1
CREDIT AGREEMENT
DATED AS OF MARCH 1, 1995
AMONG
WASHINGTON REAL ESTATE INVESTMENT TRUST,
AS BORROWER
AND
THE FIRST NATIONAL BANK OF CHICAGO,
AS LENDER
AND
THE FIRST NATIONAL BANK OF CHICAGO,
AS AGENT
2
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II THE CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.1. Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.2. Final Principal Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.3. Ratable Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.4. Applicable Margins . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.5. Commitment Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.6. Unused Facility Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.7. Minimum Amount of Each Advance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.8. Optional Principal Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.9. Method of Selecting Types and Interest Periods for New Advances . . . . . . . . . . . . . . . . 20
2.10. Conversion and Continuation of Outstanding Advances . . . . . . . . . . . . . . . . . . . . . . 21
2.11. Changes in Interest Rate. Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.12. Rates Applicable After Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.13. Method of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.14. Notes; Telephonic Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.15. Interest Payment Dates; Interest and Fee Basis . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.16. Notification of Advances, Interest Rates and Prepayments . . . . . . . . . . . . . . . . . . . . 23
2.17. Lending Installations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.18. Non-Receipt of Funds by the Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.19. Withholding Tax Exemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.20. Reduction in Aggregate Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE III CHANGE IN CIRCUMSTANCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.1. Yield Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.2. Changes in Capital Adequacy Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.3. Availability of LIBOR Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.4. Funding Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.5. Lender Statements; Survival of Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.6 Replacement of Lender by Reason of Change in Circumstances . . . . . . . . . . . . . . . . . . . 26
ARTICLE IV CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.1. Initial Advance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.2. Each Advance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE V REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.1. Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.2. Authorization and Validity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.3. No Conflict; Government Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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5.4. Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5.5. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5.6. Litigation and Guarantee Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5.7. No Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5.8. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5.9. Accuracy of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5.10. Regulation U . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5.11. Material Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5.12. Compliance With Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.13. Ownership of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.14. Investment Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.15. Public Utility Holding Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.16. Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.17. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.18. REIT Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE VI COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
6.1. Financial Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
6.2. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.3. Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.4. Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.5. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.6. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.7. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.8. Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.9. Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.10. Maintenance of Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.11. Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.12. Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
6.13. Delivery of Subsidiary Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
6.14. Sale of Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
6.15. Sale and Leaseback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
6.16. Acquisitions and Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
6.17. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
6.18. Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
6.19. Cash Flow to Debt Service Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.20. Consolidated Tangible Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.21. Indebtedness and Cash Flow Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE VII DEFAULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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ARTICLE VIII ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . 41
8.1. Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8.2. Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8.3. Preservation of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE IX GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
9.1. Survival of Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
9.2. Governmental Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
9.3. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
9.4. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
9.5. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
9.6. Several Obligations; Benefits of this Agreement . . . . . . . . . . . . . . . . . . . . . . . . 43
9.7. Expenses; Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
9.8. Numbers of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
9.9. Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
9.10. Severability of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
9.11. Nonliability of Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
9.12. CHOICE OF LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
9.13. CONSENT TO JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
9.14. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE X THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
10.1. Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
10.2. Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
10.3. General Immunity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
10.4. No Responsibility for Loans, Recitals, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . 45
10.5. Action on Instructions of Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
10.6. Employment of Agents and Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
10.7. Reliance on Documents; Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
10.8. Agent's Reimbursement and Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
10.9. Rights as a Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
10.10. Lender Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
10.11. Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
10.12. Commitment as a Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE XI SETOFF; RATABLE PAYMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
11.1. Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
11.2. Ratable Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE XII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATION . . . . . . . . . . . . . . . . . . . . . . . . 48
12.1. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
12.2. Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
12.3. Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
12.4. Dissemination of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
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12.5. Tax Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE XIII NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
13.1. Giving Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
13.2. Change of Address . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE XIV COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE XV NO OFFICER, ETC. LIABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
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Exhibits:
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Exhibit A Form of Note
Exhibit B Form of Opinion
Exhibit C Form of Compliance Certificate
Exhibit D Form of Assignment Agreement
Exhibit E Form of Loan/Credit Related Money Transfer Instruction
Schedules:
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Schedule 1 Subsidiaries and Other Investments
Schedule 2 Indebtedness and Liens
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CREDIT AGREEMENT
This Agreement, dated as of March 1, 1995, is among Washington Real
Estate Investment Trust, a real estate investment trust organized under the
laws of the District of Columbia (the "Borrower"), The First National Bank of
Chicago, a national banking association (the "Lender"), and The First National
Bank of Chicago, as "Agent."
RECITALS
A. The Borrower is primarily engaged in the business of
purchasing, developing, owning, operating and renovating apartment buildings,
shopping centers, office buildings, business centers and warehouses.
B. The Borrower is listed on the American Stock Exchange and is
qualified as a real estate investment trust.
C. The Borrower has requested that the Lender make loans
available to them pursuant to the terms of this Agreement. The Agent and the
Lender have agreed to do so.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which the
Borrower or any of its Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any firm, corporation or division thereof,
whether through purchase of assets, merger or otherwise or (ii) directly or
indirectly acquires (in one transaction or as the most recent transaction in a
series of transactions) at least a majority (in number of votes) of the
securities of a corporation which have ordinary voting power for the election
of directors (other than securities having such power only by reason of the
happening of a contingency) or a majority (by percentage or voting power) of
the outstanding partnership interests of a partnership.
"Advance" means a borrowing hereunder consisting of the aggregate
amount of the several Loans made by the Lenders to the Borrower of the same
Type and, in the case of LIBOR Advances. for the same Interest Period.
"Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by or under common control with such Person.
A Person shall be deemed to control another Person if the controlling Person
owns 10% or more of any class of voting
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securities (or other ownership interests) of the controlled Person or
possesses, directly or indirectly, the power to direct or cause the direction
of the management or policies of the controlled Person, whether through
ownership of stock, by contract or otherwise. Lender acknowledges and agrees
that until such time as CSN's (the current property manager for Borrower's
properties) financial results are reported on a consolidated basis with the
financial results of Borrower, then CSN shall not be considered an "Affiliate"
of Borrower.
"Agent" means The First National Bank of Chicago in its capacity as
agent for the Lenders pursuant to Article X, and not in its individual capacity
as a Lender, and any successor Agent appointed pursuant to Article X.
"Aggregate Commitment" means the aggregate of the Commitments of all
the Lenders (not to exceed the Maximum Aggregate Commitment), as modified from
time to time pursuant to the terms hereof.
"Agreement" means this Credit Agreement, as it may be amended or
modified and in effect from time to time.
"Applicable Margin" is defined in Section 2.4.
"Article" means an article of this Agreement unless another document
is specifically referenced.
"Authorized Officer" means any of the Chief Executive Officer,
President, Chief Financial Officer or Chief Accounting Officer of the Borrower,
acting singly.
"Borrower" means Washington Real Estate Investment Trust, a real
estate investment trust organized under the laws of the District of Columbia,
and its successors and assigns.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.9.
"Business Day" means (i) with respect to any borrowing, payment or
rate selection of LIBOR Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago, Illinois and New York, New York for
the conduct of substantially all of their commercial lending activities and on
which dealings in United States dollars are carried on in the London interbank
market and (ii) for all other purposes, a day (other than a Saturday or Sunday)
on which banks generally are open in Chicago, Illinois for the conduct of
substantially all of their commercial lending activities.
"Calculation Date" is defined in Section 2.4.
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"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants or options to purchase any of the foregoing.
"Cash Flow to Debt Service Ratio" means, as for any date for any
period, the ratio calculated by dividing (x) actual EBITDA for such period, by
(y) Consolidated Debt Service for such period.
"CBR Advance" means an Advance which bears interest at the CBR Rate.
"CBR Applicable Margin" means, as of any date, the Applicable Margin
in effect as determined in accordance with Section 2.4 hereof.
"CBR Loan" means a Loan which bears interest at the CBR Rate.
"CBR Rate" means, for any day, a rate per annum equal to (i) the
Corporate Base Rate in effect on such day, plus (ii) the CBR Applicable Margin.
"Closing Date" means the date that all the conditions precedent to the
initial Advance, as specified in Section 4.1, have been satisfied; provided,
however, that the obligations of the Lenders to make Loans hereunder shall
automatically terminate if such date does not occur on or before March 10,
1995.
"Code" means the Internal Revenue Code of 1986, as amended, reformed
or otherwise modified from time to time.
"Commitment Fee" is defined in Section 2.5.
"Commitment" means, for each Lender, the obligation of such Lender to
make Loans not exceeding the amount set forth opposite its signature below or
as set forth in any Notice of Assignment relating to any assignment that has
become effective pursuant to Section 12.3.2, as such amount may be modified
from time to time pursuant to the terms hereof.
Condemnation" is defined in Section 7.8.
"Consolidated Debt Service" for any period means (a) Consolidated
Interest Expense for such period plus (b) the aggregate amount of scheduled
principal payments of Indebtedness (excluding optional prepayments and
scheduled principal payments in respect of any Indebtedness which is payable in
a single installment at final maturity) required to be made during such period
by the Borrower or any of its consolidated Subsidiaries.
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"Consolidated Interest Expense," for any period, means the amount of
interest expense of the Borrower and its Subsidiaries for such period on the
aggregate principal amount of their Indebtedness, determined on a consolidated
basis in accordance with GAAP plus any capitalized interest which accrued
during such period.
"Consolidated Net Income," for any period, means consolidated net
income (or loss) of the Borrower and its Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP; provided that there
shall be excluded (a) the income (or deficit) of any other Person accrued prior
to the date it becomes a Subsidiary of the Borrower or is merged into or
consolidated with the Borrower or any of its Subsidiaries and (b) the
undistributed earnings of any Subsidiary to the extent that the declaration or
payment of dividends or similar distributions by such Subsidiary is not at the
time permitted by the terms of any contractual obligation or requirement of law
applicable to such Subsidiary.
"Consolidated Secured Indebtedness," as of any date of determination,
means the sum of (a) the aggregate principal amount of all Indebtedness of the
Borrower and its Subsidiaries outstanding at such date which does not
constitute Unsecured Indebtedness and (b) the excess, if any, of (i) the
aggregate principal amount of all Unsecured Indebtedness of the Subsidiaries of
the Borrower over (ii) $10,000,000, determined on a consolidated basis in
accordance with GAAP.
"Consolidated Senior Unsecured Indebtedness," as of any date of
determination, means the sum of (a) the aggregate principal amount of all
Indebtedness of the Borrower and its Subsidiaries outstanding at such date
which constitutes Unsecured Indebtedness (excluding (i) Indebtedness which is
contractually subordinated to the Indebtedness of the Borrower and its
Subsidiaries under the Loan Documents on customary terms acceptable to the
Agent, (ii) Indebtedness of the Borrower and its Subsidiaries under the Loan
Documents and (iii) Indebtedness incurred pursuant to any commitment referred
to in clause (c) below), (b) the aggregate Commitments then in effect under the
Facility, and (c) the aggregate commitments then in effect with respect to any
other unsecured committed line of credit extended to the Borrower or any of its
Subsidiaries, determined on a consolidated basis in accordance with GAAP.
"Consolidated Tangible Net Worth," at any date of determination, means
an amount equal to (a) Total Tangible Assets as of such date minus (b)
Consolidated Total Indebtedness as of such date.
"Consolidated Total Indebtedness," as of any date of determination,
means all Indebtedness of the Borrower and its Subsidiaries outstanding at such
date, determined on a consolidated basis in accordance with GAAP.
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11
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower or any of its Subsidiaries,
are treated as a single employer under Section 414 of the Code.
"Conversion/Continuation Notice" is defined in Section 2.10.
"Corporate Base Rate" means a rate per annum equal to the corporate
base rate of interest announced by First Chicago from time to time, changing
when and as such corporate base rate changes.
"Crestar Agreement means the Credit Agreement dated as of August 26,
1994 between the Borrower and Crestar Bank, as the same may be amended from
time to time.
"Current DSC Ratio" means, as of any date, the ratio calculated by
dividing (x) the actual EBITDA for the most recently completed fiscal quarter,
by (y) the actual Consolidated Debt Service for such fiscal quarter.
"Default" means an event described in Article VII.
"EBITDA" means earnings before interest, taxes (other than real estate
taxes), depreciation and amortization, all as calculated in accordance with
GAAP.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Facility Termination Date" means January 31, 1999.
"Federal Funds Effective Rate" means, for any day, an interest rate
per annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day
which is a Business Day, the average of the quotations at approximately 10 a.m.
(Chicago time) on such day on such transactions received by the Agent from
three Federal funds brokers of recognized standing selected by the Agent in its
sole discretion.
"Financing Lease" means any lease of property, real or personal, the
obligations of the lessee in respect of which are, in accordance with GAAP,
capitalized on a balance sheet of the lessee.
"First Chicago" means The First National Bank of Chicago in its
individual capacity as a Lender. and its successors.
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12
"Funded Percentage" means, with respect to any Lender at any time, a
percentage equal to a fraction the numerator of which is the amount of the
outstanding Advances from such Lender, at such time, and the denominator of
which is the outstanding Advances from all of the Lenders at such time.
"Funds From Operations," for any period, means Consolidated Net Income
for such period as adjusted by (i) excluding gains and losses from property
sales, debt restructuring and property write-downs and adjusted for the
non-cash effect of straight-lining of rents, (ii) to the extent not already
accomplished under GAAP, straight-lining various ordinary operating expenses
which are payable less frequently than monthly (e.g. real estate taxes), and
(iii) adding back depreciation, amortization and all non-cash items.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time, applied in a manner
consistent with that used in preparing the financial statements referred to in
Section 6.1.
"Guarantee Obligation" means, as to any Person (the "guaranteeing
person"), any obligation (determined without duplication) of (a) the
guaranteeing person or (b) another Person (including, without limitation, any
bank under any letter of credit) to induce the creation of which the
guaranteeing person has issued a reimbursement, counterindemnity or similar
obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary
obligations") of any other third Person (the "primary obligor") in any manner,
whether directly or indirectly, including, without limitation, any obligation
of the guaranteeing person, whether or not contingent, (i) to purchase any such
primary obligation or any property constituting direct or indirect security
therefor, (ii) to advance or supply funds (1) for the purchase or payment of
any such primary obligation or (2) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assure or hold harmless the owner of
any such primary obligation against loss in respect thereof; provided, however,
that the term Guarantee Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Guarantee Obligation of any guaranteeing person shall be deemed
to be the maximum stated amount of the primary obligation relating to such
Guarantee Obligation (or, if less, the maximum stated liability set forth in
the instrument embodying such Guarantee Obligation), provided, that in the
absence of any such stated amount or stated liability, the amount of such
Guarantee Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by the Borrower in good
faith.
"Indebtedness" of any Person at any date means without duplication,
(a) all indebtedness of such Person for borrowed money (including liabilities
arising under Financing Leases), (b) all obligations of such Person for the
deferred purchase price of property or
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13
services (other than current trade liabilities incurred in the ordinary course
of business and payable in accordance with customary practices), to the extent
such obligations constitute indebtedness for the purposes of GAAP, (c) any
other indebtedness of such Person which is evidenced by a note, bond, debenture
or similar instrument, (d) all obligations of such Person in respect of
acceptances issued or created for the account of such Person, (e) all Guarantee
Obligations of such Person (excluding, in the case of the Borrower, Guarantee
Obligations of the Borrower in respect of primary obligations of any
Subsidiary), and (f) all liabilities secured by any lien (other than liens for
taxes not yet due and payable) on any property owned by such Person even though
such Person has not assumed or otherwise become liable for the payment thereof.
"Interest Period" means, with respect to a LIBOR Advance, a period of
one, two, three, six, nine or twelve months commencing on a Business Day
selected by the Borrower pursuant to this Agreement. Such Interest Period
shall end on (but exclude) the day which corresponds numerically to such date
one, two, three, six, nine or twelve months thereafter, provided, however, that
if there is no such numerically corresponding day in such next, second, third,
sixth, ninth or twelfth succeeding month, such Interest Period shall end on the
last Business Day of such next, second, third, sixth, ninth or twelfth
succeeding month. If an Interest Period would otherwise end on a day which is
not a Business Day, such Interest Period shall end on the next succeeding
Business Day, provided, however, that if said next succeeding Business Day
falls in a new calendar month, such Interest Period shall end on the
immediately preceding Business Day.
"Lenders" means the lending institutions listed on the signature pages
of this Agreement, their respective successors and assigns and any other
lending institutions that subsequently become parties to this Agreement.
"Lending Installation" means, with respect to a Lender, any office,
branch, subsidiary or affiliate of such Lender.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"LIBOR Advance" means an Advance which bears interest at a LIBOR Rate.
"LIBOR Applicable Margin" means, as of any date with respect to any
Interest Period, the Applicable Margin in effect for such Interest Period as
determined in accordance with Section 2.4 hereof.
"LIBOR Base Rate" means, with respect to a LIBOR Advance for the
relevant Interest Period, the rate determined by the Agent to be the rate at
which deposits in U.S. dollars are offered by the Agent to first-class banks in
the London interbank market at approximately a.m. (London time) two Business
Days prior to the first day of such Interest Period, in the
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14
approximate amount of the relevant LIBOR Advance and having a maturity
approximately equal to such Interest Period.
"LIBOR Loan" means a Loan which bears interest at a LIBOR Rate.
"LIBOR Rate" means, with respect to a LIBOR Advance for the relevant
Interest Period, the sum of (i) the quotient of (a) the LIBOR Base Rate
applicable to such Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
(ii) the LIBOR Applicable Margin in effect on the day that such LIBOR Base Rate
was determined. The LIBOR Rate shall be rounded to the next higher multiple of
1/16 of 1% if the rate is not such a multiple.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, capitalized lease or other title retention
agreement).
"Loan" means, with respect to a Lender, such Lender's portion of any
Advance.
"Loan Documents" means this Agreement, the Note(s) and any other
document from time to time evidencing or securing indebtedness incurred by the
Borrower under this Agreement, as any of the foregoing may be amended or
modified from time to time.
"Loan Year" means the period of 12 months ending on the first
anniversary of the date of this Agreement, and thereafter, each succeeding 12
month period ending on an anniversary of the date of this Agreement.
"Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), results of operations,
or prospects of the Borrower and its Subsidiaries taken as a whole, (ii) the
ability of the Borrower to perform its obligations under the Loan Documents, or
(iii) the validity or enforceability of any of the Loan Documents or the rights
or remedies of the Agent or the Lenders thereunder.
"Maximum Aggregate Commitment" means $25,000,000, or at any time such
other amount as has been approved by all of the Lenders.
"Moody's" means Xxxxx'x Investors Service, Inc. and its successors.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Borrower or any
member of the Controlled Group is a party to which more than one employer is
obligated to make contributions.
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15
"Note" means a promissory note, in substantially the form of Exhibit A
hereto, duly executed by the Borrower and payable to the order of a Lender in
the amount of its Commitment, including any amendment, modification, renewal or
replacement of such promissory note.
"Notice of Assignment" is defined in Section 12.3.2.
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Notes, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Borrower to the
Lenders or to any Lender, the Agent or any indemnified party hereunder arising
under the Loan Documents.
"Office Building Assets" means all office buildings owned by Borrower
from time to time.
"Participants" is defined in Section 12.2.1.
"Payment Date" means, with respect to the payment of interest accrued
on any Advance, the first day of each calendar month.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Percentage" means, with respect to each Lender, the applicable
percentage of the then-current Aggregate Commitment represented by such
Lender's then-current Commitment.
"Permitted Acquisitions" are defined in Section 6.16.
"Permitted Liens" are defined in Section 6.17.
"Person" means any natural person, corporation, firm, joint venture,
partnership, association, enterprise, trust or other entity or organization, or
any government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by
Title IV of ERISA or subject to the minimum funding standards under Section 412
of the Code as to which the Borrower or any member of the Controlled Group may
have any liability.
(ii) The definitions of "Projected EBITDA" and "Projected Consolidated
Interest Expense" are hereby deleted from the Credit Agreement.
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets
owned, leased or operated by such Person.
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16
"Public Debt Rating Date" means the date, if any, on which Borrower
first obtains an investment grade public debt rating on long-term senior
Unsecured Indebtedness from S&P and/or Moody's.
"Purchasers" is defined in Section 12.3.1.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or
other regulation or official interpretation of said Board of Governors relating
to the extension of credit by banks for the purpose of purchasing or carrying
margin stocks applicable to member banks of the Federal Reserve System.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event, provided, however, that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any such waiver of
the notice requirement in accordance with either Section 4043(a) of ERISA or
Section 412(d) of the Code.
"Required Lenders" means Lenders in the aggregate having at least
6-2/3% of the Aggregate Commitment or, if the Aggregate Commitment has been
terminated, Lenders in the aggregate holding at least 66-2/3% of the aggregate
unpaid principal amount of the outstanding Advances.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement on Eurocurrency liabilities. On the date
of this Agreement First Chicago's Reserve Requirement is 0.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"Subsidiary," as to any Person, means a corporation, partnership or
other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to elect a
majority of the board of directors or other managers of such corporation,
partnership or other entity are at the time owned, or the management of which
is otherwise controlled, directly or indirectly through one or more
intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrower.
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17
"Substantial Portion" means, with respect to the Property of the
Borrower and its Subsidiaries, Property which (i) represents more than 15% of
the consolidated assets of the Borrower and its Subsidiaries as would be shown
in the consolidated financial statements of the Borrower as at the beginning of
the twelve-month period ending with the month in which such determination is
made, or (ii) is responsible for more than 10% of the consolidated net sales or
of the consolidated net income of the Borrower and its Subsidiaries as
reflected in the financial statements referred to in clause (i) above.
"S&P" means Standard & Poor's Ratings Group and its successors.
"Total Tangible Assets," of any Person at any date, means the current
book value of the total assets of such Person other than that portion of such
Person's assets that constitute intangible assets as determined in accordance
with GAAP plus accumulated depreciation on the depreciable assets (excluding
intangible assets) from such Person's original book value of such assets which
is reflected in the current book value of such assets.
"Transferee" is defined in Section 12.4.
"Type" means, with respect to any Advance, its nature as a CBR Advance
or a LIBOR Advance.
"Unencumbered Asset," with respect to any asset, at any date of
determination, means the circumstance that such asset on such date (a) is not
subject to any Liens of any kind, other than Permitted Liens (excluding however
Permitted Liens of the type contemplated by the penultimate paragraph of
Section 6.17 hereof), (b) is not subject to any agreement (including (i) any
agreement governing Indebtedness incurred in order to finance or refinance the
acquisition of such asset), and (ii) if applicable, the organizational
documents of any Subsidiary) (other than the Crestar Agreement, the terms of
which restrict Borrower's ability to encumber certain of Borrower's assets)
which prohibits or limits the ability of the Borrower or any of its
Subsidiaries to create, incur, assume or suffer to exist any Lien upon any
assets or Capital Stock of the Borrower or any of its Subsidiaries (excluding
any agreement which limits generally the amount of secured Indebtedness which
may be incurred by the Borrower and its Subsidiaries), and (c) is not subject
to any agreement (including any agreement governing Indebtedness incurred in
order to finance or refinance the acquisition of such asset, but excluding the
terms of the Crestar Agreement) which entitles any Person to the benefit of any
Lien (other than Permitted Liens) on any assets or Capital Stock of the
Borrower or any of its Subsidiaries, or would entitle any Person to the benefit
of any Lien (other than Permitted Liens) on such assets or Capital Stock upon
the occurrence of any contingency (including, without limitation, pursuant to
an "equal and ratable" clause). For the purposes of this Agreement, any
Property of a Subsidiary which is not a Wholly-Owned Subsidiary shall not be
deemed to be unencumbered unless both (i) such Property and (ii) all Capital
Stock of such Subsidiary held by the Borrower is unencumbered.
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18
"Unfunded Liabilities" means the amount (if any) by which the present
value of all vested nonforfeitable benefits under all Single Employer Plans
exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans.
"Unmatured Default" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.
"Unsecured Indebtedness" means all Indebtedness of any Person that is
not secured by a Lien on any income, Capital Stock, Property or any other asset
of such Person.
"Unused Facility Fee" is defined in Section 2.6.
"Value of Unencumbered Assets," as of any date, means the gross book
value, as determined in accordance with GAAP, of all Unencumbered Assets owned
by the Borrower or any of its Subsidiaries as of such date.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of
the outstanding voting securities of which shall at the time be owned or
controlled, directly or indirectly, by such Person or one or more Wholly-Owned
Subsidiaries of such Person, or by such Person and one or more Wholly-Owned
Subsidiaries of such Person, or (ii) any partnership, association, joint
venture or similar business organization 100% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE II
THE CREDIT
2.1. Commitment. From and including the date of this Agreement and
prior to the Facility Termination Date, each Lender severally agrees, on the
terms and conditions set forth in this Agreement, to make Loans to the Borrower
from time to time in amounts not to exceed in the aggregate at any one time
outstanding the amount of its Commitment. Subject to the terms of this
Agreement, the Borrower may borrow, repay and reborrow at any time prior to the
Facility Termination Date. The Commitments to lend hereunder shall expire on
the Facility Termination Date.
2.2. Final Principal Payment. Any outstanding Advances and all
other unpaid Obligations shall be paid in full by the Borrower on the Facility
Termination Date.
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2.3. Ratable Loans. Each Advance hereunder shall consist of Loans
made from the several Lenders ratably in proportion to the ratio that their
respective Commitments bear to the Aggregate Commitment. The Advances may be
CBR Advances or LIBOR Advances, or a combination thereof, selected by the
Borrower in accordance with Sections 2.9 and 2.10. If any Lender shall default
in its obligation to fund all or a portion of its Percentage of any Advance (a
"Defaulting Lender"), then simultaneously with any funding by any of the
remaining Lenders (each, a "Funding Lender") of their respective Percentages of
such Advance (such an Advance is sometimes referred to herein as a "Partial
Advance"), the respective Funded Percentages of each Defaulting Lender and of
each Funding Lender shall automatically be adjusted so that following such
adjustment each Lender's Funded Percentage shall correspond to the aggregate
percentage of all then outstanding Advances (including all Partial Advances)
made by such Lender. Following any adjustment of each Lender's Funded
Percentage pursuant to the preceding sentence such Lender's Funded Percentage
shall be readjusted only upon the first to occur of (a) a Defaulting Lender
subsequently funding its Percentage of any such Partial Advance, or (b) the
repayment in full (including all interest thereon) to each Funding Lender of
its Percentage of any such Partial Advance. Notwithstanding anything contained
herein to the contrary, in no event shall any Defaulting Lender be entitled to
receive any repayment of its Percentage of any Advances (or any interest earned
thereon) until such time as the Funding Lenders have received repayment in full
of the amount of any Partial Advance, together with all interest thereon.
Borrower shall have the right to replace a Defaulting Lender in the manner set
forth in Section 3.6 below, and upon the replacement of any Defaulting Lender,
such Defaulting Lender shall refund to Borrower the pro rata share of all
commitment fees paid to such Defaulting Lender which have not been earned by
such Defaulting Lender as of the date of such replacement, determined by
multiplying the amount of all commitment fees paid by Borrower to or for the
benefit of such Defaulting Lender by a fraction, the numerator of which is the
number of months (it being understood and agreed that for purposes of this
provision a portion of any month shall constitute a complete "month") which
have elapsed in the 48 month Facility term, and the denominator of which is 48.
Solely by way of example, if Borrower has paid aggregate commitment fees of
$75,000 to a Defaulting Lender, and Borrower replaces such Defaulting Lender on
the second anniversary of the Closing Date, then concurrently with such
replacement such Defaulting Lender shall return to Borrower $37,500 of the
$75,000 in commitment fees.
2.4. Applicable Margins. Prior to the Public Debt Rating Date, the
CBR Applicable Margin and the LIBOR Applicable Margin to be used in calculating
the interest rate applicable to the different Types of Advances shall vary from
time to time in accordance with the Loan Year and the Current DSC Ratio, and
shall be adjusted on each Calculation Date (as defined below), as shown in the
following tables based on the then applicable Loan Year and the Current DSC
Ratio at that time:
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A. Loan Year 1
LIBOR CBR
CURRENT APPLICABLE APPLICABLE
DSC RATIO MARGIN MARGIN
---------- ---------- ----------
1. greater than 8X 0.30% 0%
2. greater than 6X 0.50% 0%
3. greater than 4X 1.20% 0%
4. greater than 3X 1.35% 0.375%
5. greater than 2.5X 1.50% 0.50%
6. less than
or equal to 2.5X 3.00% 1.50%
B. Loan Year 2
LIBOR CBR
CURRENT APPLICABLE APPLICABLE
DSC RATIO MARGIN MARGIN
---------- ---------- ----------
1. greater than 8X 0.40% 0%
2. greater than 6X 0.65% 0%
3. greater than 4X 1.40% 0.125%
4. greater than 3X 1.55% 0.50%
5. greater than 2.5X 1.70% 0.625%
6. less than
or equal to 2.5X 3.25% 1.75%
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C. Loan Year 3
LIBOR CBR
CURRENT APPLICABLE APPLICABLE
DSC RATIO MARGIN MARGIN
---------- ---------- ----------
1. greater than 8X 0.50% 0%
2. greater than 6X 0.75% 0%
3. greater than 4X 1.50% 0.125%
4. greater than 3X 1.65% 0.50%
5. greater than 2.5X 1.80% 0.625%
6. less than 2.5X 3.25% 1.75%
D. Loan Year 4
LIBOR CBR
CURRENT APPLICABLE APPLICABLE
DSC RATIO MARGIN MARGIN
---------- ---------- ----------
1. greater than 8X 0.60% 0%
2. greater than 6X 0.85% 0%
3. greater than 4X 1.60% 0.125%
4. greater than 3X 1.75% 0.50%
5. greater than 2.5X 1.90% 0.625%
6. less than
or equal to 2.5X 3.25% 1.75%
The Current DSC Ratio shall be determined quarterly on each March 31,
June 30, September 30 and December 31 (each a "Calculation Date") based on
information contained in the then most recent Form 10Q or Form 10K filed by
Borrower with the Securities Exchange Commission.
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From and after the Public Debt Rating Date, the CBR Applicable Margin
and the LIBOR Applicable Margin to be used in calculating the interest rate
applicable to different Types of Advances shall vary from time to time in
accordance with the Loan Year and the lower of Borrower's then applicable (x)
Moody's debt rating, and (y) S&P's debt rating, as the case may be (e.g., if
the Borrower's Moody's debt rating is Aa2 and its S&P debt rating is AA-, then
the Applicable Margins shall be computed based on the S&P rating), and the
Applicable Margins shall be adjusted effective, (i) in the case of all then
outstanding CBR Advances, on the next Business Day following any change in
Borrower's Moody's debt rating and/or S&P's debt rating, as the case may be,
and (ii) in the case of any then outstanding LIBOR Advances, on the first day
of the next succeeding Interest Period applicable to such LIBOR Advance. The
applicable debt ratings and the Applicable Margins are set forth in the
following tables:
A. Loan Year 1
LIBOR CBR
Applicable Applicable
S&P Rating Xxxxx'x Rating Margin Margin
---------- -------------- -------- --------
1. AA or higher Aa2 or higher 0.30% 0%
2. A+ to AA- A1 to Aa3 0.50% 0%
3. A- to A A3 to A2 1.20% 0%
4. BBB to BBB+ Baa2 to Baa1 1.35% 0.125%
5. BBB- Baa3 1.50% 0.25%
6. Less than BBB- Less than Baa3 3.00% 1.50%
B. Loan Year 2
LIBOR CBR
Applicable Applicable
S&P Rating Xxxxx'x Rating Margin Margin
---------- -------------- -------- --------
1. AA or higher Aa2 or higher 0.40% 0%
2. A- to AA- A1 to Aa3 0.65% 0%
3. A- to A A3 to A2 1.40% 0.125%
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4. BBB to BBB+ Baa2 to Baa1 1.55% 0.25%
5. BBB- Baa3 1.70% 0.375%
6. Less than BBB- Less than Baa3 3.25% 1.75%
C. Loan Year 3
LIBOR CBR
Applicable Applicable
S&P Rating Xxxxx'x Rating Margin Margin
---------- -------------- -------- --------
1. AA or higher Aa2 or higher 0.50% 0%
2. A- to AA- A1 to Aa3 0.75% 0%
3. A- to A A3 to A2 1.50% 0.125%
4. BBB to BBB+ Baa2 to Baa1 1.65% 0.25%
5. BBB- Baa3 1.80% 0.375%
6. Less than BBB- Less than Baa3 3.25% 1.75%
D. Loan Year 4
LIBOR CBR
Applicable Applicable
S&P Rating Xxxxx'x Rating Margin Margin
---------- -------------- -------- --------
1. AA or higher Aa2 or higher 0.60% 0%
2. A- to AA- A1 to Aa3 0.85% 0%
3. A- to A A3 to A2 1.60% 0.125%
4. BBB to BBB+ Baa2 to Baa1 1.75% 0.25%
5. BBB- Baa3 1.90% 0.375%
6. Less than BBB- Less than Baa3 3.25% 1.75%
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2.5. Commitment Fee. The Borrower agrees to pay to the Agent for
the account of each Lender a commitment fee (the "Commitment Fee") equal to
fifteen one hundredths of one percent (0.15%) of the Aggregate Commitment (as
such amount may be changed from time to time pursuant to the terms hereof to an
amount not to exceed the Maximum Aggregate Commitment). The Commitment Fee for
all Lenders who have provided a Commitment as of the Closing Date shall, to the
extent not previously paid, be due and payable on the Closing Date.
2.6. Unused Facility Fee. The Borrower agrees to pay to the Agent
for the account of each Lender an unused facility fee (the "Unused Facility
Fee") equal to the Applicable Percentage (as defined below) multiplied by the
daily unborrowed portion of such Lender's Commitment (calculated as the daily
average of the difference between such Lender's Commitment and the then
outstanding principal balance owed to such Lender for any calculation period)
from the Closing Date to and including the Facility Termination Date, payable
quarterly in arrears on each April 1, July 1, October 1 and January 1 during
the term, and on the Facility Termination Date, in accordance with the
following tables:
A. Prior to the Public Debt Rating Date:
Loan Year 1
Current DSC Ratio Applicable Percentage (per annum)
----------------- ---------------------------------
1. greater than 8X 0.15%
2. greater than 6X 0.20%
3. greater than 4X 0.25%
4. greater than 3X 0.25%
5. greater than 2.5X 0.30%
6. less than
or equal to 2.5X 0.625%
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Loan Years 2, 3 and 4
Current DSC Ratio Applicable Percentage (per annum)
----------------- ---------------------------------
1. greater than 8X 0.20%
2. greater than 6X 0.25%
3. greater than 4X 0.25%
4. greater than 3X 0.30%
5. greater than 2.5X 0.35%
6. less than
or equal to 2.5X 0.625%
B. From and after the Public Debt Rating Date:
Loan Year 1
Applicable Percentage
S&P Rating Xxxxx'x Rating (per annum)
---------- -------------- -------------------
1. AA or higher Aa2 or higher 0.15%
2. A+ to AA- A1 to Aa3 0.20%
3. A- to A A3 to A2 0.25%
4. BBB to BBB+ Baa2 to Baa1 0.25%
5. BBB- Baa3 0.30%
6. Less than BBB- Less than Baa3 0.625%
Loan Years 2, 3 and 4
Applicable Percentage
S&P Rating Xxxxx'x Rating (per annum)
---------- -------------- -------------------
1. AA or higher Aa2 or higher 0.20%
2. A+ to AA- A1 to Aa3 0.25%
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26
3. A- to A A3 to A2 0.25%
4. BBB to BBB+ Baa2 to Baa1 0.30%
5. BBB- Baa3 0.35%
6. Less than BBB- Less than Baa3 0.625%
2.7. Minimum Amount of Each Advance. Each LIBOR Advance shall be
in the minimum amount of $1,000,000 (and in multiples of $250,000 if in excess
thereof), and each CBR Advance shall be in the minimum amount of $1,000,000
(and in multiples of $250,000 if in excess thereof), provided, however, that
any CBR Advance may be in the amount of the unused Aggregate Commitment.
2.8. Optional Principal Payments. The Borrower may from time to
time pay, without penalty or premium, all outstanding Advances, or, in a
minimum aggregate amount of $500,000 or any integral multiple of $250,000 in
excess thereof, any portion of the outstanding Advances upon two Business Days'
prior notice to the Agent; provided however, that the provisions of Section 3.4
hereof shall be applicable to any prepayment of any LIBOR Advance.
2.9. Method of Selecting Types and Interest Periods for New
Advances. The Borrower shall select the Type of Advance and, in the case of
each LIBOR Advance, the Interest Period applicable to each Advance from time to
time. The Borrower shall give the Agent irrevocable notice (a "Borrowing
Notice") not later than 10:00 a.m. (Chicago time) at least one Business Day
before the Borrowing Date of each CBR Advance and three Business Days before
the Borrowing Date for each LIBOR Advance, specifying:
(i) the Borrowing Date, which shall be a Business Day, of
such Advance,
(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected, and
(iv) in the case of each LIBOR Advance, the Interest
Period applicable thereto.
Not later than noon (Chicago time) on each Borrowing Date, each Lender
shall make available its Loan or Loans, in funds immediately available in
Chicago to the Agent at its address specified pursuant to Article VIII. The
Agent will make the funds so received from the Lenders available to the
Borrower at the Agent's aforesaid address.
No Interest Period may end after the Facility Termination Date and,
unless the Lenders otherwise agree in writing, in no event may there be more
than five (5) different Interest Periods for LIBOR Advances outstanding at any
one time.
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2.10. Conversion and Continuation of Outstanding Advances. CBR
Advances shall continue as CBR Advances unless and until such CBR Advances are
converted into LIBOR Advances. Each LIBOR Advance shall continue as a LIBOR
Advance until the end of the then applicable Interest Period therefor, at which
time such LIBOR Advance shall be automatically converted into a CBR Advance
unless the Borrower shall have given the Agent a Conversion/Continuation Notice
requesting that, at the end of such Interest Period, such LIBOR Advance
continue as an LIBOR Advance for the same or another Interest Period. Subject
to the terms of Section 2.7, the Borrower may elect from time to time to
convert all or any part of an Advance of any Type into any other Type or Types
of Advances; provided that any conversion of any LIBOR Advance shall be made
on, and only on, the last day of the Interest Period applicable thereto. The
Borrower shall give the Agent irrevocable notice (a "Conversion/Continuation
Notice") of each conversion of an Advance or continuation of a LIBOR Advance
not later than 10:00 a.m. (Chicago time) at least one Business Day, in the case
of a conversion into a CBR Advance, or three Business Days, in the case of a
conversion into or continuation of a LIBOR Advance, prior to the date of the
requested conversion or continuation, specifying:
(i) the requested date, which shall be a Business Day, of
such conversion or continuation;
(ii) the aggregate amount and Type of the Advance which is
to be converted or continued; and
(iii) the amount and Type(s) of Advance(s) into which such
Advance is to be converted or continued and, in the
case of a conversion into or continuation of a LIBOR
Advance, the duration of the Interest Period
applicable thereto.
2.11. Changes in Interest Rate. Etc. Each CBR Advance shall bear
interest on the outstanding principal amount thereof, for each day from and
including the date such Advance is made or is converted from a LIBOR Advance
into a CBR Advance pursuant to Section 2.10 to but excluding the date it
becomes due or is converted into a LIBOR Advance pursuant to Section 2.10
hereof, at a rate per annum equal to the CBR Rate for such day. Changes in the
rate of interest on that portion of any Advance maintained as a CBR Advance
will take effect simultaneously with each change in the Corporate Base Rate.
Each LIBOR Advance shall bear interest from and including the first day of the
Interest Period applicable thereto to (but not including) the last day of such
Interest Period at the interest rate determined as applicable to such LIBOR
Advance.
2.12. Rates Applicable After Default. Notwithstanding anything to
the contrary contained in Section 2.9 or 2.10, during the continuance of a
Default or Unmatured Default the Required Lenders may, at their option, by
notice to the Borrower (which notice may be revoked at the option of the
Required Lenders notwithstanding any provision of Section 8.2 requiring
unanimous consent of the Lenders to changes in interest rates), declare that no
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Advance may be made as, converted into or continued as a LIBOR Advance. During
the continuance of a Default the Required Lenders may, at their option, by
notice to the Borrower (which notice may be revoked at the option of the
Required Lenders notwithstanding any provision of Section 8.2 requiring
unanimous consent of the Lenders to changes in interest rates), declare that
for the duration of such Default (i) each LIBOR Advance shall bear interest at
the rate otherwise applicable to such Interest Period plus 2% per annum and
(ii) each CBR Advance shall bear interest at a rate per annum equal to the CBR
Rate otherwise applicable to the CBR Advance plus 2% per annum.
2.13. Method of Payment. All payments of the Obligations hereunder
shall be made, without setoff, deduction, or counterclaim, in immediately
available funds to the Agent at the Agent's address specified pursuant to
Article VIII, or at any other Lending Installation of the Agent specified in
writing by the Agent to the Borrower, by noon (local time) on the date when due
and shall be applied ratably by the Agent among the Lenders. Each payment
delivered to the Agent for the account of any Lender shall be delivered
promptly by the Agent to such Lender in the same type of funds that the Agent
received at its address specified pursuant to Article VIII or at any Lending
Installation specified in a notice received by the Agent from such Lender. The
Agent is hereby authorized to charge the account of the Borrower maintained
with First Chicago for each payment of principal, interest and fees as it
becomes due hereunder.
2.14. Notes; Telephonic Notices. Each Lender is hereby authorized
to record the principal amount of each of its Loans and each repayment on the
schedule attached to its Note, provided, however, that the failure to so record
shall not affect the Borrower's obligations under such Note. The Borrower
hereby authorizes the Lenders and the Agent to extend, convert or continue
Advances, effect selections of Types of Advances and to transfer funds based on
telephonic notices made by any person or persons the Agent or any Lender in
good faith believes to be acting on behalf of the Borrower. The Borrower
agrees to deliver promptly to the Agent a written confirmation, if such
confirmation is requested by the Agent or any Lender, of each telephonic notice
signed by an Authorized Officer. If the written confirmation differs from the
action taken by the Agent and the Lenders, the records of the Agent and the
Lenders shall be presumed (rebuttably) accurate.
2.15. Interest Payment Dates; Interest and Fee Basis. Interest
accrued on each CBR Advance shall be payable on each Payment Date, commencing
with the first such date to occur after the date hereof, and at maturity.
Interest accrued on each LIBOR Advance shall be payable on each Payment Date,
commencing with the first such date to occur after the date hereof, on any date
on which the LIBOR Advance is prepaid, whether by acceleration or otherwise,
and at maturity. Interest and commitment fees shall be calculated for actual
days elapsed on the basis of a 360-day year. Interest shall be payable for the
day an Advance is made but not for the day of any payment on the amount paid if
payment is received prior to noon (local time) at the place of payment. If any
payment of principal of or interest on an Advance shall become due on a day
which is not a Business Day, such payment shall be
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29
made on the next succeeding Business Day and, in the case of a principal
payment, such extension of time shall be included in computing interest in
connection with such payment.
2.16. Notification of Advances, Interest Rates and Prepayments.
Promptly after receipt thereof, the Agent will notify each Lender of the
contents of each Borrowing Notice, Conversion/Continuation Notice, and
repayment notice received by it hereunder. The Agent will notify each Lender
of the interest rate applicable to each LIBOR Advance promptly upon
determination of such interest rate and will give each Lender prompt notice of
each change in the Corporate Base Rate.
2.17. Lending Installations. Each Lender may book its Loans at any
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation and the Notes shall be deemed held by each Lender for
the benefit of such Lending Installation. Each Lender may, by written or telex
notice to the Agent and the Borrower, designate a Lending Installation through
which Loans will be made by it and for whose account Loan payments are to be
made.
2.18. Non-Receipt of Funds by the Agent. Unless the Borrower or a
Lender, as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of the Borrower, a payment of principal,
interest or fees to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption.
If such Lender or the Borrower, as the case may be, has not in fact made such
payment to the Agent, the recipient of such payment shall, on demand by the
Agent, repay to the Agent the amount so made available together with interest
thereon in respect of each day during the period commencing on the date such
amount was so made available by the Agent until the date the Agent recovers
such amount at a rate per annum equal to (i) in the case of payment by a
Lender, the Federal Funds Effective Rate for such day or (ii) in the case of
payment by the Borrower, the interest rate applicable to the relevant Loan.
2.19. Withholding Tax Exemption. At least five Business Days prior
to the first date on which interest or fees are payable hereunder for the
account of any Lender, each Lender that is not incorporated under the laws of
the United States of America, or a state thereof, agrees that it will deliver
to each of the Borrower and the Agent two duly completed copies of United
States Internal Revenue Service Form 1001 or 4224, certifying in either case
that such Lender is entitled to receive payments under this Agreement and the
Notes without deduction or withholding of any United States federal income
taxes. Each Lender which so delivers a Form 1001 or 4224 further undertakes to
deliver to each of the Borrower and the Agent two additional copies of such
form (or a successor form) on or before the date that such form expires
(currently, three successive calendar years for Form 1001 and one calendar year
for Form 4224) or becomes obsolete or after the occurrence of any event
requiring a
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30
change in the most recent forms so delivered by it, and such amendments thereto
or extensions or renewals thereof as may be reasonably requested by the
Borrower or the Agent, in each case certifying that such Lender is entitled to
receive payments under this Agreement and the Notes without deduction or
withholding of any United States federal income taxes, unless an event
(including without limitation any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Lender from duly completing and delivering any such form with respect to it and
such Lender advises the Borrower and the Agent that it is not capable of
receiving payments without any deduction or withholding of United States
federal income tax.
2.20. Reduction in Aggregate Commitment. Borrower may from time to
time during the term of this Facility upon prior written notice to Agent, elect
to permanently reduce the amount of the Aggregate Commitment to an amount to be
determined by Borrower; provided, however, that in no event shall Borrower be
entitled to reduce the Aggregate Commitment below $15,000,000 pursuant to this
Section. Each reduction notice from Borrower as described in the preceding
sentence shall be accompanied by payment of any amounts (including any amounts
payable by Borrower pursuant to Article III hereof) necessary to reduce the
outstanding balance of the Advances to the amount specified in such notice.
Each reduction of the Aggregate Commitment shall reduce each Lender's
Commitment on a pro rata basis.
ARTICLE III
CHANGE IN CIRCUMSTANCES
3.1. Yield Protection. If any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive (whether or
not having the force of law), or any interpretation thereof, or the compliance
of any Lender therewith,
(i) subjects any Lender or any applicable Lending
Installation to any tax, duty, charge or withholding
on or from payments due from the Borrower (excluding
(i) federal taxation of the net income of any Lender
or applicable Lending Installation, (ii) state and
local taxation in the jurisdiction where a Lender's
home office is situated, (iii) state and local
taxation in a jurisdiction other than described in
(ii) above to the extent such Lender receives credit
on its tax payments in its home jurisdiction for such
taxes, and (iv) federal withholding tax imposed on
payments due hereunder or under the Notes), or
changes the basis of taxation of payments to any
Lender in respect of its Loans or other amounts due
it hereunder, or
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31
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or
similar requirement against assets of, deposits with
or for the account of, or credit extended by, any
Lender or any applicable Lending Installation (other
than reserves and assessments taken into account in
determining the interest rate applicable to LIBOR
Advances), or
(iii) imposes any other condition the result of which is to
increase the cost to any Lender or any applicable
Lending Installation of making, funding or
maintaining loans or reduces any amount receivable by
any Lender or any applicable Lending Installation in
connection with loans, or requires any Lender or any
applicable Lending Installation to make any payment
calculated by reference to the amount of loans held
or interest received by it, by an amount deemed
material by such Lender,
then, within 30 days of demand by such Lender, the Borrower shall pay such
Lender that portion of such increased expense incurred or reduction in an
amount received which such Lender determines is attributable to making, funding
and maintaining its Loans and its Commitment.
3.2. Changes in Capital Adequacy Regulations. If a Lender
reasonably determines the amount of capital required or expected to be
maintained by such Lender, any Lending Installation of such Lender or any
corporation controlling such Lender is increased as a result of a Change (as
hereinafter defined), then, within 30 days of demand by such Lender, the
Borrower shall pay such Lender the amount necessary to compensate for any
shortfall in the rate of return on the portion of such increased capital which
such Lender determines is attributable to this Agreement, its Loans or its
obligation to make Loans hereunder (after taking into account such Lender's
policies as to capital adequacy). "Change" means (i) any change after the date
of this Agreement in the Risk-Based Capital Guidelines or (ii) any adoption of
or change in any other law, governmental or quasi-governmental rule,
regulation, policy, guideline, interpretation, or directive (whether or not
having the force of law) after the date of this Agreement which affects the
amount of capital required or expected to be maintained by any Lender or any
Lending Installation or any corporation controlling any Lender. "Risk-Based
Capital Guidelines" means (i) the risk-based capital guidelines in effect in
the United States on the date of this Agreement, including transition rules,
and (ii) the corresponding capital regulations promulgated by regulatory
authorities outside the United States implementing the July 1988 report of the
Basle Committee on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital Standards,"
including transition rules, and any amendments to such regulations adopted
prior to the date of this Agreement.
3.3. Availability of LIBOR Advances. If any Lender reasonably
determines that maintenance of any of its LIBOR Loans at a suitable Lending
Installation would violate any applicable law, rule, regulation or directive,
whether or not having the force of law, the Agent
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shall suspend the availability of LIBOR Advances and require any LIBOR Advances
to be converted into CBR Advances; or if the Required Lenders reasonably
determine that (i) deposits of a type or maturity appropriate to match fund
LIBOR Advances are not available, the Agent shall suspend the availability of
LIBOR Advances with respect to any Advances made after the date of any such
determination, or (ii) an interest rate applicable to a LIBOR Advance does not
accurately reflect the cost of making a LIBOR Advance, then, if for any reason
whatsoever the provisions of Section 3.1 are inapplicable, the Agent shall
suspend the availability of LIBOR Advances with respect to any Advances made
after the date of any such determination.
3.4. Funding Indemnification. If any payment of a LIBOR Advance
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment or otherwise, or a LIBOR Advance is
not made on the date specified by the Borrower for any reason other than
default by the Lenders, the Borrower will indemnify each Lender for any loss or
cost incurred by it resulting therefrom, including, without limitation, any
loss or cost in liquidating or employing deposits acquired to fund or maintain
the LIBOR Advance.
3.5. Lender Statements; Survival of Indemnity. To the extent
reasonably possible, each Lender shall designate an alternate Lending
Installation with respect to its LIBOR Loans to reduce any liability of the
Borrower to such Lender under Sections 3.1 and 3.2 or to avoid the
unavailability of a LIBOR Advance under Section 3.3, so long as such
designation is not disadvantageous to such Lender. Each Lender shall deliver a
written statement of such Lender as to the amount due, if any, under Sections 3
1, 3.2 or 3.4. Such written statement shall set forth in reasonable detail the
calculations upon which such Lender determined such amount and shall be
presumed (rebuttably) correct. Determination of amounts payable under such
Sections in connection with a LIBOR Loan shall be calculated as though each
Lender funded its LIBOR Loan through the purchase of a deposit of the type and
maturity corresponding to the deposit used as a reference in determining the
LIBOR Rate applicable to such Loan, whether in fact that is the case or not.
Unless otherwise provided herein, the amount specified in the written statement
shall be payable on demand after receipt by the Borrower of the written
statement. The obligations of the Borrower under Sections 3.1, 3.2 and 3.4
shall survive payment of the Obligations and termination of this Agreement.
3.6 Replacement of Lender by Reason of Change in Circumstances.
In the event that any Lender (a "Recovery Lender") requires Borrower to make
any payment to such Recovery Lender in accordance with the provisions of
Sections 3.1 and/or 3.2 hereof, then upon written notice from Borrower to
Agent, Borrower and Agent shall mutually use their respective best efforts to
find another lender to replace the Recovery Lender. If a replacement lender is
found then Borrower shall pay to the Recovery Lender all amounts owed to such
Recovery Lender under the Facility, such Recovery Lender shall no longer be a
"Lender" hereunder, and concurrently therewith the remaining parties hereto
shall execute such instruments as shall be necessary to have the replacement
lender become a "Lender" hereunder having a Commitment equal to that of the
Recovery Lender.
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Nothing contained in this Section 3.6 shall be deemed to relieve
Borrower of its obligations to make all payments to any Recovery Lender in the
amounts and at the times required pursuant to the terms of this Agreement
during the period of time prior to the replacement of such Recovery Lender.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. Initial Advance. The Lenders shall not be required to make
the initial Advance hereunder unless the Borrower shall have furnished to the
Agent, with sufficient copies for the Lenders, the following:
(i) The duly executed originals of the Loan Documents,
including the Notes, payable to the order of each of
the Lenders, and this Agreement;
(ii) A certificate of good standing for the Borrower,
certified by the appropriate governmental officer of
the District of Columbia, and foreign qualification
certificates, certified by the appropriate
governmental officer, for each jurisdiction where the
failure to so qualify or be licensed (if required)
would have a Material Adverse Effect;
(iii) Copies, certified by an officer of the Borrower, of
its formation documents (including by-laws), together
with all amendments thereto;
(iv) An incumbency certificate, executed by an officer of
the Borrower, which shall identify by name and title
and bear the signature of the Persons authorized to
sign the Loan Documents and to make borrowings
hereunder on behalf of the Borrower, upon which
certificate the Agent and the Lenders shall be
entitled to rely until informed of any change in
writing by the Borrower;
(v) Copies, certified by the Secretary or Assistant
Secretary, of the Borrower's Board of Directors'
resolutions (and resolutions of other bodies, if any
are deemed necessary by counsel for any Lender)
authorizing the Advances provided for herein and the
execution, delivery and performance of the Loan
Documents to be executed and delivered by the
Borrower hereunder;
(vi) A written opinion of the Borrower's counsel,
addressed to the Lenders in substantially the form of
Exhibit B hereto;
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(vii) A certificate, signed by an officer of the Borrower,
stating that on the initial Borrowing Date no Default
or Unmatured Default has occurred and is continuing
and that all representations and warranties of the
Borrower are true and correct as of the initial
Borrowing Date;
(viii) The most recent financial statements of the Borrower
and a certificate from an officer of the Borrower
that no material adverse change in the Borrower's
financial condition has occurred since the date of
such statements;
(ix) UCC financing statement, judgment, and tax lien
searches with respect to the Borrower from the State
of Maryland;
(x) Written money transfer instructions, in substantially
the form of Exhibit E hereto, addressed to the Agent
and signed by an Authorized Officer, together with
such other related money transfer authorizations as
the Agent may have reasonably requested; and
(xi) Such other documents as any Lender or its counsel may
have reasonably requested, the form and substance of
which documents shall be acceptable to the parties
and their respective counsel.
4.2. Each Advance. The Lenders shall not be required to make any
Advance (other than an Advance that, after giving effect thereto and to the
application of the proceeds thereof, does not increase the aggregate amount of
outstanding Advances), unless on the applicable Borrowing Date:
(i) There exists no Default or Unmatured Default;
(ii) The representations and warranties contained in
Article V are true and correct in all material
respects as of such Borrowing Date with respect to
Borrower and to any Subsidiary in existence on such
Borrowing Date, except to the extent any such
representation or warranty is stated to relate solely
to an earlier date, in which case such representation
or warranty shall be true and correct on and as of
such earlier date; and
(iii) All legal matters incident to the making of such
Advance shall be reasonably satisfactory to the
Lenders and their counsel and shall impose no burden
on the Borrower greater than as set forth in Section
4.1 hereof.
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35
Each Borrowing Notice with respect to each such Advance shall
constitute a representation and warranty by the Borrower that the conditions
contained in Sections 4.2(i) and (ii) have been satisfied. Any Lender may
require a duly completed compliance certificate in substantially the form of
Exhibit C hereto as a condition to making an Advance.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
5.1. Existence. Borrower is a real estate investment trust duly
organized and validly existing under the laws of the District of Columbia, with
its principal place of business in Kensington, Maryland, and is duly qualified
as a foreign real estate investment trust, properly licensed (if required), in
good standing and has all requisite authority to conduct its business in each
jurisdiction in which its business is conducted and in which the failure to be
qualified would have a Material Adverse Effect.
5.2. Authorization and Validity. The Borrower has the power and
authority and legal right to execute and deliver the Loan Documents and to
perform its obligations thereunder. The execution and delivery by the Borrower
of the Loan Documents and the performance of its obligations thereunder have
been duly authorized by proper proceedings, and the Loan Documents constitute
legal, valid and binding obligations of the Borrower enforceable against the
Borrower in accordance with their terms, except as enforceability may be
limited by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally.
5.3. No Conflict; Government Consent. Neither the execution and
delivery by the Borrower of the Loan Documents, nor the consummation of the
transactions therein contemplated, nor compliance with the provisions thereof
will violate any law, rule, regulation, order, writ, judgment, injunction,
decree or award binding on the Borrower, or the provisions of any indenture,
investment or agreement to which the Borrower is a party or is subject, or by
which it, or its Property, is bound, or conflict with or constitute a default
thereunder, or result in the creation or imposition of any Lien in, of or on
the Property of the Borrower pursuant to the terms of any such indenture,
instrument or agreement. No order, consent, approval, license, authorization,
or validation of, or filing, recording or registration with, or exemption by,
any governmental or public body or authority, or any subdivision thereof, is
required to authorize, or is required in connection with the execution,
delivery and performance of, or the legality, validity, binding effect or
enforceability of, any of the Loan Documents.
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36
5.4. Material Adverse Change. Since December 31, 1994, there has
been no change in the business, Property, prospects, condition (financial or
otherwise) or results of operations of the Borrower which could have a Material
Adverse Effect.
5.5. Taxes. The Borrower has filed all United States federal tax
returns and all other tax returns which are required to be filed and have paid
all taxes due pursuant to said returns or pursuant to any assessment received
by the Borrower except such taxes, if any, as are being contested in good faith
and as to which adequate reserves have been provided. No tax liens have been
filed and no claims are being asserted with respect to any such taxes. The
charges, accruals and reserves on the books of the Borrower in respect of any
taxes or other governmental charges are adequate.
5.6. Litigation and Guarantee Obligations. There is no litigation,
arbitration, governmental investigation, proceeding or inquiry pending or, to
the knowledge of any of their officers, threatened against or affecting the
Borrower which could have a Material Adverse Effect. The Borrower has no
material contingent obligations not provided for or disclosed in the financial
statements referred to in Section 6.4.
5.7. No Subsidiaries. There are no presently existing Subsidiaries
of the Borrower.
5.8. ERISA. The Unfunded Liabilities of all Single Employer Plans
do not in the aggregate exceed $100,000. Neither the Borrower nor any other
member of the Controlled Group has incurred, or is reasonably expected to
incur, any withdrawal liability to Multiemployer Plans in excess of $100,000 in
the aggregate. Each Plan complies in all material respects with all applicable
requirements of law and regulations, no Reportable Event has occurred with
respect to any Plan, neither the Borrower nor any other members of the
Controlled Group has withdrawn from any Plan or initiated steps to do so, and
no steps have been taken to reorganize or terminate any Plan.
5.9. Accuracy of Information. No information, exhibit or report
furnished by the Borrower to the Agent or to any Lender in connection with the
negotiation of, or compliance with, the Loan Documents contained any material
misstatement of fact or omitted to state a material fact or any fact necessary
to make the statements contained therein not misleading.
5.10. Regulation U. Margin stock (as defined in Regulation U)
constitutes less than 25% of those assets of the Borrower which are subject to
any limitation on sale, pledge, or other restriction hereunder.
5.11. Material Agreements. The Borrower is not subject to any
charter or other corporate restriction which could have a Material Adverse
Effect. The Borrower is not in material default in the performance, observance
or fulfillment of any of the obligations, covenants or conditions contained in
(i) any agreement to which it is a party, which default could have a Material
Adverse Effect or (ii) any agreement or instrument evidencing or governing
Indebtedness.
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5.12. Compliance With Laws. The Borrower has complied in all
material respects with all applicable statutes, rules, regulations, orders and
restrictions of any domestic or foreign government or any instrumentality or
agency thereof, having jurisdiction over the conduct of their respective
businesses or the ownership of their respective Property. The Borrower has not
received any notice to the effect that its operations are not in material
compliance with any of the requirements of applicable federal, state and local
environmental, health and safety statutes and regulations or the subject of any
federal or state investigation evaluating whether any remedial action is needed
to respond to a release of any toxic or hazardous waste or substance into the
environment, which non-compliance or remedial action could have a Material
Adverse Effect.
5.13. Ownership of Properties. Except as set forth on Schedule 3
hereto, on the date of this Agreement, the Borrower has good title, free of all
Liens other than those permitted by Section 7.18, to all of the Property and
assets reflected in the financial statements as owned by it.
5.14. Investment Company Act. The Borrower is not an "investment
company" or a company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940, as amended.
5.15. Public Utility Holding Company Act. The Borrower is not a
"holding company" or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company," within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
5.16. Solvency. (i) Immediately after the Closing Date and
immediately following the making of each Loan and after giving effect to the
application of the proceeds of such Loans, (a) the fair value of the assets of
the Borrower and its Subsidiaries (if any) on a consolidated basis, at a fair
valuation, will exceed the debts and liabilities, subordinated, contingent or
otherwise, of the Borrower and its Subsidiaries, if any, on a consolidated
basis; (b) the present fair saleable value of the property of the Borrower and
its Subsidiaries on a consolidated basis will be greater than the amount that
will be required to pay the probable liability of the Borrower and its
Subsidiaries, if any, on a consolidated basis on their debts and other
liabilities, subordinated, contingent or otherwise, as such debts and other
liabilities become absolute and matured; (c) the Borrower and its Subsidiaries,
if any, on a consolidated basis will be able to pay their debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (d) the Borrower and its
Subsidiaries, if any, on a consolidated basis will not have unreasonably small
capital with which to conduct the businesses in which they are engaged as such
businesses are now conducted and are proposed to be conducted after the date
hereof.
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(ii) The Borrower does not intend to incur debts beyond its ability
to pay such debts as they mature, taking into account the timing of and amounts
of cash to be received by it and the timing of the amounts of cash to be
payable on or in respect of its Indebtedness or the Indebtedness.
5.17. Insurance. The Borrower carries insurance on its Property
with financially sound and reputable insurance companies, in such amounts, with
such deductibles and covering such risks as are customarily carried by
companies engaged in similar businesses and owning similar Property in
localities where the Borrower operates, including, without limitation:
(i) Property and casualty insurance (including coverage
for flood and other water damage for any Properties
located within a 100-year flood plain) in the amount
of the replacement cost of the improvements at the
Properties;
(ii) Loss of rental income insurance in the amount not
less than one year's gross revenues from the
Properties; and
(iii) Comprehensive general liability insurance in the
amount of $20,000,000 per occurrence.
5.18. REIT Status. The Borrower is in good standing on the American
Stock Exchange, is qualified as a real estate investment trust and currently is
in compliance with all applicable provisions of the Code.
ARTICLE VI
COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
6.1. Financial Reporting. The Borrower will maintain, for itself
and each Subsidiary, a system of accounting established and administered in
accordance with GAAP, and furnish to the Lenders:
(i) Within 45 days after the close of each fiscal
quarter, for the Borrower and its Subsidiaries, an
unaudited balance sheet as of the close of each such
period and profit and loss and reconciliation of
surplus statements and a statement of cash flows for
the period from the beginning of the fiscal year to
the end of such quarter, all certified by the
Borrower's chief financial officer or chief
accounting officer;
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(ii) Together with the financial statements required
hereunder, a compliance certificate in substantially
the form of Exhibit C hereto signed by the Borrower's
chief financial officer or chief accounting officer
showing the calculations necessary to determine
compliance with this Agreement and stating that no
Default or Unmatured Default exists, or if any
Default or Unmatured Default exists, stating the
nature and status thereof;
(iii) Within 45 days after the close of each fiscal
quarter, for themselves and their Subsidiaries,
related reports in form and substance satisfactory to
the Lenders, all certified by the entity's chief
financial officer or chief accounting officer,
including a statement of Funds From Operations,
listing of capital expenditures, a report listing and
describing all newly acquired Properties, including
their net operating income, cost and mortgage debt,
if any, and summary Property information and such
other information as may be reasonably requested;
(v) Within 90 days after the close of each fiscal year,
for the Borrower and its Subsidiaries, audited
financial statements, including a balance sheet as of
the close of each such period and profit and loss and
reconciliation of surplus statements and a statement
of cash flows for the period, all audited and
certified by independent accountants (which
accountants shall be reasonably satisfactory to
Agent) as fairly presenting the financial position
and results of operations and its cash flows as of
the end of such fiscal year for such entities in
accordance with GAAP;
(iv) As soon as possible and in any event within 10 days
after the Borrower knows that any Reportable Event
has occurred with respect to any Plan, a statement,
signed by the chief financial officer of the
Borrower, describing said Reportable Event and the
action which the Borrower proposes to take with
respect thereto;
(v) As soon as possible and in any event within 10 days
after receipt by the Borrower, a copy of (a) any
notice or claim to the effect that the Borrower or
any of its Subsidiaries is or may be liable to any
Person as a result of the release by the Borrower,
any of its Subsidiaries, or any other Person of any
toxic or hazardous waste or substance into the
environment, and (b) any notice alleging any
violation of any federal, state or local
environmental, health or safety law or regulation by
the Borrower or any of its Subsidiaries, which, in
either case, could have a Material Adverse Effect;
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(vi) Promptly upon the furnishing thereof to the
shareholders of the Borrower, copies of all financial
statements, reports and proxy statements so
furnished;
(vii) Promptly upon the filing thereof, copies of all
registration statements and annual, quarterly,
monthly or other reports and any other public
information which the Borrower or any of its
Subsidiaries files with the Securities Exchange
Commission; and
(viii) Such other information (including, without
limitation, financial statements for the Borrower and
non-financial information) as the Agent or any Lender
may from time to time reasonably request.
6.2. Use of Proceeds. The Borrower will, and will cause each of
its Subsidiaries to, use the proceeds of the Advances for the general business
purposes of the Borrower, including working capital needs and interim financing
for property acquisitions, and to repay outstanding Advances. The Borrower
will not, nor will it permit any Subsidiary to, use any of the proceeds of the
Advances to purchase or carry any "margin stock" (as defined in Regulation U)
or to make any Acquisition other than a Permitted Acquisition.
6.3. Notice of Default. The Borrower will, and will cause each of
its Subsidiaries to, give prompt notice in writing to the Lenders of the
occurrence of any Default or Unmatured Default and of any other development,
financial or otherwise, which could have a Material Adverse Effect.
6.4. Conduct of Business. The Borrower will, and will cause each
of its Subsidiaries to, (i) do all things necessary to remain duly incorporated
or duly qualified, validly existing and in good standing as a real estate
investment trust, domestic corporation or limited partnership, as the case may
be, in its jurisdiction of incorporation/formation and maintain all requisite
authority to conduct its business in each jurisdiction in which its business is
conducted and in which the failure to be qualified would have a Material
Adverse Effect, (ii) to carry on and conduct their businesses in substantially
the same manner as they are presently conducted, and (iii) not undertake any
business other than the development, ownership, management and operation of
apartment buildings, office buildings, shopping centers, business centers, and
warehouses, and ancillary businesses specifically related to such properties.
6.5. Taxes. The Borrower will, and will cause each of its
Subsidiaries to, pay when due all taxes, assessments and governmental charges
and levies upon them of their income, profits or Property, except those which
are being contested in good faith by appropriate proceedings and with respect
to which adequate reserves have been set aside.
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6.6. Insurance. The Borrower will, and will cause each of its
Subsidiaries to, maintain with financially sound and reputable insurance
companies insurance on all their Property in such amounts and covering such
risks as is consistent with sound business practice, and the Borrower will
furnish to any Lender upon request full information as to the insurance
carried.
6.7. Compliance with Laws. The Borrower will, and will cause each
of its Subsidiaries to, comply with all laws, rules, regulations, orders,
writs, judgments, injunctions, decrees or awards to which they may be subject.
6.8. Maintenance of Properties. The Borrower will, and will cause
each of its Subsidiaries to, do all things necessary to maintain, preserve,
protect and keep its Property in good repair, working order and condition, and
make all necessary and proper repairs, renewals and replacements so that their
businesses carried on in connection therewith may be properly conducted at all
times.
6.9. Inspection. The Borrower will, and will cause each of its
Subsidiaries to, permit the Lenders, by their respective representatives and
agents, to inspect any of the Property, corporate books and financial records
of the Borrower and each of its Subsidiaries, to examine and make copies of the
books of accounts and other financial records of the Borrower and each of its
Subsidiaries, and to discuss the affairs, finances and accounts of the Borrower
and each of its Subsidiaries, and to be advised as to the same by, their
respective officers at such reasonable times and intervals as the Lenders may
designate.
6.10. Maintenance of Status. The Borrower shall at all times (i)
remain a corporation listed and in good standing on the American Stock
Exchange, and (ii) maintain its status as a real estate investment trust in
compliance with all applicable provisions of the Code.
6.11. Dividends. The Borrower and its Subsidiaries shall be
permitted declare and pay any dividends on its Capital Stock from time to time
in amounts determined by Borrower, provided that at the time of such
declaration and/or payment (i) the ratio of annualized EBITDA (determined by
multiplying (x) EBITDA for the then most recently ended fiscal quarter, by (y)
four) to Consolidated Total Indebtedness exceeds 0.25, and (ii) the Value of
Unencumbered Assets is at least 3.0 times the Consolidated Unsecured
Indebtedness. In the event that Borrower and its Subsidiaries are not in
compliance with the provisions of the preceding sentence, then in no event
shall Borrower or any of its Subsidiaries declare or pay any dividends on its
Capital Stock if in any period of four fiscal quarters, such dividends, in the
aggregate, would exceed 95% of the Borrower's Funds From Operations for such
period; provided, however, that the Borrower shall be permitted at all times to
distribute whatever amount is necessary to maintain its tax status as a real
estate investment trust.
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6.12. Merger. The Borrower will not, nor will it permit any of its
Subsidiaries to, enter into any merger, consolidation, reorganization or
liquidation or transfer or otherwise dispose of all or a Substantial Portion of
their Properties, except for such transactions that occur between Wholly-Owned
Subsidiaries or as otherwise approved in advance by the Lenders, provided,
however, that mergers shall be permitted as a means for the Borrower to acquire
additional Properties or ancillary businesses specifically related to
Properties so long as such merger is not accomplished through a hostile
takeover and the Borrower is the surviving entity.
6.13. Delivery of Subsidiary Guaranties. Borrower shall promptly
notify Agent of any planned formation or acquisition of any Subsidiary. Within
10 days after Borrower forms or acquires any Subsidiary, Borrower shall cause
such Subsidiary to execute and deliver to the Lender's a guaranty agreement
(together with such other documents as the Lenders shall reasonably request)
whereby such Subsidiary agrees that it shall be jointly and severally liable
for all Obligations of the Borrower under the Loan Documents. The guaranty
agreement and such other documents each shall be in form and substance
satisfactory to the Lenders.
6.14. Sale of Accounts. The Borrower will not, nor will it permit
any of its Subsidiaries to, sell or otherwise dispose of any notes receivable
or accounts receivable, with or without recourse.
6.15. Sale and Leaseback. The Borrower will not, nor will it permit
any of its Subsidiaries to, sell or transfer any of its Property in order to
concurrently or subsequently lease as lessee such or similar Property.
6.16. Acquisitions and Investments. Without the prior written
consent of the Required Lenders, the Borrower will not, nor will it permit any
of its Subsidiaries to:
(i) make any Acquisition, except mergers permitted
pursuant to Section 6.12:
(ii) by a single transaction or through a series of
related transactions make any acquisition of property
if the cost of such property would be more than
$50,000,000 for any such property;
(iii) make any investments in, or loans or advances to, any
unconsolidated Person to the extent such investments,
loans and advances in the aggregate would exceed ten
percent (10%) of their Total Tangible Assets on a
consolidated basis.
Acquisitions permitted pursuant to this Section 6.16 shall be deemed to be
"Permitted Acquisitions."
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6.17. Liens. The Borrower will not, nor will it permit any of its
Subsidiaries to, create, incur, or suffer to exist any Lien in, of or on the
Property of the Borrower or any of its Subsidiaries, except:
(i) Liens for taxes, assessments or governmental charges
or levies on its Property if the same shall not at
the time be delinquent or thereafter can be paid
without penalty, or are being contested in good faith
and by appropriate proceedings and for which adequate
reserves shall have been set aside on its books;
(ii) Liens imposed by law, such as carriers',
warehousemen's and mechanics' liens and other similar
liens arising in the ordinary course of business
which secure payment of obligations not more than 60
days past due or which are being contested in good
faith by appropriate proceedings and for which
adequate reserves shall have been set aside on its
books;
(iii) Liens arising out of pledges or deposits under
worker's compensation laws, unemployment insurance,
old age pensions, or other social security or
retirement benefits, or similar legislation;
(iv) Utility easements, building restrictions and such
other encumbrances or charges against real property
as are of a nature generally existing with respect to
properties of a similar character and which do not in
any material way affect the marketability of the same
or interfere with the use thereof in the business of
the Borrower or its Subsidiaries;
(v) Liens existing on the date hereof and described in
Schedule 2 hereto; and
(vi) Liens arising in connection with any Indebtedness
permitted hereunder.
Notwithstanding anything contained in this Agreement to the contrary, Borrower
may from time to time encumber its Properties with Liens in addition to those
set forth in clauses (i) through (vi) above, provided that the granting or
existence of such other Liens shall not cause Borrower to be in breach of the
provisions of Section 6.21 hereof.
Liens permitted pursuant to this Section 6.17 shall be deemed to be "Permitted
Liens."
6.18. Affiliates. The Borrower will not, nor will it permit any of
their Subsidiaries to, enter into any transaction (including, without
limitation, the purchase or sale of any Property or service) with, or make any
payment or transfer to, any Affiliate except in the ordinary course of business
and pursuant to the reasonable requirements of the Borrower's or such
Subsidiary's business and upon fair and reasonable terms no less favorable to
the
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Borrower or such Subsidiary than the Borrower or such Subsidiary would obtain
in a comparable arms-length transaction.
6.19. Cash Flow to Debt Service Ratio. The Borrower on a
consolidated basis with its Subsidiaries shall maintain a Cash Flow to Debt
Service Ratio of not less than 2.5. Such test must be satisfied as of the end
of each fiscal quarter, based on annualized results for the preceding two
fiscal quarters.
6.20. Consolidated Tangible Net Worth. The Borrower on a
consolidated basis with its Subsidiaries shall maintain a Consolidated Tangible
Net Worth of not less than the sum of (i) $125,000,000 plus (ii) fifty percent
(50%) of the aggregate proceeds received by the Borrower (net of actual related
fees and expenses) in connection with any offering of stock in the Borrower
after the Closing Date.
6.21. Indebtedness and Cash Flow Covenants. The Borrower on a
consolidated basis with its Subsidiaries shall not, as of the last day of any
fiscal quarter, permit:
(i) Consolidated Total Indebtedness to exceed forty
percent (40%) of Total Tangible Assets;
(ii) Consolidated Secured Indebtedness to exceed fifteen
percent (15%) of Total Tangible Assets;
(iii) the Value of Unencumbered Assets to be less than 2.25
times the Consolidated Senior Unsecured Indebtedness;
(iv) annualized EBITDA (determined by multiplying (x) the
sum of EBITDA for the two most recently ended fiscal
quarters, by (y) two) to be less than twenty percent
(20%) of Consolidated Total Indebtedness; and
(v) the Value of Unencumbered Assets (excluding Office
Building Assets which constitute Unencumbered Assets)
to be less than 1.5 times the Consolidated Senior
Unsecured Indebtedness.
ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
7.1. Any representation or warranty made or deemed made by or on
behalf of the Borrower or any of its Subsidiaries to the Lenders or the Agent
under or in connection with
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this Agreement, any Loan, or any certificate or information delivered in
connection with this Agreement or any other Loan Document shall be materially
false on the date as of which made.
7.2. Nonpayment of principal of any Note when due, or nonpayment of
interest upon any Note or of any commitment fee or other obligations under any
of the Loan Documents within five Business Days after the same becomes due.
7.3. The breach of any of the terms or provisions of Sections 6.2,
6.11, 6.12, 6.14, 6.15, 6.16, 6.19, 6.20, and 6.21 hereof.
7.4. The breach by the Borrower (other than a breach which
constitutes a Default under Section 7.1, 7.2, or 7.3) of any of the terms or
provisions of this Agreement which is not remedied within thirty days after
written notice from the Agent or any Lender.
7.5. Failure of the Borrower or any of its Subsidiaries to pay when
due any "recourse" Indebtedness (i.e., Indebtedness which is recoverable from
the general assets of the Borrower and/or its Subsidiaries) which is
outstanding in an aggregate amount of at least $5,000,000; or the default by
the Borrower or any of its Subsidiaries in the performance of any term,
provision or condition contained in any agreement under which such "recourse"
Indebtedness was created or is governed, or any other event shall occur or
condition exist, the effect of which is to cause such "recourse" Indebtedness
to become due prior to its stated maturity; or any "recourse" Indebtedness of
the Borrower or any of its Subsidiaries (other than "recourse" Indebtedness
which is "due on demand") shall be declared to be due and payable or required
to be prepaid (other than by a regularly scheduled payment) prior to the stated
maturity thereof; or the Borrower or any of its Subsidiaries shall not pay, or
admit in writing its inability to pay, its debts generally as they become due.
7.6. The Borrower or any of its Subsidiaries that has more than
$10,000,000 of Total Tangible Assets shall (i) have an order for relief entered
with respect to it under the Federal bankruptcy laws as now or hereafter in
effect, (ii) make an assignment for the benefit of creditors, (iii) apply for,
seek, consent to, or acquiesce in, the appointment of a receiver, custodian,
trustee, examiner, liquidator or similar official for it or any Substantial
Portion of its Property, (iv) institute any proceeding seeking an order for
relief under the Federal bankruptcy laws as now or hereafter in effect or
seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other pleading
denying the material allegations of any such proceeding filed against it, (v)
take any corporate action to authorize or effect any of the foregoing actions
set forth in this Section 7.6 or (vi) fail to contest in good faith any
appointment or proceeding described in Section 7.7.
7.7. A receiver, trustee, examiner, liquidator or similar official
shall be appointed for the Borrower or any Subsidiary that has more than
$10,000,000 of Total Tangible Assets
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46
or any Substantial Portion of their Property, or a proceeding described in
Section 7.6(iv) shall be instituted against the Borrower or any such Subsidiary
and such appointment continues undischarged or such proceeding continues
undismissed or unstayed for a period of 30 consecutive days.
7.8. Any court, government or governmental agency shall condemn,
seize or otherwise appropriate, or take custody or control of (each a
"Condemnation"), all or any portion of the Property of the Borrower and its
Subsidiaries which, when taken together with all other Property of the Borrower
and its Subsidiaries so condemned, seized, appropriated, or taken custody or
control of, during the twelve-month period ending with the month in which any
such Condemnation occurs, constitutes a Substantial Portion of their Property.
7.9. The Borrower or any of its Subsidiaries shall fail within 30
days to pay, bond or otherwise discharge any judgment or order for the payment
of money in excess of $5,000,000, which is not stayed on appeal or otherwise
being appropriately contested in good faith.
7.10. The Unfunded Liabilities of all Single Employer Plans shall
exceed in the aggregate $100,000 or any Reportable Event shall occur in
connection with any Plan.
7.11. The Borrower or any other member of the Controlled Group shall
have been notified by the sponsor of a Multiemployer Plan that it has incurred
withdrawal liability to such Multiemployer Plan in an amount which, when
aggregated with all other amounts required to be paid to Multiemployer Plans by
the Borrower or any other member of the Controlled Group as withdrawal
liability (determined as of the date of such notification), exceeds $100,000 or
requires payments exceeding $1,000,000 per annum.
7.12. The Borrower or any other member of the Controlled Group shall
have been notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or is being terminated, within the
meaning of Title IV of ERISA, if as a result of such reorganization or
termination the aggregate annual contributions of the Borrower and the other
members of the Controlled Group (taken as a whole) to all Multiemployer Plans
which are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for the
respective plan years of each such Multiemployer Plan immediately preceding the
plan year in which the reorganization or termination occurs by an amount
exceeding $100,000.
7.13. Failure to remediate within the time period permitted by law
or governmental order (or within a reasonable time give the nature of the
problem if no specific time period has been given) material environmental
problems related to Properties whose aggregate book values are in excess of
$20,000,000 or where the estimated cost of remediation is in the aggregate in
excess of $100,000, in each case after all administrative hearings and appeals
have been concluded.
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7.14. The occurrence of any default under any Loan Document or the
breach of any of the terms or provisions of any Loan Document, which default or
breach continues beyond any period of grace therein provided.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1. Acceleration. If any Default described in Section 7.6 or 7.7
occurs with respect to the Borrower, the obligations of the Lenders to make
Loans hereunder shall automatically terminate and the Obligations shall
immediately become due and payable without any election or action on the part
of the Agent or any Lender. If any other Default occurs, the Required Lenders
may terminate or suspend the obligations of the Lenders to make Loans
hereunder, or declare the Obligations to be due and payable, or both, whereupon
the Obligations shall become immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which the Borrower hereby
expressly waives.
If, within 10 days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Loans
hereunder as a result of any Default (other than any Default as described in
Section 7.6 or 7.7 with respect to the Borrower) and before any judgment or
decree for the payment of the Obligations due shall have been obtained or
entered, the Required Lenders (in their sole discretion) shall so direct, the
Agent shall, by notice to the Borrower, rescind and annul such acceleration
and/or termination.
8.2. Amendments. Subject to the provisions of this Article VIII,
the Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Borrower may enter into agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Lenders or the Borrower hereunder or waiving
any Default hereunder; provided, however, that no such supplemental agreement
shall, without the consent of each Lender affected thereby:
(i) Extend the maturity of any Loan or Note or forgive
all or any portion of the principal amount thereof,
or reduce the rate or extend the time of payment of
interest or fees thereon.
(ii) Reduce the percentage specified in the definition of
Required Lenders.
(iii) Extend the Facility Termination Date or reduce the
amount or extend the payment date for, the mandatory
payments required under Section 2.2 (other than as
provided for under Section 2.2), or increase the
amount of the Commitment of any Lender hereunder, or
permit the Borrower to assign its rights under this
Agreement.
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(iv) Amend this Section 8.2.
Notwithstanding any provision contained in this Section 8.2, the Aggregate
Commitment may be increased prior to the Facility Termination Date (up to the
Maximum Aggregate Commitment) solely by the consent of the Borrower and each
Lender whose Commitment is being increased. No amendment of any provision of
this Agreement relating to the Agent shall be effective without the written
consent of the Agent.
8.3. Preservation of Rights. No delay or omission of the Lenders
or the Agent to exercise any right under the Loan Documents shall impair such
right or be construed to be a waiver of any Default or an acquiescence therein,
and the making of a Loan notwithstanding the existence of a Default or the
inability of the Borrower to satisfy the conditions precedent to such Loan
shall not constitute any waiver or acquiescence. Any single or partial
exercise of any such right shall not preclude other or further exercise thereof
or the exercise of any other right, and no waiver, amendment or other variation
of the terms, conditions or provisions of the Loan Documents whatsoever shall
be valid unless in writing signed by the Lenders required pursuant to Section
8.2, and then only to the extent in such writing specifically set forth. All
remedies contained in the Loan Documents or by law afforded shall be cumulative
and all shall be available to the Agent and the Lenders until the Obligations
have been paid in full.
ARTICLE IX
GENERAL PROVISIONS
9.1. Survival of Representations. All representations and
warranties of the Borrower contained in this Agreement shall survive delivery
of the Notes and the making of the Loans herein contemplated.
9.2. Governmental Regulation. Anything contained in this Agreement
to the contrary notwithstanding, no Lender shall be obligated to extend credit
to the Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
9.3. Taxes. Any taxes (excluding (i) federal taxation of the net
income of any Lender or applicable Lending Installation, (ii) state and local
taxation in the jurisdiction where a Lender's home office is situated, (iii)
state and local taxation in a jurisdiction other than described in (ii) above
to the extent such Lender receives credit on its tax payments in its home
jurisdiction for such taxes, and (iv) federal withholding tax imposed on
payments due hereunder or under the Notes) or other similar assessments or
charges made by any governmental or revenue authority in respect of the Loan
Documents shall be paid by the Borrower when due (and Agent shall forward to
Borrower copies of any notices of such taxes promptly following Agent's receipt
of any such notices).
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9.4. Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any
of the provisions of the Loan Documents.
9.5. Entire Agreement. The Loan Documents embody the entire
agreement and understanding among the Borrower, the Agent and the Lenders and
supersede all prior commitments, agreements and understandings among the
Borrower, the Agent and the Lenders relating to the subject matter thereof.
9.6. Several Obligations; Benefits of this Agreement. The
respective obligations of the Lenders hereunder are several and not joint and
no Lender shall be the partner or agent of any other (except to the extent to
which the Agent is authorized to act as such). The failure of any Lender to
perform any of its obligations hereunder shall not relieve any other Lender
from any of its obligations hereunder. This Agreement shall not be construed
so as to confer any right or benefit upon any Person other than the parties to
this Agreement and their respective successors and assigns.
9.7. Expenses; Indemnification. The Borrower shall reimburse the
Agent for any costs, internal charges and out-of-pocket expenses (including,
without limitation, all reasonable fees for consultants and reasonable fees and
reasonable expenses for attorneys for the Agent, which attorneys may be
employees of the Agent) paid or incurred by the Agent in connection with the
preparation, negotiation, execution, delivery, review, amendment, modification,
and administration of the Loan Documents; provided that the provisions of
Section 12.2.1 and 12.3.1 shall govern with respect to payment of the fees and
expenses associated with the sale of participating interests in, and
assignments of, the Loans. The Borrower also agrees to reimburse the Agent and
the Lenders for any costs, internal charges and out-of-pocket expenses
(including, without limitation, all reasonable fees and reasonable expenses for
attorneys for the Agent and the Lenders, which attorneys may be employees of
the Agent or the Lenders) paid or incurred by the Agent or any Lender in
connection with the collection and enforcement of the Loan Documents
(including, without limitation, any workout). The Borrower further agrees to
indemnify the Agent and each Lender, its directors, officers and employees
against all losses, claims, damages, penalties, judgments, liabilities and
expenses (including, without limitation, all expenses of litigation or
preparation therefor whether or not the Agent or any Lender is a party thereto)
which any of them may pay or incur arising out of or relating to this
Agreement, the other Loan Documents, the Properties, the transactions
contemplated hereby or the direct or indirect application or proposed
application of the proceeds of any Loan hereunder, except that the foregoing
indemnity shall not apply to a Lender to the extent that any losses, claims,
damages, penalties, judgments, liabilities and expenses are the result of such
Lender's gross negligence or willful misconduct. The obligations of the
Borrower under this Section shall survive the termination of this Agreement.
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9.8. Numbers of Documents. All statements, notices, closing
documents, and requests hereunder shall be furnished to the Agent with
sufficient counterparts so that the Agent may furnish one to each of the
Lenders.
9.9. Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with GAAP, except that any
calculation or determination which is to be made on a consolidated basis shall
be made for the Borrower and all its Subsidiaries, including those
Subsidiaries, if any, which are unconsolidated on the Borrower's official
financial statements.
9.10. Severability of Provisions. Any provision in any Loan
Document that is held to be inoperative, unenforceable, or invalid in any
jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or
invalid without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
9.11. Nonliability of Lenders. The relationship between the
Borrower, on the one hand, and the Lenders and the Agent, on the other, shall
be solely that of borrower and lender. Neither the Agent nor any Lender shall
have any fiduciary responsibilities to the Borrower. Neither the Agent nor any
Lender undertakes any responsibility to the Borrower to review or inform the
Borrower of any matter in connection with any phase of the Borrower's business
or operations.
9.12. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE
CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE
OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
9.13. CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR
ILLINOIS STATE COURT SITTING IN CHICAGO IN ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES
THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR
HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT
IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN
SHALL LIMIT THE RIGHT OF THE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST
THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING
BY THE BORROWER AGAINST THE AGENT OR ANY LENDER OR ANY AFFILIATE OF THE AGENT
OR ANY LENDER INVOLVING, DIRECTLY OR
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INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.
9.14. WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT AND EACH LENDER
HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.
ARTICLE X
THE AGENT
10.1. Appointment. The First National Bank of Chicago is hereby
appointed Agent hereunder and under each other Loan Document, and each of the
Lenders irrevocably authorizes the Agent to act as the agent of such Lender.
The Agent agrees to act as such upon the express conditions contained in this
Article X. The Agent shall not have a fiduciary relationship in respect of the
Borrower or any Lender by reason of this Agreement.
10.2. Powers. The Agent shall have and may exercise such powers
under the Loan Documents as are specifically delegated to the Agent by the
terms of each thereof, together with such powers as are reasonably incidental
thereto. The Agent shall have no implied duties to the Lenders, or any
obligation to the Lenders to take any action thereunder except any action
specifically provided by the Loan Documents to be taken by the Agent.
10.3. General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Borrower, the Lenders or
any Lender for (i) any action taken or omitted to be taken by it or them
hereunder or under any other Loan Document or in connection herewith or
therewith except for its or their own gross negligence or willful misconduct;
or (ii) any determination by the Agent that compliance with any law or any
governmental or quasi-governmental rule, regulation, order, policy, guideline
or directive (whether or not having the force of law) requires the Advances and
Commitments hereunder to be classified as being part of a "highly leveraged
transaction."
10.4. No Responsibility for Loans, Recitals, etc. Neither the Agent
nor any of its directors, officers, agents or employees shall be responsible
for or have any duty to ascertain, inquire into, or verify (i) any statement,
warranty or representation made in connection with any Loan Document or any
borrowing hereunder; (ii) the performance or observance of any of the covenants
or agreements of any obligor under any Loan Document, including, without
limitation, any agreement by an obligor to furnish information directly to each
Lender; (iii) the satisfaction of any condition specified in Article IV, except
receipt of items required to be
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delivered to the Agent; (iv) the validity, effectiveness or genuineness of any
Loan Document or any other instrument or writing furnished in connection
therewith; or (v) the value, sufficiency, creation, perfection or priority of
any interest in any collateral security. The Agent shall have no duty to
disclose to the Lenders information that is not required to be furnished by the
Borrower to the Agent at such time, but is voluntarily furnished by the
Borrower to the Agent (either in its capacity as Agent or in its individual
capacity).
10.5. Action on Instructions of Lenders. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder and
under any other Loan Document in accordance with written instructions signed by
the Required Lenders, and such instructions and any action taken or failure to
act pursuant thereto shall be binding on all of the Lenders and on all holders
of Notes. The Agent shall be fully justified in failing or refusing to take
any action hereunder and under any other Loan Document unless it shall first be
indemnified to its satisfaction by the Lenders pro rata against any and all
liability, cost and expense that it may incur by reason of taking or continuing
to take any such action.
10.6. Employment of Agents and Counsel. The Agent may execute any
of its duties as Agent hereunder and under any other Loan Document by or
through employees, agents, and attorneys-in-fact and shall not be answerable to
the Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning all matters pertaining to the agency hereby created and its
duties hereunder and under any other Loan Document.
10.7. Reliance on Documents; Counsel. The Agent shall be entitled
to rely upon any Note, notice, consent, certificate, affidavit, letter,
telegram, statement, paper or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and, in
respect to legal matters, upon the opinion of counsel selected by the Agent,
which counsel may be employees of the Agent.
10.8. Agent's Reimbursement and Indemnification. The Lenders agree
to reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (i) for any amounts not reimbursed by the Borrower for which the
Agent is entitled to reimbursement by the Borrower under the Loan Documents,
(ii) for any other expenses incurred by the Agent on behalf of the Lenders, in
connection with the preparation, execution, delivery, administration and
enforcement of the Loan Documents and (iii) for any liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of the Loan Documents or any other document delivered in connection therewith
or the transactions contemplated thereby, or the enforcement of any of the
terms thereof or of any such other documents, provided that no Lender shall be
liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the Agent. The obligations of the Lenders
under this Section 10.8 shall survive payment of the Obligations and
termination of this Agreement.
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10.9. Rights as a Lender. In the event the Agent is a Lender, the
Agent shall have the same rights and powers hereunder and under any other Loan
Document as any Lender and may exercise the same as though it were not the
Agent, and the term "Lender" or "Lenders" shall, at any time when the Agent is
a Lender, unless the context otherwise indicates, include the Agent in its
individual capacity. The Agent may accept deposits from, lend money to, and
generally engage in any kind of trust, debt, equity or other transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with the Borrower or any of its Subsidiaries in which the Borrower or such
Subsidiary is not restricted hereby from engaging with any other Person. The
Agent, in its individual capacity, is not obligated to remain a Lender.
10.10. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender and based
on the financial statements prepared by the Borrower and such other documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and the other Loan Documents. Each
Lender also acknowledges that it will, independently and without reliance upon
the Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement and the other Loan
Documents.
10.11. Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower, such resignation to be
effective upon the appointment of a successor Agent or, if no successor Agent
has been appointed, forty-five days after the retiring Agent gives notice of
its intention to resign. Upon any such resignation, the Required Lenders shall
have the right to appoint, on behalf of the Borrower and the Lenders, a
successor Agent. If no successor Agent shall have been so appointed by the
Required Lenders within thirty days after the resigning Agent's giving notice
of its intention to resign, then the resigning Agent may appoint, on behalf of
the Borrower and the Lenders, a successor Agent. If the Agent has resigned and
no successor Agent has been appointed, the Lenders may perform all the duties
of the Agent hereunder and the Borrower shall make all payments in respect of
the Obligations to the applicable Lender and for all other purposes shall deal
directly with the Lenders. No successor Agent shall be deemed to be appointed
hereunder until such successor Agent has accepted the appointment. Any such
successor Agent shall be a commercial bank having capital and retained earnings
of at least $50,000,000. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
resigning Agent. Upon the effectiveness of the resignation of the Agent, the
resigning Agent shall be discharged from its duties and obligations hereunder
and under the Loan Documents. After the effectiveness of the resignation of an
Agent, the provisions of this Article XI shall continue in effect for the
benefit of such Agent in respect of any actions taken or omitted to be taken by
it while it was acting as the Agent hereunder and under the other Loan
Documents.
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10.12. Commitment as a Lender. First Chicago agrees to provide a
Commitment of at least $10,000,000 so long as First Chicago remains as Agent;
provided, that the foregoing agreement of First Chicago shall not apply to
assignments of all or any portion of First Chicago's Commitment which are made
at any time following a Default by Borrower hereunder and prior to the cure or
waiver of such Default.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1. Setoff. In addition to, and without limitation of, any rights
of the Lenders under applicable law, if a Default occurs, any and all deposits
(including all account balances, whether provisional or final and whether or
not collected or available) and any other Indebtedness at any time held or
owing by any Lender to or for the credit or account of the Borrower may be
offset and applied toward the payment of the Obligations owing to such Lender,
whether or not the Obligations, or any part hereof, shall then be due.
11.2. Ratable Payments. If any Lender, whether by setoff or
otherwise, has payment made to it upon its Loans (other than payments received
pursuant to Sections 3.1, 3.2 or 3.4) in a greater proportion than that
received by any other Lender, such Lender agrees, promptly upon demand, to
purchase a portion of the Loans held by the other Lenders so that after such
purchase each Lender will hold its ratable proportion of Loans. If any Lender,
whether in connection with setoff or amounts which might be subject to setoff
or otherwise, receives collateral or other protection for its Obligations or
such amounts which may be subject to setoff, such Lender agrees, promptly upon
demand, to take such action necessary such that all Lenders share in the
benefits of such collateral ratably in proportion to their Loans. In case any
such payment is disturbed by legal process, or otherwise, appropriate further
adjustments shall be made.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATION
12.1. Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and
the Lenders and their respective successors and assigns, except that (i) the
Borrower shall not have the right to assign its rights or obligations under the
Loan Documents and (ii) any assignment by any Lender must be made in compliance
with Section 12.3. Notwithstanding clause (ii) of this Section, any Lender may
at any time, without the consent of the Borrower or the Agent, assign all or
any portion of its rights under this Agreement and its Notes to a Federal
Reserve Bank; provided, however, that no such assignment shall release the
transferor Lender from its obligations hereunder. The Agent may treat the
payee of any Note as the owner thereof for
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all purposes hereof unless and until such payee complies with Section 12.3 in
the case of an assignment thereof or, in the case of any other transfer, a
written notice of the transfer is filed with the Agent. Any assignee or
transferee of a Note agrees by acceptance thereof to be bound by all the terms
and provisions of the Loan Documents. Any request, authority or consent of any
Person, who at the time of making such request or giving such authority or
consent is the holder of any Note, shall be conclusive and binding on any
subsequent holder, transferee or assignee of such Note or of any Note or Notes
issued in exchange therefor.
12.2. Participations.
12.2.1 Permitted Participants; Effect. Any Lender may, in
the ordinary course of its business and in accordance with applicable
law, at any time sell to one or more financial institutions, pension
funds, or any other fund or entity that regularly makes or
participates in real estate loans as part of its business
("Participants") participating interests in any Loan owing to such
Lender, any Note held by such Lender, any Commitment of such Lender or
any other interest of such Lender under the Loan Documents. In the
event of any such sale by a Lender of participating interests to a
Participant, such Lender's obligations under the Loan Documents shall
remain unchanged, such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, such
Lender shall remain the holder of any such Note for all purposes under
the Loan Documents, all amounts payable by the Borrower under this
Agreement shall be determined as if such Lender had not sold such
participating interests, and the Borrower and the Agent shall continue
to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under the Loan Documents.
Notwithstanding anything contained in this Agreement to the contrary,
Borrower shall not be obligated to pay any fees and expenses incurred
by any Lender in connection with the sale of any participating
interests in any Loan pursuant to this Section.
12.2.2. Voting Rights. Each Lender shall retain the sole
right to approve, without the consent of any Participant, any
amendment, modification or waiver of any provision of the Loan
Documents other than any amendment, modification or waiver with
respect to any Loan or Commitment in which such Participant has an
interest which forgives principal, interest or fees or reduces the
interest rate or fees payable with respect to any such Loan or
Commitment, postpones any date fixed for any regularly-scheduled
payment of principal of, or interest or fees on, any such Loan or
Commitment, releases any guarantor of any such Loan or releases any
substantial portion of collateral, if any, securing any such Loan.
12.2.3. Benefit of Setoff. The Borrower agrees each
Participant (where Borrower has received at least thirty (30) days'
prior notice of the existence of such Participant) shall be deemed to
have the right of setoff provided in Section 11.1 in respect of its
participating interest in amounts owing under the Loan Documents to
the same extent as if the amount of its participating interest were
owing directly to it as a
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Lender under the Loan Documents, provided that each Lender shall
retain the right of setoff provided in Section 11.1 with respect to
the amount of participating interests sold to each such Participant.
The Lenders agree to share with each such Participant, and each
Participant, by exercising the right of setoff provided in Section
12.1, agrees to share with each Lender, any amount received pursuant
to the exercise of its right of setoff, such amounts to be shared in
accordance with Section 11.2 as if each such Participant were a
Lender.
12.3. Assignments.
12.3.1. Permitted Assignments. Any Lender may, in the
ordinary course of its business and in accordance with applicable law,
at any time assign to one or more financial institutions, pension
funds, or any other fund or entity that regularly makes or
participates in real estate loans as part of its business
("Purchasers") all or any portion (greater than or equal to $5,000,000
per assignee) of its rights and obligations under the Loan Documents.
Such assignment shall be substantially in the form of Exhibit D hereto
or in such other form as may be agreed to by the parties thereto. The
consent of the Agent shall be required prior to an assignment becoming
effective with respect to a Purchaser which is not a Lender or an
Affiliate thereof. Such consent shall not be unreasonably withheld.
Notwithstanding anything contained in this Agreement to the contrary,
Borrower shall not be obligated to pay any fees and expenses incurred
by any Lender in connection with any assignment of any portion of the
initial $25,000,000 Maximum Aggregate Commitment pursuant to this
Section; Borrower shall pay all of Agent's reasonable fees and
expenses in connection with any future assignments of amounts
representing increases in the Aggregate Commitment above the initial
$25,000,000 Maximum Aggregate Commitment.
12.3.2. Effect; Effective Date. Upon (i) delivery to the
Agent of a notice of assignment, substantially in the form attached as
Exhibit I to Exhibit D hereto (a "Notice of Assignment"), together
with any consents required by Section 12.3.1, and (ii) payment by the
assigning party of a $2,500 fee to the Agent for processing such
assignment, such assignment shall become effective on the effective
date specified in such Notice of Assignment. The Notice of Assignment
shall contain a representation by the Purchaser to the effect that
none of the consideration used to make the purchase of the Commitment
and Loans under the applicable assignment agreement are "plan assets"
as defined under ERISA and that the rights and interests of the
Purchaser in and under the Loan Documents will not be "plan assets"
under ERISA. On and after the effective date of such assignment, such
Purchaser shall for all purposes be a Lender party to this Agreement
and any other Loan Document executed by the Lenders and shall have all
the rights and obligations of a Lender under the Loan Documents, to
the same extent as if it were an original party hereto, and no further
consent or action by the Borrower, the Lenders or the Agent shall be
required to release the transferor Lender with respect to the
percentage of the Aggregate Commitment and Loans assigned to such
Purchaser. Upon the
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consummation of any assignment to a Purchaser pursuant to this Section
12.3.2, the transferor Lender, the Agent and the Borrower shall make
appropriate arrangements so that replacement Notes are issued to such
transferor Lender and new Notes or, as appropriate, replacement Notes,
are issued to such Purchaser, in each case in principal amounts
reflecting their Commitment, as adjusted pursuant to such assignment.
12.4. Dissemination of Information. The Borrower authorize each
Lender to disclose to any Participant or Purchaser or any other Person
acquiring an interest in the Loan Documents by operation of law (each a
"Transferee") and any prospective Transferee any and all information in such
Lender's possession concerning the creditworthiness of the Borrower and its
Subsidiaries.
12.5. Tax Treatment. If any interest in any Loan Document is
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the transferor
Lender shall cause such Transferee, concurrently with the effectiveness of such
transfer, to comply with the provisions of Section 2.19.
ARTICLE XIII
NOTICES
13.1. Giving Notice. Except as otherwise permitted by Section 2.14
with respect to borrowing notices, all notices and other communications
provided to any party hereto under this Agreement or any other Loan Document
shall be in writing or by facsimile and addressed or delivered to such party at
its address set forth below its signature hereto or at such other address as
may be designated by such party in a notice to the other parties. Any notice
transmitted by facsimile, shall be deemed given when received according to the
recipient's automatically generated answerback. Any notice transmitted by
Federal Express or other recognized overnight courier shall be presumed
(rebuttably) given the business day after it is sent. Any other notice shall
be effective only when actually received.
13.2. Change of Address. The Borrower, the Agent and any Lender may
each change the address for service of notice upon it by a notice in writing to
the other parties hereto.
ARTICLE XIV
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has
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been executed by the Borrower, the Agent and the Lender and each party has
notified the Agent by telex or telephone, that it has taken such action.
ARTICLE XV
NO OFFICER, ETC. LIABILITY
No trustee, officer or agent of the trust shall be held to any
personal liability whatsoever, in tort, contract or otherwise, in connection
with the transactions contemplated by this Agreement.
IN WITNESS WHEREOF, the Borrower, the Lender and the Agent have
executed this Agreement as of the date first above written.
WASHINGTON REAL ESTATE
INVESTMENT TRUST
By:
------------------------------------
Print Name: Xxxxxx X. Xxxxxx, Xx.
Title: President and Chief Operating
Officer
00000 Xxxxxxxxxxx Xxxxxx, Xxxxxxxxx
Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
phone: 000-000-0000
facsimile: 000-000-0000
Attention: Xxxxxx X. Xxxxxx, Xx.
Commitments
-----------
$25,000,000 THE FIRST NATIONAL BANK OF
CHICAGO, Individually and as Agent
By:
------------------------------------
Print Name: Xxxxx X. Xxxxx
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Title: Vice President
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Real Estate Finance
Department
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