defects or inadequacies in the Properties, or any part thereof, which would
adversely affect the insurability of the same or cause the imposition of
extraordinary premiums or charges thereon or of any termination or threatened
termination of any policy of insurance or bond.
SECTION 6.22 BOUNDARIES. Except as shown on the surveys, all of the
Improvements lie wholly within the boundaries and building restriction lines of
each Property, and no improvements on adjoining properties encroach upon any
Property, and no Improvements encroach upon or violate any easements or other
encumbrances upon any Property, so as to materially adversely affect the value
or marketability of such Property, except those which are insured against by
title insurance.
SECTION 6.23 SEPARATE LOTS. Each Property is comprised of one (1) or
more parcels which constitutes one (1) or more separate tax lots and does not
constitute a portion of any other tax lot not a part of such Property.
SECTION 6.24 SURVEY. To Borrower's Knowledge, the survey for each
Property delivered to Administrative Agent in connection with this Agreement
does not fail to reflect any material matter affecting such Property or the
title thereto.
SECTION 6.25 FILING AND RECORDING TAXES. All transfer taxes, deed
stamps, intangible taxes or other amounts in the nature of transfer taxes
required to be paid by any Person under applicable legal requirements currently
in effect in connection with the transfer of each Property
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to Borrower or any transfer of a controlling interest in Borrower have been paid
or will be paid on the date hereof. All mortgage, mortgage recording, stamp,
intangible or other similar tax required to be paid by any Person under
applicable legal requirements currently in effect in connection with the
execution, delivery, recordation, filing, registration, perfection or
enforcement of any of the Loan Documents, including, without limitation, the
Mortgage, have been paid and, under current legal requirements, the Mortgage is
enforceable in accordance with its terms by Administrative Agent or any
subsequent holder thereof (on behalf of the Lenders), subject to applicable
bankruptcy, insolvency, or similar laws generally affecting the enforcement of
creditors' rights.
SECTION 6.26 INVESTMENT COMPANY ACT. Borrower is not (1) an "investment
company" or a company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940, as amended; (2) a "holding
company" or a "subsidiary company" of a "holding company" or an "affiliate" of
either a "holding company" or a "subsidiary company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended; or (3) subject to any
other federal or state law or regulation which purports to restrict or regulate
its ability to borrow money.
ARTICLE 7
FINANCIAL REPORTING
SECTION 7.1 FINANCIAL STATEMENTS.
(a) MONTHLY REPORTS. Within thirty (30) days after the end of
each calendar month, Borrower shall furnish to Administrative Agent a
current (as of the calendar month just ended) balance sheet, a detailed
income statement (showing monthly activity and year-to-date) stating
Operating Revenues, Operating Expenses, operating income and Net Cash
Flow for the calendar month just ended for each Property and the
Portfolio and, as requested by Administrative Agent, and an occupancy
report and delinquency report.
(b) QUARTERLY REPORTS. Within forty-five (45) days after the end
of each calendar quarter, Borrower shall furnish to Administrative Agent
a detailed operating statement (showing quarterly activity and
year-to-date) stating Operating Revenues, Operating Expenses, operating
income and Net Cash Flow for the calendar quarter just ended for each
Property and the Portfolio.
(c) ANNUAL REPORTS. Within ninety (90) days after the end of
each fiscal year of Borrower's operation of the Portfolio, Borrower
shall furnish to Administrative Agent and the Lenders a current (as of
the end of such fiscal year) balance sheet, a detailed operating
statement stating Operating Revenues, Operating Expenses, operating
income and Net Cash Flow for Borrower and for each Property and the
Portfolio, and, if required by Administrative Agent, prepared on a
review basis and certified by an independent public accountant
satisfactory to Administrative Agent.
(d) CERTIFICATION; SUPPORTING DOCUMENTATION. Each such financial
statement shall be in scope and detail satisfactory to - Administrative
Agent and certified by the chief financial representative of Borrower.
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SECTION 7.2 ACCOUNTING PRINCIPLES. All financial statements shall be
prepared in accordance with generally accepted accounting principles applicable
to commercial real estate, consistently applied from year to year.
SECTION 7.3 OTHER INFORMATION. Borrower shall deliver to Administrative
Agent additional information regarding Borrower, its subsidiaries, its business,
any Borrower Party, and the Portfolio within 30 days after Administrative
Agent's reasonable request therefor.
SECTION 7.4 ANNUAL BUDGET. At least thirty (30) days prior to the
commencement of each fiscal year, Borrower will provide to Administrative Agent
and the Lenders its proposed annual operating and capital improvements budget
for such fiscal year for review and approval by Administrative Agent and the
Lenders.
SECTION 7.5 AUDITS. Administrative Agent (on behalf of the Lenders)
shall have the right to choose and appoint a certified public accountant to
perform financial audits as it deems reasonably necessary, at Borrower's
expense. Borrower shall permit Administrative Agent and the Lenders to examine
such records, books and papers of Borrower which reflect upon its financial
condition and the income and expense relative to each Property and the
Portfolio.
ARTICLE 8
COVENANTS
Borrower covenants and agrees with Administrative Agent and the Lenders
as follows:
SECTION 8.1 DUE ON SALE AND ENCUMBRANCE; TRANSFERS OF INTERESTS. Without
the prior written consent of Administrative Agent and the Lenders (to the extent
required under Section 11.2), except as provided in Section 8.1(c) below:
(a) neither Borrower nor any other Person having an ownership or
beneficial interest in Borrower shall (1) directly or indirectly sell,
transfer, convey, mortgage, pledge, or assign any interest in the
Portfolio or any part thereof (including any membership or any other
ownership interest in Borrower); (2) further encumber, alienate, xxxxx x
Xxxx or xxxxx any other interest in the Portfolio or any part thereof
(including any membership or other ownership interest in Borrower),
whether voluntarily or involuntarily; or (3) enter into any easement or
other agreement granting rights in or restricting the use or development
of the Portfolio or any part thereof;
(b) no new general partner, member, or limited partner having
the ability to control the affairs of Borrower shall be admitted to or
created in Borrower (nor shall any existing general partner or member or
controlling limited partner withdraw from Borrower), and no change in
Borrower's organizational documents relating to control over Borrower
and/or the Portfolio or any part thereof shall be effected;
(c) Notwithstanding anything in this Section 8.1 to the
contrary, (i) CCPRE-Storage, LLC and Shurgard, the only members in
Borrower, may transfer membership interests and the ability to control
the affairs of Borrower without the prior written consent of
Administrative Agent if and only if such transfers are made to each
other and
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done pursuant to the terms and conditions of this Agreement and
Borrower's Limited Liability Company Agreement in effect as of the date
hereof and prompt written notice thereof is given to Administrative
Agent; provided, however, that the managing member of Borrower must be
approved by Administrative Agent unless it is an Affiliate of
CCPRE-Storage, LLC or Shurgard, and (ii) any transfer of publicly traded
stock in Shurgard Storage Centers, Inc. in the normal course of business
shall be permitted; and
(d) CCPRE-Storage, LLC may transfer its membership interest in
Borrower to an institutional investor approved in writing by
Administrative Agent, such approval not to be unreasonably withheld or
delayed, and, CCPRE-Storage, LLC may pledge, hypothecate or otherwise
leverage its membership interest in Borrower to secure financing to
CCPRE-Storage, LLC; provided, however, that such financing does not have
an unreasonable adverse effect on Borrower and prompt written notice
thereof is given to Administrative Agent.
As used in this Section 8.1, "transfer" shall include the sale, transfer,
conveyance, mortgage, pledge, or assignment of the legal or beneficial ownership
of (1) the Portfolio or any part thereof, (2) any partnership interest in any
general partner in Borrower that is a partnership, and (3) any voting stock in
any general partner in Borrower that is a corporation; "transfer" shall not
include the leasing of individual units within the Portfolio so long as Borrower
complies with the provisions of the Loan Documents relating to such leasing
activity.
SECTION 8.2 TAXES; CHARGES. Borrower shall pay before any fine, penalty,
interest or cost may be added thereto, and shall not enter into any agreement to
defer, any real estate taxes and assessments, franchise taxes and charges, and
other governmental charges that may become a Lien upon any Property or become
payable during the term of the Loan, and will promptly furnish Administrative
Agent with evidence of such payment; however, Borrower's compliance with Section
3.4 of this Agreement during any time that the impounds for taxes and
assessments are being delivered to Administrative Agent shall, with respect to
payment of such taxes and assessments, be deemed compliance with this Section
8.2. Borrower shall not suffer or permit the joint assessment of any Property
with any other real property constituting a separate tax lot or with any other
real or personal property. Borrower shall pay when due all claims and demands of
mechanics, materialmen, laborers and others which, if unpaid, might result in a
Lien on any Property; however, Borrower may contest the validity of such claims
and demands so long as (a) Borrower notifies Lender that it intends to contest
such claim or demand, (b) Borrower provides Administrative Agent with an
indemnity, bond or other security satisfactory to Administrative Agent
(including an endorsement to Administrative Agent's title insurance policy
insuring against such claim or demand) assuring the discharge of Borrower's
obligations for such claims and demands, including interest and penalties, and
(c) Borrower is diligently contesting the same by appropriate legal proceedings
in good faith and at its own expense and concludes such contest prior to the
tenth (10th) day preceding the earlier to occur of the Maturity Date or the date
on which the affected Property or Properties are scheduled to be sold for
non-payment.
SECTION 8.3 CONTROL; MANAGEMENT. There shall be no change in the
day-to-day control and management of Borrower or Borrower's managing member
without the prior written consent of Administrative Agent, except as set forth
in Section 8.1(c). Borrower shall not terminate, replace or appoint any Property
Manager or terminate or amend any Management
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Agreement or Borrower's Limited Liability Company Agreement without
Administrative Agent's prior written approval; provided, however, that Shurgard
is hereby approved as an acceptable Property Manager. Any change in ownership or
control of the Property Manager shall be cause for Administrative Agent to
reapprove such Property Manager and Management Agreement pertaining thereof.
Each Property Manager shall hold and maintain all necessary licenses,
certifications and permits required by law. Borrower shall fully perform all of
its covenants, agreements and obligations under the Management Agreement.
Without the prior approval of Administrative Agent, Borrower shall not permit or
allow Property Manager to assign, transfer, or delegate its duties and
responsibilities with respect to the Properties or any part thereof. The
Management Agreement and the payment of all fees, costs, expenses and other sums
due thereunder shall be subordinated to the Loans, except that the Property
Manager shall not be required to render services to Administrative Agent after
foreclosure without compensation. Property Manager shall be required to and
shall execute Administrative Agent's standard form of subordination of
management agreement, which agreement shall provide, among other things, that
the Property Manager may be terminated by Administrative Agent, without penalty
or fee, if (A) Property Manager becomes insolvent or bankrupt, or (B) an Event
of Default or a Potential Default occurs.
SECTION 8.4 OPERATION; MAINTENANCE; INSPECTION. Borrower shall observe
and comply (or cause compliance) with all legal requirements applicable to the
ownership, use and operation of each Property. Borrower shall maintain each
Property in good condition and promptly repair any damage or casualty. Borrower
shall permit Administrative Agent and the Lenders and their respective agents,
representatives and employees, upon reasonable prior notice to Borrower, to
inspect each Property and conduct such environmental and engineering studies as
Administrative Agent or Lenders may require, provided such inspections and
studies do not materially interfere with the use and operation of such Property.
SECTION 8.5 TAXES ON SECURITY. Borrower shall pay all taxes, charges,
filing, registration and recording fees, excises and levies payable with respect
to the Notes or the Liens created or secured by the Loan Documents, other than
income, franchise and doing business taxes imposed on Administrative Agent or
any Lender. If there shall be enacted any law (1) deducting the Loans from the
value of the Portfolio or any portion thereof for the purpose of taxation, (2)
affecting any Lien on the any Property, or (3) changing existing laws of
taxation of mortgages, deeds of trust, security deeds, or debts secured by real
property, or changing the manner of collecting any such taxes, Borrower shall
promptly pay to Administrative Agent, on demand, all taxes, costs and charges
for which Administrative Agent or any Lender is or may be liable as a result
thereof; however, if such payment would be prohibited by law or would render the
Loans usurious, then instead of collecting such payment, Administrative Agent
may (and on the request of the Majority Lenders shall) declare all amounts owing
under the Loan Documents to be immediately due and payable.
SECTION 8.6 LEGAL EXISTENCE; NAME, ETC. Borrower and each manager in
Borrower shall preserve and keep in full force and effect its existence as a
Single Purpose Entity, entity status, franchises, rights and privileges under
the laws of the state of its formation, and all qualifications, licenses and
permits applicable to the ownership, use and operation of each Property. Neither
Borrower nor any manager of Borrower shall wind up, liquidate, dissolve,
reorganize, merge, or consolidate with or into, or convey, sell, assign,
transfer, lease, or
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otherwise dispose of all or substantially all of its assets, or acquire all or
substantially all of the assets of the business of any Person. Borrower and each
manager in Borrower shall conduct business only in its own name and shall not
change its name, identity, or organizational structure, or the location of its
chief executive office or principal place of business unless Borrower (a) shall
have obtained the prior written consent of Administrative Agent to such change,
and (b) shall have taken all actions necessary or requested by Administrative
Agent to file or amend any financing statement or continuation statement to
assure perfection and continuation of perfection of security interests under the
Loan Documents. Borrower (and each manager in Borrower), if any, shall maintain
its separateness as an entity, including maintaining separate books, records,
and accounts and observing corporate and limited liability company formalities
independent of any other entity, shall pay its obligations with its own funds
and shall not commingle funds or assets with those of any other entity.
SECTION 8.7 AFFILIATE TRANSACTIONS. Without the prior written consent of
Administrative Agent, which consent shall not be unreasonably withheld,
conditioned or delayed, Borrower shall not engage in any transaction affecting
the Portfolio with an Affiliate of Borrower except those contemplated by the
Management Agreement.
SECTION 8.8 LIMITATION ON OTHER DEBT. Borrower shall not, without the
prior written consent of Administrative Agent and the Majority Lenders, incur
any Debt other than the Loans and trade and operational payables described in
subsection (xv) of the definition of Single Purpose Entity.
SECTION 8.9 FURTHER ASSURANCES. Borrower shall promptly (a) cure any
defects in the execution and delivery of the Loan Documents, and (b) execute and
deliver, or cause to be executed and delivered, all such other documents,
agreements and instruments as Administrative Agent may reasonably request to
further evidence and more fully describe the collateral for the Loans, to
correct any omissions in the Loan Documents, to perfect, protect or preserve any
liens created under any of the Loan Documents, or to make any recordings, file
any notices, or obtain any consents, as may be necessary or appropriate in
connection therewith.
SECTION 8.10 ESTOPPEL CERTIFICATES. Borrower, within ten (10) days after
request, shall furnish to Administrative Agent a written statement, duly
acknowledged, setting forth the amount due on the Loans, the terms of payment of
the Loans, the date to which interest has been paid, whether any offsets or
defenses exist against the Loans and, if any are alleged to exist, the nature
thereof in detail, and such other matters as Administrative Agent reasonably may
request.
SECTION 8.11 NOTICE OF CERTAIN EVENTS. Upon Borrower or a member of
Borrower obtaining knowledge, Borrower shall promptly notify Administrative
Agent of (a) any Potential Default or Event of Default, together with a detailed
statement of the steps being taken to cure such Potential Default or Event of
Default; (b) any notice of default received by Borrower under other obligations
relating to any Property or otherwise material to Borrower's business; and (c)
any threatened or pending legal, judicial or regulatory proceedings, including
any dispute between Borrower and any governmental authority, affecting Borrower
or any Property that could reasonably be expected to have a Material Adverse
Effect.
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SECTION 8.12 INDEMNIFICATION. Borrower shall indemnify, defend and hold
Administrative Agent and Lender harmless from and against any and all losses,
liabilities, claims, damages, expenses, obligations, penalties, actions,
judgments, suits, costs or disbursements of any kind or nature whatsoever,
including the reasonable fees and actual expenses of Lender's counsel, in
connection with (a) any inspection, review or testing of or with respect to the
Portfolio or any one or more Properties or any portion thereof, (b) any
investigative, administrative, mediation, arbitration, or judicial proceeding,
whether or not Lender is designated a party thereto, commenced or threatened at
any time (including after the repayment of the Loans) in any way related to the
execution, delivery or performance of any Loan Document or to the Portfolio or
any one or more Properties or any portion thereof, (c) any proceeding instituted
by any Person claiming a Lien, and (d) any brokerage commissions or finder's
fees claimed by any broker or other party in connection with the Loan, the
Portfolio or any one or more Properties or any portion thereof, or any of the
transactions contemplated in the Loan Documents, including those arising from
the joint, concurrent, or comparative negligence of Administrative Agent or any
Lender, except to the extent any of the foregoing is caused by Administrative
Agent's or any Lender's gross negligence or willful misconduct, in which case
the party to whom the gross negligence or willful misconduct is attributable
(but not any other party) shall not be entitled to the indemnification provided
for hereunder to the extent of such gross negligence or willful misconduct.
SECTION 8.13 PAYMENT FOR LABOR AND MATERIALS. Borrower will promptly pay
when due all bills and costs for labor, materials, and specifically fabricated
materials incurred in connection with the Property and never permit to exist
beyond the due date thereof in respect of the Property or any part thereof any
Lien, even though inferior to the Liens of the Loan Documents, and in any event
never permit to be created or exist in respect of the Property or any part
thereof any other or additional Lien other than the liens or security of the
Loan Documents, except for the Permitted Encumbrances.
SECTION 8.14 ALTERATIONS. Borrower shall obtain Administrative Agent's
prior written consent, which consent shall not be unreasonably withheld or
delayed, to any alterations to any improvements that may have a material adverse
effect on Borrower's financial condition, the use, operation or value of the
Property or the Actual Net Operating Income with respect to the Property, other
than alterations performed in connection with the restoration of the Property
after the occurrence of a casualty in accordance with the terms and provisions
of this Agreement. Notwithstanding anything in this Section to the contrary,
Borrower will not permit the Property located at Brick Township, New Jersey to
be operated as an Industrial Establishment, as that term is defined in N.J.S.A.
13:1K-8.
SECTION 8.15 HANDICAPPED ACCESS.
(a) Borrower (a) agrees that it shall use commercially
reasonable efforts to ensure that the Property shall at all times comply
with the requirements of the Americans with Disabilities Act of 1990,
the Fair Housing Amendments Act of 1988, all state and local laws and
ordinances related to handicapped access and all rules, regulations, and
orders issued pursuant thereto including, without limitation, the
Americans with Disabilities Act Accessibility Guidelines for Buildings
and Facilities as the same may apply to self-storage facilities
(collectively, "ACCESS LAWS") and (b) has no actual knowledge as to the
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Property's non-compliance with any Access Laws where the failure to so
comply could have a material adverse effect on the Property or on
Borrower's ability to repay the Loans in accordance with the terms
hereof.
(b) Notwithstanding any provisions set forth herein or in any
other document regarding Administrative Agent's approval of alterations
of the Property, Borrower shall not alter the Property in any manner
which would materially increase Borrower's responsibilities for
compliance with the applicable Access Laws without the prior written
approval of Administrative Agent. The foregoing shall apply to tenant
improvements constructed by Borrower or by any of its tenants.
Administrative Agent may condition any such approval upon receipt of a
certificate of Access Law compliance from an architect, engineer, or
other person reasonably acceptable to Administrative Agent.
Borrower agrees to give prompt notice to Administrative Agent of the receipt by
Borrower of any written complaints related to violation of any Access Laws with
respect to the Property and of the commencement of any proceedings or
investigations which relate to compliance with applicable Access Laws.
SECTION 8.16 HEDGE INSTRUMENT. Borrower shall purchase and keep in full
force and effect at all times that the Loans remain outstanding an interest rate
hedge (the "HEDGE INSTRUMENT") assuming a notional amount equal to the amount of
the Loans. The Hedge Instrument shall provide for a Libor strike price of not
more than nine percent (9%). The Hedge Instrument shall be in form mutually
acceptable to Administrative Agent, Lenders and Borrower and shall be provided
by a counterparty (the "COUNTERPARTY") that is a financial institution whose
long term unsecured debt obligations are rated at least "AA-" by Standard &
Poor's Ratings Group and Xxxxx'x Investors Services (the "REQUIRED RATING").
Borrower shall not provide the Portfolio, the Property, or a pledge of any
interest in Borrower as security for the Hedge Instrument. The Counterparty must
maintain, and Borrower shall cause the Counterparty to maintain, the Required
Rating during the term of the Loans, including during the term of any extension
option. Borrower shall pledge to Administrative Agent the Hedge Instrument as
additional collateral for the Loan. The Hedge Instrument shall be in effect for
a period equal to the initial term, and as a condition to any extension,
Borrower shall deliver a new interest rate hedge instrument to Lender. Any
modifications, amendments, changes, cancellation or terminations of a Hedge
Instrument shall require the prior written consent of Administrative Agent
ARTICLE 9
EVENTS OF DEFAULT
Each of the following shall constitute an Event of Default under the
Loan:
SECTION 9.1 PAYMENTS. Borrower's failure to pay any regularly scheduled
installment of principal, interest or other amount due under the Loan Documents
(including, without limitation, any fees hereunder) within five (5) days of (and
including) the date when due, or Borrower's failure to pay the Loan at the
Maturity Date, whether by acceleration or otherwise.
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SECTION 9.2 INSURANCE. Borrower's failure to maintain insurance as
required under Section 3.1 of this Agreement.
SECTION 9.3 SINGLE PURPOSE ENTITY. If Borrower or any Borrower Party
breaches its covenant under Section 8.6 with respect to its status as a Single
Purpose Entity.
SECTION 9.4 TAXES. If any of the Taxes are not paid when the same are
due and payable.
SECTION 9.5 SALE, ENCUMBRANCE, ETC. The sale, transfer, conveyance,
pledge, mortgage or assignment of all or any part of the Portfolio, or any
interest therein, or of any interest in Borrower, in violation of Section 8.1 of
this Agreement.
SECTION 9.6 REPRESENTATIONS AND WARRANTIES. Any representation or
warranty made in any Loan Document as to any material fact or issue proves to be
untrue in any material respect when made or deemed made.
SECTION 9.7 OTHER ENCUMBRANCES. Any default under any document or
instrument, other than the Loan Documents, evidencing or creating a Lien on the
Portfolio or any part thereof, beyond applicable notice and cure periods.
SECTION 9.8 INVOLUNTARY BANKRUPTCY OR OTHER PROCEEDING. Commencement of
an involuntary case or other proceeding against Borrower, any Borrower Party or
any other Person having an ownership or security interest in the Portfolio
(each, a "BANKRUPTCY Party") which seeks liquidation, reorganization or other
relief with respect to it or its debts or other liabilities under any
bankruptcy, insolvency or other similar law now or hereafter in effect or seeks
the appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any of its property, and such involuntary case or other
proceeding shall remain undismissed or unstayed for a period of 90 days; or an
order for relief against a Bankruptcy Party shall be entered in any such case
under the Federal Bankruptcy Code.
SECTION 9.9 VOLUNTARY PETITIONS, ETC. Commencement by a Bankruptcy Party
of a voluntary case or other proceeding seeking liquidation, reorganization or
other relief with respect to itself or its Debts or other liabilities under any
bankruptcy, insolvency or other similar law or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official for it or any
of its property, or consent by a Bankruptcy Party to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or the making by a Bankruptcy Party of
a general assignment for the benefit of creditors, or the failure by a
Bankruptcy Party, or the admission by a Bankruptcy Party in writing of its
inability, to pay its debts generally as they become due, or any action by a
Bankruptcy Party to authorize or effect any of the foregoing.
SECTION 9.10 COVENANTS. Borrower's failure to perform or observe any of
the agreements and covenants contained in this Agreement or in any of the other
Loan Documents and not specified above, and the continuance of such failure for
thirty (30) days after notice by Administrative Agent to Borrower; however,
subject to any shorter period for curing any failure by Borrower as specified in
any of the other Loan Documents, Borrower shall have an additional sixty (60)
days to cure such failure if (a) such failure does not involve the failure to
make
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payments on a monetary obligation; (b) such failure cannot reasonably be cured
within thirty (30) days; and (c) Borrower is diligently undertaking to cure such
default.
ARTICLE 10
REMEDIES
SECTION 10.1 REMEDIES - INSOLVENCY EVENTS. Upon the occurrence of any
Event of Default described in Section 9.8 or Section 9.9 the obligations to
advance amounts hereunder shall immediately terminate, and all amounts due under
the Loan Documents immediately shall become due and payable, all without written
notice and without presentment, demand, protest, notice of protest or dishonor,
notice of intent to accelerate the maturity thereof, notice of acceleration of
the maturity thereof, or any other notice of default of any kind, all of which
are hereby expressly waived by Borrower; however, if the Bankruptcy Party under
Section 9.8 or Section 9.9 is other than Borrower, then all amounts due under
the Loan Documents shall become immediately due and payable at Administrative
Agent's election, in Administrative Agent's sole discretion.
SECTION 10.2 REMEDIES - OTHER EVENTS. Except as set forth in Section
10.1 above, while any Event of Default exists, Administrative Agent may (a) by
written notice to Borrower, declare the entire amount of the Loans to be
immediately due and payable without presentment, demand, protest, notice of
protest or dishonor, notice of intent to accelerate the maturity thereof, notice
of acceleration of the maturity thereof, or other notice of default of any kind,
all of which are hereby expressly waived by Borrower, (b) terminate the
obligation, if any, to advance amounts hereunder, and (c) exercise all rights
and remedies therefor under the Loan Documents and at law or in equity.
SECTION 10.3 LENDER'S RIGHT TO PERFORM THE OBLIGATIONS. If Borrower
shall fail, refuse or neglect to make any payment or perform any act required by
the Loan Documents, then while any Event of Default exists, and without notice
to or demand upon Borrower and without waiving or releasing any other right,
remedy or recourse Administrative Agent or any Lender may have because of such
Event of Default, Administrative Agent may (but shall not be obligated to) make
such payment or perform such act for the account of and at the expense of
Borrower, and shall have the right to enter upon the Portfolio or any portion
thereof for such purpose and to take all such action thereon and with respect to
the Portfolio or any portion thereof as it may deem necessary or appropriate. If
Administrative Agent shall elect to pay any sum due with reference to the
Portfolio or any portion thereof, Administrative Agent may do so in reliance on
any xxxx, statement or assessment procured from the appropriate governmental
authority or other issuer thereof without inquiring into the accuracy or
validity thereof. Similarly, in making any payments to protect the security
intended to be created by the Loan Documents, Administrative Agent shall not be
bound to inquire into the validity of any apparent or threatened adverse title,
lien, encumbrance, claim or charge before making an advance for the purpose of
preventing or removing the same. Additionally, if any Hazardous Materials affect
or threaten to affect the Portfolio or any portion thereof, Administrative Agent
may (but shall not be obligated to) give such notices and take such actions as
it deems necessary or advisable in order to xxxxx the discharge of any Hazardous
Materials or remove the Hazardous Materials. Borrower shall indemnify, defend
and hold Administrative Agent and the Lenders harmless from and
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against any and all losses, liabilities, claims, damages, expenses, obligations,
penalties, actions, judgments, suits, costs or disbursements of any kind or
nature whatsoever, including reasonable attorneys' fees, incurred or accruing by
reason of any acts performed by Administrative Agent or any Lender pursuant to
the provisions of this Section 10.3, including those arising from the joint,
concurrent, or comparative negligence of Administrative Agent or any Lender,
except as a result of Administrative Agent's or any Lender's gross negligence or
willful misconduct. All sums paid by Administrative Agent pursuant to this
Section 10.3, and all other sums expended by Administrative Agent or any Lender
to which it shall be entitled to be indemnified, together with interest thereon
at the Default Rate from the date of such payment or expenditure until paid,
shall constitute additions to the Loans, shall be secured by the Loan Documents
and shall be paid by Borrower to Administrative Agent upon demand.
ARTICLE 11
MISCELLANEOUS
SECTION 11.1 NOTICES. Any notice required or permitted to be given under
this Agreement shall be in writing and shall be (a) mailed by certified mail,
postage prepaid, return receipt requested, (b) sent by overnight air courier
service, or personally delivered to a representative of the receiving party, (c)
sent by telecopy (provided an identical notice is also sent simultaneously by
mail, overnight courier, or (d) personal delivery as otherwise provided in this
Section 11.1) to the intended recipient at the "Address for Notices" specified
below:
If to Borrower: CCP/Shurgard Venture, LLC
c/o Shurgard Storage Centers, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer and
General Counsel
Telecopy: (000) 000-0000
with copy to: CCPRE-Storage, LLC
x/x Xxxxx Xxxxxxx Xxxxxxxx
0000 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
and copy to: X'Xxxxxxxx Graev & Karabell, LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:Xxxxxx X. Xxxxxx, Esq.
Telecopy: (000) 000-0000
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If to Lender: General Electric Capital Corporation
000 Xxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Region Manager,
Portfolio Management Operations
Telecopy: (000) 000-0000
with copy to: King & Spalding
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Telecopy: (000) 000-0000
Any communication so addressed and mailed shall be deemed to be given on the
earliest of (a) when actually delivered, (b) on the first Business Day after
deposit with an overnight air courier service, or (c) on the third Business Day
after deposit in the United States mail, postage prepaid, in each case to the
address of the intended addressee (except as otherwise provided in the
Mortgage), and any communication so delivered in person shall be deemed to be
given when receipted for by, or actually received by Administrative Agent or
Borrower, as the case may be. If given by telecopy, a notice shall be deemed
given and received when the telecopy is transmitted to the party's telecopy
number specified above, and confirmation of complete receipt is received by the
transmitting party during normal business hours or on the next Business Day if
not confirmed during normal business hours, and an identical notice is also sent
simultaneously by mail, overnight courier, or personal delivery as otherwise
provided in this Section 11.1. Either party may designate a change of address by
written notice to the other by giving at least ten (10) days prior written
notice of such change of address.
SECTION 11.2 AMENDMENTS, WAIVERS, ETC.
(a) Subject to any consents required pursuant to this Section
11.2 and any other provisions of this Agreement (including, without
limitation, Section 2.3(e)), and any other Loan Document which expressly
require the consent, approval or authorization of the Majority Lenders,
this Agreement and any other Loan Document may be modified or
supplemented only by an instrument in writing signed by Borrower and
Administrative Agent; provided that, Administrative Agent may (without
any Lender's consent) give or withhold its agreement to any amendments
of the Loan Documents or any waivers or consents in respect thereof or
exercise or refrain from exercising any other rights or remedies which
Administrative Agent may have under the Loan Documents or otherwise
provided that such actions do not, in Administrative Agent's judgment
reasonably exercised, materially adversely affect the value of any
collateral, taken as a whole, or represent a departure from
Administrative Agent's standard of care described in Section 13.5 (and
the assignment or granting of a participation by GECC shall not limit or
otherwise affect its discretion in respect of any of the foregoing),
except that Administrative Agent will not, without the consent of each
Lender, agree to the following
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(provided that no Lender's consent shall be required for any of the
following which are otherwise required or contemplated under the Loan
Documents): (a) reduce the principal amount of the Loans or reduce the
interest rate thereon; (b) extend any stated payment date for principal
of or interest on the Loans payable to such Lender; (c) release
Borrower, any Guarantor or any other party from liability under the Loan
Documents (except for any assigning Lender pursuant to Section 11.24 and
any resigning Administrative Agent pursuant to Section 13.8); (d)
release or subordinate in whole or in part any material portion of the
collateral given as security for the Loans; (e) modify any of the
provisions of this Section, the definition of "Majority Lenders" or any
other provision in the Loan Documents specifying the number or
percentage of Lenders required to waive, amend or modify any rights
thereunder or make any determination or grant any consent thereunder;
(f) modify the terms of any Event of Default; or (g) consent to (i) the
sale, transfer or encumbrance of any portion of the Property (or any
interest therein) or any direct or indirect ownership interest therein
and (ii) the incurrence by Borrower of any additional indebtedness
secured by the Property, in each case to the extent (and subject to any
standard of reasonability) such consent is required under the Loan
Documents.
(b) Notwithstanding anything to contrary contained in this
Agreement, any modification or supplement of Article 13, or of any of
the rights or duties of Administrative Agent hereunder, shall require
the consent of Administrative Agent.
SECTION 11.3 LIMITATION ON INTEREST. It is the intention of the parties
hereto to conform strictly to applicable usury laws. Accordingly, all agreements
between Borrower, Administrative Agent and the Lenders with respect to the Loans
are hereby expressly limited so that in no event, whether by reason of
acceleration of maturity or otherwise, shall the amount paid or agreed to be
paid to Administrative Agent or any Lender or charged by any Lender for the use,
forbearance or detention of the money to be lent hereunder or otherwise, exceed
the maximum amount allowed by law. If the Loans would be usurious under
applicable law (including the laws of the State and the laws of the United
States of America), then, notwithstanding anything to the contrary in the Loan
Documents: (1) the aggregate of all consideration which constitutes interest
under applicable law that is contracted for, taken, reserved, charged or
received under the Loan Documents shall under no circumstances exceed the
maximum amount of interest allowed by applicable law, and any excess shall be
credited on the Notes by the holders thereof (or, if the Notes have been paid in
full, refunded to Borrower); and (2) if maturity is accelerated by reason of an
election by Administrative Agent in accordance with the terms hereof, or in the
event of any prepayment, then any consideration which constitutes interest may
never include more than the maximum amount allowed by applicable law. In such
case, excess interest, if any, provided for in the Loan Documents or otherwise,
to the extent permitted by applicable law, shall be amortized, prorated,
allocated and spread from the date of advance until payment in full so that the
actual rate of interest is uniform through the term hereof. If such
amortization, proration, allocation and spreading is not permitted under
applicable law, then such excess interest shall be cancelled automatically as of
the date of such acceleration or prepayment and, if theretofore paid, shall be
credited on the Notes (or, if the Notes have been paid in full, refunded to
Borrower). The terms and provisions of this Section 11.3 shall control and
supersede every other provision of the Loan Documents. The Loan Documents are
contracts made under and shall be construed in accordance with and governed by
the laws of the State, except that if at any time the laws of
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the United States of America permit the Lenders to contract for, take, reserve,
charge or receive a higher rate of interest than is allowed by the laws of the
State (whether such federal laws directly so provide or refer to the law of any
state), then such federal laws shall to such extent govern as to the rate of
interest which the Lenders may contract for, take, reserve, charge or receive
under the Loan Documents.
SECTION 11.4 INVALID PROVISIONS. If any provision of any Loan Document
is held to be illegal, invalid or unenforceable, such provision shall be fully
severable; the Loan Documents shall be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part thereof;
the remaining provisions thereof shall remain in full effect and shall not be
affected by the illegal, invalid, or unenforceable provision or by its severance
therefrom; and in lieu of such illegal, invalid or unenforceable provision there
shall be added automatically as a part of such Loan Document a provision as
similar in terms to such illegal, invalid or unenforceable provision as may be
possible to be legal, valid and enforceable.
SECTION 11.5 REIMBURSEMENT OF EXPENSES. Borrower shall pay or reimburse
Administrative Agent and/or the Lenders on demand of the applicable party for:
(1) all expenses incurred by Administrative Agent in connection with the Loans,
including fees and expenses of Administrative Agent's attorneys, environmental,
engineering and other consultants, and fees, charges or taxes for the
negotiation, recording or filing of Loan Documents, (2) all expenses of
Administrative Agent in connection with the administration of the Loans,
including audit costs, inspection fees, settlement of condemnation and casualty
awards, and premiums for title insurance and endorsements thereto, (3) all of
Administrative Agents reasonable costs and expenses (including reasonable fees
and disbursements of Administrative Agent's external counsel) incurred in
connection with the syndication of the Loans to the Lenders, and (4)
Administrative Agent and the Lenders for all amounts expended, advanced or
incurred by Administrative Agent and the Lenders to collect the Notes, or to
enforce the rights of Administrative Agent and the Lenders under this Agreement
or any other Loan Document, or to defend or assert the rights and claims of
Administrative Agent and the Lenders under the Loan Documents or with respect to
the Property (by litigation or other proceedings), which amounts will include
all court costs, attorneys' fees and expenses, fees of auditors and accountants,
and investigation expenses as may be incurred by Administrative Agent and the
Lenders in connection with any such matters (whether or not litigation is
instituted), together with interest at the Default Rate on each such amount from
the date of disbursement until the date of reimbursement to Administrative Agent
and the Lenders, all of which shall constitute part of the Loans and shall be
secured by the Loan Documents.
SECTION 11.6 APPROVALS; THIRD PARTIES; CONDITIONS. All approval rights
retained or exercised by Administrative Agent and the Lenders with respect to
leases, contracts, plans, studies and other matters are solely to facilitate the
Lenders' credit underwriting, and shall not be deemed or construed as a
determination that the Lenders have passed on the adequacy thereof for any other
purpose and may not be relied upon by Borrower or any other Person. This
Agreement is for the sole and exclusive use of Administrative Agent, the Lenders
and Borrower and may not be enforced, nor relied upon, by any Person other than
Administrative Agent, the Lenders and Borrower. All conditions of the
obligations of Administrative Agent and the Lenders hereunder, including the
obligation to make advances, are imposed solely and exclusively for the benefit
of Administrative Agent and the Lenders, their successors and assigns, and no
other Person shall
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have standing to require satisfaction of such conditions or be entitled to
assume that the Lenders will refuse to make advances in the absence of strict
compliance with any or all of such conditions, and no other Person shall, under
any circumstances, be deemed to be a beneficiary of such conditions, any and all
of which may be freely waived in whole or in part by Administrative Agent and
the Lenders at any time in their sole discretion.
SECTION 11.7 LENDERS AND ADMINISTRATIVE AGENT NOT IN CONTROL; NO
PARTNERSHIP. None of the covenants or other provisions contained in this
Agreement shall, or shall be deemed to, give Administrative Agent or any Lender
the right or power to exercise control over the affairs or management of
Borrower, the power of Administrative Agent and the Lenders being limited to the
rights to exercise the remedies referred to in the Loan Documents. The
relationship between Borrower, Administrative Agent and Lender is, and at all
times shall remain, solely that of debtor and creditor. No covenant or provision
of the Loan Documents is intended, nor shall it be deemed or construed, to
create a partnership, joint venture, agency or common interest in profits or
income among Administrative Agent, Lenders and Borrower, or any of them, or to
create an equity in the Portfolio or any portion thereof in Administrative Agent
or any Lender. Neither Administrative Agent nor any Lender undertakes or assumes
any responsibility or duty to Borrower or to any other person with respect to
the Portfolio or any portion thereof or the Loans, except as expressly provided
in the Loan Documents; and notwithstanding any other provision of the Loan
Documents: (a) neither Administrative Agent nor any Lender are, or shall be
construed as, a partner, joint venturer, alter ego, manager, controlling person
or other business associate or participant of any kind of Borrower or its
stockholders, members, or partners and neither Administrative Agent nor any
Lender intends to ever assume such status; (b) neither Administrative Agent nor
any Lender shall be liable for any Debts, expenses or losses incurred or
sustained by Borrower; and (c) neither Administrative Agent nor any Lender shall
be deemed responsible for or a participant in any acts, omissions or decisions
of Borrower or its stockholders, members, or partners. Administrative Agent, the
Lenders and Borrower disclaim any intention to create any partnership, joint
venture, agency or common interest in profits or income among Administrative
Agent, Lenders and Borrower, or any of them, or to create an equity in the
Portfolio or any portion thereof in Administrative Agent or any Lender, or any
sharing of liabilities, losses, costs or expenses.
SECTION 11.8 TIME OF THE ESSENCE. Time is of the essence with respect to
this Agreement.
SECTION 11.9 SUCCESSORS AND ASSIGNS; SECONDARY MARKET TRANSACTIONS.
(a) Subject to the provisions of Section 11.24, this Agreement
shall be binding upon and inure to the benefit of Administrative Agent,
the Lenders and Borrower and the respective successors and permitted
assigns.
(b) Borrower acknowledges that Administrative Agent and each
Lender and its respective successors and assigns may without notice to
or consent from Borrower (a) sell this Agreement, the Mortgage, the
Notes, the other Loan Documents, and any and all servicing rights
thereto, or any portions thereof, to one or more investors, (b)
participate and/or syndicate the Loans to one or more investors, (c)
deposit this Agreement, the Notes and the other Loan Documents, or any
portions thereof, with a trust, which trust
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may sell certificates to investors evidencing an ownership interest in
the trust assets, or (d) otherwise sell, transfer or assign the Loans or
interests therein in one or more transactions to investors (the
transactions referred to in clauses (a) through (d) are hereinafter each
referred to as a "SECONDARY MARKET TRANSACTION"). Borrower shall
reasonably cooperate with Administrative Agent and each Lender in
effecting any such - Secondary Market Transaction and shall reasonably
cooperate and use all reasonable efforts to satisfy the market standards
to which Administrative Agent and each Lender customarily adheres or
which may be reasonably required by any participant, investor, purchaser
or any rating agency involved in any Secondary Market Transaction
(including, without limitation, delivery of opinions of counsel in form
and substance similar to the opinions of counsel delivered to
Administrative Agent on the date hereof and, if requested by
Administrative Agent, a substantive non-consolidation opinion reasonably
acceptable to Administrative Agent to be delivered in a reasonable
period of time after such request in a form and containing such
opinions, assumptions and qualifications as are then typical in such
opinions for Secondary Market Transactions). Borrower shall provide such
information and documents relating to Borrower and the Property as
Administrative Agent and each Lender may reasonably request in
connection with such Secondary Market Transaction. In addition, Borrower
shall make available to Administrative Agent and the Lenders all
information concerning the Property, its business and operations that
Administrative Agent and the Lenders may reasonably request.
Administrative Agent and the Lenders shall be permitted to share all
information with the participants, investors, purchasers, investment
banking firms, rating agencies, accounting firms, law firms and
third-party advisory firms involved with the Loans and Loan Documents or
the applicable Secondary Market Transaction. Administrative Agent and
the Lenders and all of the aforesaid participants, investors,
purchasers, advisors, rating agencies and professional firms shall be
entitled to rely on the information supplied by or on behalf of
Borrower. Borrower also agrees to execute any amendment of or supplement
to this Agreement and the other Loan Documents as Administrative Agent
and the Lenders may reasonably request in connection with any Secondary
Market Transaction, provided that such amendment or supplement does not
change the economic terms of the Loans.
(c) The Notes may hereafter be split, severed and subdivided, by
in substitution for promissory notes of lesser denominations or
otherwise, and, in such event, Borrower shall promptly execute
additional or replacement Notes.
SECTION 11.10 RENEWAL, EXTENSION OR REARRANGEMENT. All provisions of the
Loan Documents shall apply with equal effect to each and all promissory notes
and amendments thereof hereinafter executed which in whole or in part represent
a renewal, extension, increase or rearrangement of the Loans. For portfolio
management purposes, Lenders may elect to divide the Loans into two or more
separate loans evidenced by separate promissory notes so long as the payment and
other obligations of Borrower are not effectively increased or otherwise
modified. Borrower agrees to cooperate with Administrative Agent and the Lenders
and to execute such documents as Administrative Agent reasonably may request to
effect such division of the Loans.
SECTION 11.11 WAIVERS. No course of dealing on the part of
Administrative Agent and the Lenders, its officers, employees, consultants or
agents, nor any failure or delay by
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Administrative Agent or any Lender with respect to exercising any right, power
or privilege of Administrative Agent or any Lender under any of the Loan
Documents, shall operate as a waiver thereof.
SECTION 11.12 CUMULATIVE RIGHTS. Rights and remedies of Administrative
Agent and the Lenders under the Loan Documents shall be cumulative, and the
exercise or partial exercise of any such right or remedy shall not preclude the
exercise of any other right or remedy.
SECTION 11.13 SINGULAR AND PLURAL. Words used in this Agreement and the
other Loan Documents in the singular, where the context so permits, shall be
deemed to include the plural and vice versa. The definitions of words in the
singular in this Agreement and the other Loan Documents shall apply to such
words when used in the plural where the context so permits and vice versa.
SECTION 11.14 PHRASES. When used in this Agreement and the other Loan
Documents, (i) the phrase "including" shall mean "including, but not limited
to," (ii) the phrases "satisfactory to any Lender" or "satisfactory to
Administrative Agent" shall mean, except as otherwise expressly provided herein,
in form and substance satisfactory to such Lender or Administrative Agent, as
the case may be, in all respects, (iii) the phrases "with Lender's consent",
"with Lender's approval", "with Administrative Agent's consent" or "with
Administrative Agent's approval" shall mean, except as otherwise expressly
provided herein, such consent or approval at Lender's or Administrative Agent's,
as the case may be, discretion, and (iv) the phrases "acceptable to Lender" or
"acceptable to Administrative Agent" shall mean, except as otherwise expressly
provided herein, acceptable to Lender or Administrative Agent, as the case may
be, at such party's sole discretion."
SECTION 11.15 EXHIBITS AND SCHEDULES. The exhibits and schedules
attached to this Agreement are incorporated herein and shall be considered a
part of this Agreement for the purposes stated herein.
SECTION 11.16 TITLES OF ARTICLES, SECTIONS AND SUBSECTIONS. All titles
or headings to articles, sections, subsections or other divisions of this
Agreement and the other Loan Documents or the exhibits hereto and thereto are
only for the convenience of the parties and shall not be construed to have any
effect or meaning with respect to the other content of such articles, sections,
subsections or other divisions, such other content being controlling as to the
agreement between the parties hereto.
SECTION 11.17 PROMOTIONAL MATERIAL. Subject to the limitations of
Section 11.25 below, Borrower authorizes Administrative Agent and each of the
Lenders to issue press releases, advertisements and other promotional materials
in connection with Administrative Agent's or such Lender's own promotional and
marketing activities, and describing the Loans in general terms or in detail and
Administrative Agent's or such Lender's participation in the Loans. All
references to Administrative Agent or any Lender contained in any press release,
advertisement or promotional material issued by Borrower shall be approved in
writing by Administrative Agent and such Lender in advance of issuance.
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SECTION 11.18 SURVIVAL. All of the representations, warranties,
covenants, and indemnities of Borrower hereunder (including environmental
matters under Article 4, the obligations under Section 2.7(a), Section 2.7(e)
and Section 2.7(f)), and under the indemnification provisions of the other Loan
Documents shall survive (a) the repayment in full of the Loans and the release
of the Liens evidencing or securing the Loans, (b) the transfer (by sale,
foreclosure, conveyance in lieu of foreclosure or otherwise) of any or all
right, title and interest in and to the Property to any party, whether or not an
Affiliate of Borrower and (c) in the case of any Lender that may assign any
interest in its Commitment or Loans hereunder in accordance with the terms of
this Agreement, the making of such assignment, notwithstanding that such
assigning Lender may cease to be a "Lender" hereunder.
SECTION 11.19 Waiver of Jury Trial. TO THE MAXIMUM EXTENT PERMITTED BY
LAW, BORROWER, ADMINISTRATIVE AGENT AND EACH LENDER HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTION OF EITHER PARTY OR ANY
EXERCISE BY ANY PARTY OF THEIR RESPECTIVE RIGHTS UNDER THE LOAN DOCUMENTS OR IN
ANY WAY RELATING TO THE LOANS OR THE PROPERTY (INCLUDING, WITHOUT LIMITATION,
ANY ACTION TO RESCIND OR CANCEL THIS AGREEMENT, AND ANY CLAIM OR DEFENSE
ASSERTING THAT THIS AGREEMENT WAS FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR
VOIDABLE). THIS WAIVER IS A MATERIAL INDUCEMENT FOR ADMINISTRATIVE AGENT AND
EACH LENDER TO ENTER THIS AGREEMENT.
SECTION 11.20 WAIVER OF PUNITIVE OR CONSEQUENTIAL DAMAGES. None of
Administrative Agent, Lender or Borrower shall be responsible or liable to the
other or to any other Person for any punitive, exemplary or consequential
damages which may be alleged as a result of the Loans or the transaction
contemplated hereby, including any breach or other default by any party hereto.
SECTION 11.21 GOVERNING LAW.
(a) THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, AND
MADE BY ADMINISTRATIVE AGENT AND LENDERS AND ACCEPTED BY BORROWER IN THE
STATE OF NEW YORK, AND THE PROCEEDS OF THE NOTES DELIVERED PURSUANT
HERETO WERE DISBURSED FROM THE STATE OF NEW YORK, WHICH STATE THE
PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE
UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING,
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE
OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND
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PERFORMED IN SUCH STATE AND ANY APPLICABLE LAW OF THE UNITED STATES OF
AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION,
PERFECTION, AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS CREATED
PURSUANT HERETO AND PURSUANT TO THE OTHER LOAN DOCUMENTS SHALL BE
GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE
PROPERTY IS LOCATED, IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT
PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE STATE OF NEW YORK
SHALL GOVERN THE CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF ALL LOAN
DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. TO
THE FULLEST EXTENT PERMITTED BY LAW, EACH OF BORROWER, ADMINISTRATIVE
AGENT AND EACH LENDER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY
CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS
AGREEMENT AND THE NOTES, AND THIS AGREEMENT AND THE NOTES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS
LAW.
(b) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST ADMINISTRATIVE
AGENT, ANY LENDER OR BORROWER ARISING OUT OF OR RELATING TO THE LOAN
DOCUMENTS MAY AT ADMINISTRATIVE AGENT'S OPTION (WHICH DECISION SHALL BE
MADE BY THE MAJORITY LENDERS) BE INSTITUTED IN ANY FEDERAL OR STATE
COURT IN XXX XXXX XX XXX XXXX, XXXXXX XX XXX XXXX, PURSUANT TO SECTION
5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND BORROWER WAIVES ANY
OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR
FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND
BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH
COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE
AND APPOINT CT CORPORATE SYSTEM WITH OFFICES AS OF THE DATE OF THIS
AGREEMENT AT 000 XXXXXX XXXXXX, XXX XXXX, XXX XXXX 00000 AS ITS
AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY
AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR
PROCEEDING IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND
AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND
WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO BORROWER IN THE
MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE
SERVICE OF PROCESS UPON BORROWER, IN ANY SUCH SUIT, ACTION OR PROCEEDING
IN THE STATE OF NEW YORK. BORROWER (A) SHALL GIVE PROMPT NOTICE TO
ADMINISTRATIVE AGENT OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT
HEREUNDER, (B) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A
SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH
SUBSTITUTE AGENT AND OFFICE SHALL
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BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (C)
SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT
CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT
LEAVING A SUCCESSOR.
SECTION 11.22 ENTIRE AGREEMENT. This Agreement and the other Loan
Documents embody the entire agreement and understanding between Administrative
Agent, the Lenders and Borrower and supersede all prior agreements and
understandings between such parties relating to the subject matter hereof and
thereof. Accordingly, the Loan Documents may not be contradicted by evidence of
prior, contemporaneous, or subsequent oral agreements of the parties. There are
no unwritten oral agreements between the parties. If any conflict or
inconsistency exists between the Commitment Letter and this Agreement or any of
the other Loan Documents, the terms of this Agreement and the other Loan
Documents shall control.
SECTION 11.23 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall constitute an original, but all of which shall
constitute one document.
SECTION 11.24 ASSIGNMENTS AND PARTICIPATIONS.
(a) ASSIGNMENTS BY BORROWER. Borrower may not assign any of its
rights or obligations hereunder or under the Notes without the prior
consent of all of the Lenders and Administrative Agent.
(b) ASSIGNMENTS BY THE LENDERS. Each Lender may assign any of
its Loans, its Note and its Commitment (but only with the consent of
Administrative Agent); provided that:
(i) no such consent by Administrative Agent shall be
required in the case of any assignment by any Lender to another
Lender or an affiliate of such Lender or such other Lender;
(ii) except to the extent Administrative Agent shall
otherwise consent, any such partial assignment (other than to
another Lender or an affiliate of a Lender) shall be in an
amount at least equal to $10,000,000;
(iii) each such assignment (including an assignment to
another Lender or an affiliate of a Lender) by a Lender of its
Loans or Commitment shall be made in such manner so that the
same portion of its Loans and Commitment is assigned to the
respective assignee;
(iv) subject to the applicable Lender's compliance with
the provisions of clauses (b) and (c) above, Administrative
Agent's consent to an assignment shall not be unreasonably
withheld, delayed or conditioned if (i) in the reasonable
judgment of Administrative Agent, such assignment is made to a
reputable institutional investor with substantial experience in
real estate lending and originating mortgage loans similar to
the Loans, and a financial net worth of at least $100,000,000,
(ii) such assignment is first offered to Administrative Agent
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in accordance with the terms and conditions a separate agency
agreement among Administrative Agent and the Lenders, and (iii)
the provisions of clause (e) have been satisfied; and
(v) upon execution and delivery by the assignee (even if
already a Lender) to Borrower and Administrative Agent of an
Assignment and Acceptance pursuant to which such assignee agrees
to become a "Lender" hereunder (if not already a Lender) having
the Commitment and Loans specified in such instrument, and upon
consent thereto by Administrative Agent to the extent required
above, the assignee shall have, to the extent of such assignment
(unless otherwise consented to by Administrative Agent), the
obligations, rights and benefits of a Lender hereunder holding
the Commitment and Loans (or portions thereof) assigned to it
(in addition to the Commitment and Loans, if any, theretofore
held by such assignee) and the assigning Lender shall, to the
extent of such assignment, be released from the Commitment (or
portion thereof) so assigned. Upon each such assignment the
assigning Lender shall pay Administrative Agent a processing and
recording fee of $3,500 and the reasonable fees and
disbursements of Administrative Agent's counsel incurred in
connection therewith.
(c) PARTICIPATIONS. A Lender may sell or agree to sell to one or
more other Persons (each a "PARTICIPANT") a participation in all or
any part of any Loans held by it, or in its Commitment, provided that
such Participant shall not have any rights or obligations under this
Agreement or any Note or any other Loan Document (the Participant's
rights against such Lender in respect of such participation to be those
set forth in the agreements executed by such Lender and the applicable
Participant). All amounts payable by Borrower to any Lender under
Section 2.7 in respect of Loans held by it and its - Commitment shall be
determined as if such Lender had not sold or agreed to sell any
participations in such Loans and Commitment, and as if such Lender were
funding each of such Loans and Commitment in the same way that it is
funding the portion of such Loans and Commitment in which no
participations have been sold. In no event shall a Lender that sells a
participation agree with the Participant to take or refrain from taking
any action hereunder or under any other Loan Document except that such
Lender may agree with the Participant that it will not, without the
consent of the Participant, agree to (i) increase or extend the term of
such Lender's Commitment, (ii) extend the date fixed for the payment of
principal of or interest on the related Loan or Loans or any portion of
any fee hereunder payable to the Participant, (iii) reduce the amount of
any such payment of principal, (iv) reduce the rate at which interest is
payable thereon, or any fee hereunder payable to the Participant, to a
level below the rate at which the Participant is entitled to receive
such interest or fee or (v) consent to any modification, supplement or
waiver hereof or of any of the other Loan Documents to the extent that
the same, under Section 11.2, requires the consent of each Lender.
(d) CERTAIN PLEDGES. In addition to the assignments and
participations permitted under the foregoing provisions of this Section
11.24 (but without being subject thereto), any Lender may (without
notice to Borrower, Administrative Agent or any other Lender and without
payment of any fee) assign and pledge all or any portion of its Loans
and its
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Note to any Federal Reserve Bank as collateral security pursuant to
Regulation A and any operating circular issued by such Federal Reserve
Bank, and such Loans and Note shall be fully transferable as provided
therein. No such assignment shall release the assigning Lender from its
obligations hereunder.
(e) PROVISION OF INFORMATION TO ASSIGNEES AND PARTICIPANTS. A
Lender may furnish any information concerning Borrower or any of its
Affiliates in the possession of such Lender from time to time to
assignees and participants (including prospective assignees and
participants).
(f) NO ASSIGNMENTS TO BORROWER OR AFFILIATES. Anything in this
Section 11.24 to the contrary notwithstanding, no Lender may assign or
participate any interest in any Loan held by it hereunder to Borrower or
any of its Affiliates without the prior consent of each Lender.
SECTION 11.25 BROKERS. Borrower hereby represents to Administrative
Agent and each Lender that Borrower has not dealt with any broker, underwriters,
placement agent, or finder in connection with the transactions contemplated by
this Agreement and the other Loan Documents, other than Chase Securities, Inc.
(the "BROKER"). Borrower hereby agrees to pay all fees and commissions due and
payable to Broker and to indemnify and hold Administrative Agent and each Lender
harmless from and against any and all claims, liabilities, costs and expenses of
any kind in any way relating to or arising from a claim by any Person (including
Broker) that such Person acted on behalf of Borrower in connection with the
transactions contemplated herein.
SECTION 11.26 CONFIDENTIALITY. GECC agrees to use reasonable precautions
to keep confidential, in accordance with GECC's customary procedures for
handling confidential information of the same nature and in accordance with
sound banking practices, and any non-public information supplied to it by the
Borrower, and member of the Borrower or any Borrower Party pursuant to this
Agreement, provided that nothing herein shall limit the disclosure of any such
information (a) to the extent required by statute, rule, regulation or judicial
process, (b) on a confidential, "need-to-know" basis, to the Lenders and to the
advisors, consultants, counsel, and other representatives for any of the Lenders
or Administrative Agent, (c) to bank examiners or any other regulatory authority
having jurisdiction over any Lender or Administrative Agent, or to auditors or
accountants, (d) to Administrative Agent, (e) in connection with any litigation
to which any one or more of the Lenders or Administrative Agent is a party, or
in connection with the enforcement of rights or remedies hereunder or under any
other Loan Document (f) with the consent of the Borrower, (g) to the extent
already in GECC's possession or control, (h) to the extent that it is or becomes
generally available to the public, (i) to the extent that it is independently
developed by GECC, or (j) to the extent that it becomes available to GECC from a
source that is not, to GECC's knowledge, bound by a duty of confidentiality.
This provision will terminate on the first anniversary of the termination of
this Loan Agreement. Borrower acknowledges that GECC is a large, diverse
financial services institution with many contacts in the market. This Agreement
shall not preclude GECC from pursuing its ordinary course financing and
investing business which may include financing or other transactions involving
Borrower, its assets, or members. Nothing contained herein shall preclude GECC
from disclosing the confidential information to prospective investors, rating
agencies, and their
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respective advisors in connection with any disposition of the loan or other
investment (or any interest therein) by GECC. As used in this paragraph only,
"GECC" means solely the portion of the real estate lending business of GECC
headed by Xxxxxxx Xxxxxx or his successors, it being understood that no other
GECC business, component or affiliate shall be bound hereby.
ARTICLE 12
LIMITATIONS ON LIABILITY
SECTION 12.1 LIMITATION ON LIABILITY. Except as provided below, neither
Borrower nor any member, director or officer of Borrower shall be personally
liable for amounts due under the Loan Documents. Borrower shall be personally
liable to Administrative Agent and the Lenders for any deficiency, loss or
damage actually suffered by Administrative Agent or any Lender because of: (a)
Borrower's commission of a criminal act, (b) the failure to comply with
provisions of the Loan Documents prohibiting the sale, transfer or encumbrance
of the Portfolio or any portion thereof, any other collateral, or any direct or
indirect ownership interest in Borrower; (c) the misapplication by Borrower or
any Borrower Party of any funds derived from the Portfolio, including security
deposits, insurance proceeds and condemnation awards; (d) the fraud or
misrepresentation by Borrower or any Borrower Party made in or in connection
with the Loan Documents or the Loans; (e) Borrower's collection of rents more
than one month in advance; (f) Borrower's failure to apply proceeds of rents or
any other payments in respect of the leases and other income of the Portfolio or
any other collateral to the costs of maintenance and operation of the Portfolio
and to the payment of taxes, lien claims, insurance premiums, Debt Service and
other amounts due under the Loan Documents; (g) Borrower's interference with
Administrative Agent's exercise of rights under the Assignment of Rents and
Leases; (h) the failure to maintain the Hedge Instrument in accordance with
Section 8.16; (i) Borrower's failure to maintain insurance as required by this
Agreement or to pay any taxes or assessments affecting the Portfolio or any
portion thereof, or any mortgage recording or similar taxes required to be paid
by any Person in connection with the execution, delivery, recordation, filing,
registration, perfection or enforcement of any of the Loan Documents; (j) damage
or destruction to the any Property caused by the acts or omissions of Borrower,
its agents, employees, or contractors; (k) Borrower's obligations with respect
to environmental matters under ARTICLE 4; (l) Borrower's failure to pay for any
loss, liability or expense (including attorneys' fees) incurred by
Administrative Agent or any Lender arising out of any claim or allegation made
by Borrower, its successors or assigns, or any creditor of Borrower, that this
Agreement or the transactions contemplated by the Loan Documents establish a
joint venture, partnership or other similar arrangement among Borrower,
Administrative Agent, the Lenders, or any of them; or (m) any brokerage
commission or finder's fees claimed in connection with the transactions
contemplated by the Loan Documents. None of the foregoing limitations on the
personal liability of Borrower shall modify, diminish or discharge the personal
liability of (n) any Guarantor or (2) any Joinder Party. Notwithstanding
anything to the contrary contained in this Agreement or the other Loan
Documents, (A) neither Administrative Agent nor the Lenders shall be deemed to
have waived any right which Administrative Agent or any Lender may have under
Sections 506(a), 506(b), 1111(b) or any other provision of the United States
Bankruptcy Code, as such sections may be amended, to file a claim for the full
amount due to Administrative Agent or such Lender under the Loan Documents or to
require that all collateral shall continue to secure the amounts due under the
Loan Documents, and (B) the Indebtedness shall be fully recourse to Borrower in
the
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event that: (I) there is a default under Section 9.8 or Section 9.9 hereof; (II)
Borrower fails to obtain Administrative Agent's prior written consent to any
subordinate financing or other voluntary lien encumbering the Property; or (III)
Borrower fails to obtain Administrative Agent's prior written consent to any
assignment, transfer, or conveyance of the Property or any interest therein as
required by the Loan Documents, except as otherwise permitted under the Loan
Documents.
SECTION 12.2 LIMITATION ON LIABILITY OF LENDER'S OFFICERS, EMPLOYEES,
ETC. Any obligation or liability whatsoever of Administrative Agent or any
Lender which may arise at any time under this Agreement or any other Loan
Document shall be satisfied, if at all, out of Administrative Agent's or such
Lender's respective assets only. No such obligation or liability shall be
personally binding upon, nor shall resort for the enforcement thereof be had to,
the property of any of Administrative Agent's or any Lender's shareholders,
directors, officers, employees or agents, regardless of whether such obligation
or liability is in the nature of contract, tort or otherwise.
ARTICLE 13
ADMINISTRATIVE AGENT
SECTION 13.1 APPOINTMENT, POWERS AND IMMUNITIES. Each Lender hereby
appoints and authorizes Administrative Agent to act as its agent hereunder and
under the other Loan Documents with such powers as are specifically delegated to
Administrative Agent by the terms of this Agreement and of the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Administrative Agent (which term as used in this sentence and in Section 13.5
and the first sentence of Section 13.6 shall include reference to its affiliates
and its own and its affiliates' officers, directors, employees and agents):
(i) shall have no duties or responsibilities except
those expressly set forth in this Agreement and in the other
Loan Documents, and shall not by reason of this Agreement or any
other Loan Document be a trustee for any Lender;
(ii) shall not be responsible to the Lenders for any
recitals, statements, representations or warranties contained in
this Agreement or in any other Loan Document, or in any
certificate or other document referred to or provided for in, or
received by any of them under, this Agreement or any other Loan
Document, or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement,
any Note or any other Loan Document or any other document
referred to or provided for herein or therein or for any failure
by Borrower or any other Person to perform any of its
obligations hereunder or thereunder; and
(iii) shall not be responsible for any action taken or
omitted to be taken by it hereunder or under any other Loan
Document or under any other document or instrument referred to
or provided for herein or therein or in connection herewith or
therewith, except to the extent any such action taken or omitted
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violates Administrative Agent's standard of care set forth in
the first sentence of Section 13.5.
Administrative Agent may employ agents and attorneys-in-fact, and may delegate
all or any part of its obligations hereunder, to third parties and shall not be
responsible for the negligence or misconduct of any such agents,
attorneys-in-fact or third parties selected by it in good faith. Administrative
Agent may deem and treat the payee of a Note as the holder thereof for all
purposes hereof unless and until a notice of the assignment or transfer thereof
shall have been filed with Administrative Agent.
SECTION 13.2 RELIANCE BY ADMINISTRATIVE AGENT Administrative Agent shall
be entitled to rely upon any certification, notice or other communication
(including, without limitation, any thereof by telephone, telecopy, telegram or
cable) reasonably believed by it to be genuine and correct and to have been
signed or sent by or on behalf of the proper Person or Persons, and upon advice
and statements of legal counsel, independent accountants and other experts
selected by Administrative Agent. As to any matters not expressly provided for
by this Agreement or any other Loan Document, Administrative Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder or
thereunder in accordance with instructions given by the Majority Lenders, and
such instructions of the Majority Lenders and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders.
SECTION 13.3 DEFAULTS Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of a Potential Default or Event of Default
unless Administrative Agent has received notice from a Lender or Borrower
specifying such Potential Default or Event of Default and stating that such
notice is a "Notice of Default". In the event that Administrative Agent receives
such a notice of the occurrence of a Potential Default or Event of Default,
Administrative Agent shall give prompt notice thereof to the Lenders.
Administrative Agent shall (subject to Section 13.7) take such action with
respect to such Potential Default or Event of Default and other matters relating
to the Loans as shall be directed by the Lenders in accordance with a separate
agreement entered into by Administrative Agent and the Lenders.
SECTION 13.4 RIGHTS AS A LENDER With respect to GECC's Commitment and
the Loans made by it, GECC (and any successor acting as Administrative Agent) in
its capacity as a Lender hereunder shall have the same rights and powers
hereunder as any other Lender and may exercise the same as though it were not
acting as Administrative Agent, and the term "Lender" or "Lenders" shall, unless
the context otherwise indicates, include Administrative Agent in its individual
capacity. GECC (and any successor acting as Administrative Agent) and its
affiliates (including GECC) may (without having to account therefor to any
Lender) lend money to, make investments in and generally engage in any kind of
lending, trust or other business with Borrower (and any of its Affiliates) as if
it were not acting as Administrative Agent, and GECC and its affiliates
(including GECC may accept fees and other consideration from Borrower for
services in connection with this Agreement or otherwise without having to
account for the same to the Lenders.
SECTION 13.5 STANDARD OF CARE; INDEMNIFICATION. In performing its duties
under the Loan Documents, Administrative Agent will exercise the same degree of
care as GECC normally exercises in connection with real estate loans in which no
syndication or participations are
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involved, but Administrative Agent shall have no further responsibility to any
Lender except as expressly provided herein and except for its own gross
negligence or willful misconduct which resulted in actual loss to such Lender,
and, except to such extent, Administrative Agent shall have no responsibility to
any Lender for the failure by Administrative Agent to comply with any of
Administrative Agent's obligations to Borrower under the Loan Documents or
otherwise. The Lenders agree to indemnify Administrative Agent (to the extent
not reimbursed under Section 11.5, but without limiting the obligations of
Borrower under Section 11.5) ratably in accordance with the aggregate principal
amount of the Loans held by the Lenders (or, if no Loans are at the time
outstanding, ratably in accordance with their respective Commitments), for any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever that may be imposed on, incurred by or asserted against
Administrative Agent (including by any Lender) arising out of or by reason of
any investigation in or in any way relating to or arising out of this Agreement
or any other Loan Document or any other documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby (including,
without limitation, the costs and expenses that Borrower is obligated to pay
under Section 11.5, but excluding, unless a Event of Default has occurred and is
continuing, normal administrative costs and expenses incident to the performance
of its agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or of any such other documents, provided that no Lender shall be liable
for any of the foregoing to the extent they arise from Administrative Agent's
breach of its standard of care set forth in the first sentence of this Section.
SECTION 13.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS.
Each Lender agrees that it has, independently and without reliance on
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of
Borrower and its Affiliates and decision to enter into this Agreement and that
it will, independently and without reliance upon 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 analysis and decisions in
taking or not taking action under this Agreement or under any other Loan
Document. Subject to the provisions of the first sentence of Section 13.5,
Administrative Agent shall not be required to keep itself informed as to the
performance or observance by Borrower of this Agreement or any of the other Loan
Documents or any other document referred to or provided for herein or therein or
to inspect the Property or the books of Borrower or any of its Affiliates.
Except for notices, reports and other documents and information expressly
required to be furnished to the Lenders by Administrative Agent hereunder or as
otherwise agreed by Administrative Agent and the Lenders, Administrative Agent
shall not have any duty or responsibility to provide any Lender with any credit
or other information concerning the affairs, financial condition or business of
Borrower or any of its Affiliates that may come into the possession of
Administrative Agent or any of its affiliates.
SECTION 13.7 FAILURE TO ACT. Except for action expressly required of
Administrative Agent hereunder, and under the other Loan Documents,
Administrative Agent shall in all cases be fully justified in failing or
refusing to act hereunder and thereunder unless it shall receive further
assurances to its satisfaction from the Lenders of their indemnification
obligations under Section 13.5 against any and all liability and expense that
may be incurred by it by reason of taking or continuing to take any such action.
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SECTION 13.8 RESIGNATION OF ADMINISTRATIVE AGENT. Administrative Agent
may resign at any time by giving notice thereof to the Lenders and Borrower.
Upon any such resignation, the Majority Lenders shall have the right to appoint
a successor Administrative Agent which shall be a financial institution that has
(a) an office in New York, New York with a combined capital and surplus of at
least $500,000,000 and (b) knowledge and experience comparable to the resigning
Administrative Agent's knowledge and experience in the servicing of loans
similar to the Loans hereunder. If no successor Administrative Agent shall have
been so appointed by the Majority Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent's giving of
notice of resignation of the retiring Administrative Agent, then the retiring
Administrative Agent's resignation shall nonetheless become effective and (i)
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and (ii) the Majority Lenders shall perform the duties of
Administrative Agent (and all payments and communications provided to be made
by, to or through Administrative Agent shall instead be made by or to each
Lender directly) until such time as the Majority Lenders appoint a successor
agent as provided for above in this Section 13.8. 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 retiring (or
retired) Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder (if not already discharged
therefrom as provided above in this Section 13.8). The fees payable by Borrower
to a successor Administrative Agent shall be the same as those payable to its
predecessor unless otherwise agreed between Borrower and such successor. After
any retiring Administrative Agent's resignation hereunder as Administrative
Agent, the provisions of this Article 13 and Section 11.5 shall continue in
effect for its benefit in respect of any actions taken or omitted to be taken by
it while it was acting as Administrative Agent.
[Signature Pages Follow]
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EXECUTED as of the date first written above.
LENDER: GENERAL ELECTRIC CAPITAL
CORPORATION, a New York corporation
By: /s/ Xxxxxxx Xxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Authorized Signatory
Address for Notices:
General Electric Capital Corporation
000 Xxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
Telecopier No.:
Lending Office for Eurodollar and
Alternate Base Rate Loans:
General Electric Capital Corporation
000 Xxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
Telecopier No.:
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BORROWER: CCP/SHURGARD VENTURE, LLC, a
Delaware limited liability company
By: SHURGARD DEVELOPMENT IV, INC.,
a Washington corporation, its
managing member
By: /s/ Xxxxxxx X. Xxxx
-------------------------------------
Xxxxxxx X. Xxxx,
Senior Vice President
Address for Notices:
CCP/Shurgard Venture, LLC
c/o Shurgard Storage Centers, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer and
General Counsel
Telecopy: (000) 000-0000
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ADMINISTRATIVE AGENT: GENERAL ELECTRIC CAPITAL CORPORATION,
a New York corporation,
as Administrative Agent
By: /s/ Xxxxxxx Xxxxxxx
-------------------------------------
Xxxxxxx Xxxxxxx
Authorized Signatory
Address for Notices:
General Electric Capital Corporation
000 Xxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
Telecopier No.:
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80
JOINDER
By executing this Joinder (the "JOINDER"), the undersigned ("JOINDER PARTIES")
jointly and severally guaranty the performance by Borrower of Borrower's
obligations with respect to environmental matters under ARTICLE 4 of this
Agreement, Borrower's indemnification obligations under Section 8.12 of this
Agreement, and all obligations and liabilities for which Borrower is personally
liable under Section 12.1 of this Agreement. This Joinder is a guaranty of full
and complete payment and performance and not of collectability.
1. WAIVERS. To the fullest extent permitted by applicable law, each Joinder
Party waives all rights and defenses of sureties, guarantors, accommodation
parties and/or co-makers and agrees that its obligations under this Joinder
shall be primary, absolute and unconditional, and that its obligations under
this Joinder shall be unaffected by any of such rights or defenses, including:
(a) the unenforceability of any Loan Document against Borrower and/or any
Guarantor or other Joinder Party;
(b) any release or other action or inaction taken by Administrative Agent or any
Lender with respect to the collateral, the Loans, Borrower, any Guarantor and/or
other Joinder Party, whether or not the same may impair or destroy any
subrogation rights of any Joinder Party, or constitute a legal or equitable
discharge of any surety or indemnitor;
(c) the existence of any collateral or other security for the Loans, and any
requirement that Administrative Agent or any Lender pursue any of such
collateral or other security, or pursue any remedies it may have against
Borrower, any Guarantor and/or any other Joinder Party;
(d) any requirement that Administrative Agent or any Lender provide notice to or
obtain a Joinder Party's consent to any modification, increase, extension or
other amendment of the Loans, including the guaranteed obligations;
(e) any right of subrogation (until payment in full of the Loans, including the
guaranteed obligations, and the expiration of any applicable preference period
and statute of limitations for fraudulent conveyance claims);
(f) any defense based on any statute of limitations;
(g) any payment by Borrower to Administrative Agent or any Lender if such
payment is held to be a preference or fraudulent conveyance under bankruptcy
laws or Administrative Agent or any Lender is otherwise required to refund such
payment to Borrower or any other party; and
(h) any voluntary or involuntary bankruptcy, receivership, insolvency,
reorganization or similar proceeding affecting Borrower or any of its assets.
2. AGREEMENTS. Each Joinder Party further represents, warrants and agrees that:
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(a) The obligations under this Joinder are enforceable against each such party
and are not subject to any defenses, offsets or counterclaims;
(b) The provisions of this Joinder are for the benefit of Administrative Agent
and the Lenders and their successors and assigns;
(c) Administrative Agent and the Lenders shall have the right to (i) renew,
modify, extend or accelerate the Loans, (ii) pursue some or all of its remedies
against Borrower, any Guarantor or any Joinder Party, (iii) add, release or
substitute any collateral for the Loans or party obligated thereunder, and (iv)
release Borrower, any Guarantor or any Joinder Party from liability, all without
notice to or consent of any Joinder Party (or other Joinder Party) and without
affecting the obligations of any Joinder Party (or other Joinder Party)
hereunder;
(d) Each Joinder Party covenants and agrees to furnish to Administrative Agent,
within ninety (90) days after the end of each fiscal year of such Joinder Party,
a current (as of the end of such fiscal year) balance sheet of such Joinder
Party, in scope and detail satisfactory to Administrative Agent, certified by
the chief financial representative of such Joinder Party and, if required by
Administrative Agent, prepared on a review basis and certified by an independent
public accountant satisfactory to Administrative Agent;
(e) The obligations of Joinder Party under this Joinder shall be automatically
reinstated if and to the extent that for any reason any payment by or on behalf
of Borrower in respect of any of the obligations Joinder Party hereunder is
rescinded or must be otherwise restored by any holder of the Notes or other
obligations under this Agreement, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise; and Joinder Party agrees that it will
indemnify Administrative Agent and the Lenders on demand for all reasonable
costs and expenses (including, without limitation, reasonable fees and expenses
of counsel) incurred by Administrative Agent or any of the Lenders in connection
with such rescission or restoration, including any such costs and expenses
incurred in defending against any claim alleging that such payment constituted a
preference, fraudulent transfer or similar payment under any bankruptcy,
insolvency or similar law.
(f) TO THE MAXIMUM EXTENT PERMITTED BY LAW, EACH JOINDER PARTY, ADMINISTRATIVE
AGENT AND EACH LENDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE
RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON. THIS WAIVER
IS A MATERIAL INDUCEMENT TO ADMINISTRATIVE AGENT AND THE LENDERS TO ENTER INTO
THIS AGREEMENT; and
(g) Each Joinder Party covenants and agrees to cooperate with Administrative
Agent and the Lenders upon the sale, assignment or transfer of the Loans, or any
portion thereof, in accordance with the provisions of Section 11.9 and Section
11.24 of this Agreement.
This Joinder shall be governed by the laws of the State of New York.
Executed as of December ____, 2000.
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JOINDER PARTIES:
SHURGARD DEVELOPMENT IV,
INC., a Washington corporation
By: /s/ Xxxxxxx X. Xxxx
-------------------------------------
Name: Xxxxxxx X. Xxxx
-------------------------------
Title: Senior Vice President
------------------------------
[CORPORATE SEAL]
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