Exhibit 10.28
SECOND AMENDED AND RESTATED
LOAN AGREEMENT
AMONG
MHC OPERATING LIMITED PARTNERSHIP,
AN ILLINOIS LIMITED PARTNERSHIP,
AS BORROWER,
EQUITY LIFESTYLE PROPERTIES, INC.,
A MARYLAND CORPORATION,
AS A GUARANTOR,
MHC TRUST,
A MARYLAND REAL ESTATE INVESTMENT TRUST,
AS A GUARANTOR
MHC T1000 TRUST,
A MARYLAND REAL ESTATE INVESTMENT TRUST,
AS A GUARANTOR
AND
XXXXX FARGO BANK, N.A.,
AS LENDER
DATED AS OF JULY 14, 2006
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TABLE OF CONTENTS
PAGE
----
ARTICLE I. DEFINITIONS................................................... 1
1.01 Certain Defined Terms............................................ 1
1.02 Computation of Time Periods...................................... 21
1.03 Terms............................................................ 21
1.04 Interrelationship With the Existing Loan Agreement............... 21
ARTICLE II. LOANS........................................................ 22
2.01 Loan Advances and Repayment...................................... 22
2.02 Borrowing and Interest Rate Election Authorization............... 23
2.03 Interest on the Loans............................................ 24
2.04 Fees............................................................. 28
2.05 Payments......................................................... 28
2.06 Increased Capital................................................ 29
2.07 Notice of Increased Costs........................................ 29
2.08 Funds Transfer Disbursements..................................... 30
ARTICLE III. EXTENSION OPTION............................................ 30
3.01 Extension Option................................................. 30
ARTICLE IV. CONDITIONS TO LOANS.......................................... 31
4.01 Intentionally Omitted............................................ 31
4.02 Conditions Precedent to All Loans................................ 31
ARTICLE V. REPRESENTATIONS AND WARRANTIES................................ 32
5.01 Representations and Warranties as to Borrower.................... 32
5.02 Representations and Warranties as to the REIT.................... 37
5.03 Representations and Warranties as to MHC Trust................... 40
5.04 Representations and Warranties as to T1000 Trust................. 42
ARTICLE VI. REPORTING COVENANTS.......................................... 43
6.01 Financial Statements and Other Financial and
Operating Information............................................ 43
6.02 Press Releases; SEC Filings and Financial Statements............. 45
6.03 Environmental Notices............................................ 46
6.04 Qualifying Unencumbered Properties............................... 46
ARTICLE VII. AFFIRMATIVE COVENANTS....................................... 46
7.01 With respect to Borrower:........................................ 46
7.02 With respect to the REIT:........................................ 49
7.03 With respect to MHC Trust:....................................... 50
ARTICLE VIII. NEGATIVE COVENANTS......................................... 50
8.01 With respect to Borrower:........................................ 50
8.02 With respect to the REIT:........................................ 55
8.03 With respect to MHC Trust:....................................... 57
8.04 With respect to T1000 Trust...................................... 58
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ARTICLE IX. FINANCIAL COVENANTS.......................................... 59
9.01 Total Liabilities to Gross Asset Value........................... 59
9.02 EBITDA to Fixed Charges Ratio.................................... 59
9.03 Unencumbered Net Operating Income to Unsecured Interest Expense.. 59
9.04 Unencumbered Pool................................................ 59
9.05 Minimum Net Worth................................................ 59
9.06 Permitted Holdings............................................... 59
9.07 Calculation...................................................... 60
ARTICLE X. EVENTS OF DEFAULT; RIGHTS AND REMEDIES........................ 60
10.01 Events of Default................................................ 60
10.02 Rights and Remedies.............................................. 64
10.03 Suspension of Lending............................................ 65
ARTICLE XI. [INTENTIONALLY DELETED]...................................... 65
ARTICLE XII. MISCELLANEOUS............................................... 65
12.01 Expenses......................................................... 65
12.02 Indemnity........................................................ 66
12.03 Change in Accounting Principles.................................. 67
12.04 Setoff........................................................... 67
12.05 Amendments and Waivers........................................... 68
12.06 Independence of Covenants........................................ 68
12.07 Notices and Delivery............................................. 68
12.08 Survival of Warranties, Indemnities and Agreements............... 68
12.09 Failure or Indulgence Not Waiver; Remedies Cumulative............ 68
12.10 Marshalling; Recourse to Security; Payments Set Aside............ 68
12.11 Severability..................................................... 69
12.12 Headings......................................................... 69
12.13 Governing Law.................................................... 69
12.14 Limitation of Liability.......................................... 69
12.15 Successors and Assigns........................................... 69
12.16 Usury Limitation................................................. 69
12.17 Confidentiality.................................................. 70
12.18 Consent to Jurisdiction and Service of Process; Waiver of Jury
Trial; Waiver Of Permissive Counterclaims........................ 70
12.19 Counterparts; Effectiveness; Inconsistencies..................... 71
12.20 Construction..................................................... 71
12.21 Entire Agreement................................................. 71
12.22 Lender's Action for Its Own Protection Only...................... 71
12.23 Lender's ERISA Covenant.......................................... 72
12.24 Pledge to Federal Reserve Bank................................... 72
12.25 USA Patriot Act Notice; Compliance............................... 72
12.26 Tax Shelter Regulations.......................................... 73
12.27 Document Delivery................................................ 73
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EXHIBITS
A - [Intentionally Deleted]
B - [Intentionally Deleted]
C - Transfer Authorizer Designation
D - Revolving Loan Note
E - [Intentionally Deleted]
F - Qualifying Unencumbered Properties
G - [Intentionally Deleted]
H - [Intentionally Deleted]
I - Notice of Borrowing
J - Notice of Continuation/Conversion
SCHEDULES
5.01(c) - Ownership of Borrower
5.01(r) - Environmental Matters
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SECOND AMENDED AND RESTATED LOAN AGREEMENT
THIS SECOND AMENDED AND RESTATED LOAN AGREEMENT is dated as of July
14, 2006 (as amended, supplemented or modified from time to time, the
"Agreement") and is among MHC Operating Limited Partnership, an Illinois limited
partnership ("Borrower"), Equity Lifestyles Properties, Inc., a Maryland
corporation (the "REIT"), MHC Trust, a Maryland real estate investment trust
("MHC Trust"), MHC T1000 Trust, a Maryland real estate investment trust, and
Xxxxx Fargo Bank, N.A ("Lender").
RECITALS
A. Borrower, the REIT (f/k/a Manufactured Home Communities, Inc.), MHC
Trust and Lender have previously entered into that certain Loan Agreement dated
as of May 4, 2004 (the "Original Loan Agreement").
B. Borrower, the REIT, MHC Trust, T1000 Trust and the Lender modified
certain provisions of the original Loan Agreement pursuant to that certain First
Amended and Restated Loan Agreement, dated as of November 10, 2004 (the
"Existing Loan Agreement").
C. Borrower, the REIT, MHC Trust, MHC T1000 and Lender desire to amend
and restate the Existing Loan Agreement in its entirety to make certain
modifications as hereinafter set forth.
NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
AGREEMENT
ARTICLE I.
DEFINITIONS
1.01 Certain Defined Terms. The following terms used in this Agreement
shall have the following meanings (such meanings to be applicable, except to the
extent otherwise indicated in a definition of a particular term, both to the
singular and the plural forms of the terms defined):
"Accommodation Obligations" as applied to any Person, means any
obligation, contingent or otherwise, of that Person in respect of which that
Person is liable for any Indebtedness or other obligation or liability of
another Person, including without limitation and without duplication (i) any
such Indebtedness, obligation or liability directly or indirectly guaranteed,
endorsed (otherwise than for collection or deposit in the ordinary course of
business), co-made or discounted or sold with recourse by that Person, or in
respect of which that Person is otherwise directly or indirectly liable,
including Contractual Obligations (contingent or otherwise) arising through any
agreement to purchase, repurchase or otherwise acquire such Indebtedness,
obligation or liability or any security therefor, or to provide funds for the
payment or discharge thereof (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), or to maintain solvency, assets,
level of income, or other financial condition, or to make payment other than for
value received and (ii) any obligation of such Person arising through such
Person's status as a general partner of a general or limited
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partnership with respect to any Indebtedness, obligation or liability of such
general or limited partnership.
"Accountants" means any nationally recognized independent accounting
firm.
"Adjusted Asset Value" means, as of any date of determination, (i) for
any Property for which the number of Owned Fiscal Quarters is less than four
(4), the Net Price of the Property paid by Borrower or such Subsidiary for such
Property and (ii) for any Property for which the number of Owned Fiscal Quarters
is at least four (4), the quotient of EBITDA attributable to such Property in a
manner reasonably acceptable to Lender for the then most recently ended twelve
(12) calendar month period divided by seven one-hundredths (0.07).
"Affiliates" as applied to any Person, means any other Person directly
or indirectly controlling, controlled by, or under common control with, that
Person. For purposes of this definition, "control" (including with correlative
meanings, the terms "controlling," "controlled by" and "under common control
with"), as applied to any Person, means (a) the possession, directly or
indirectly, of the power to vote twenty-five percent (25%) or more of the
Securities having voting power for the election of directors of such Person or
otherwise to direct or cause the direction of the management and policies of
that Person, whether through the ownership of voting Securities or by contract
or otherwise, (b) the ownership of a general partnership interest in such Person
or (c) the ownership of twenty-five percent (25%) or more of the limited
partnership interests (or other ownership interests with similarly limited
voting rights) in such Person; provided, however, that in no event shall the
Affiliates of Borrower or any Subsidiary or any Investment Affiliate include
Persons holding direct or indirect ownership interests in the REIT, MHC Trust or
any other real estate investment trust which holds a general partnership
interest in Borrower if such Person does not otherwise constitute an "Affiliate"
of Borrower hereunder; provided, further, that the REIT, MHC Trust, T1000 Trust
and Borrower shall at all times be deemed Affiliates of each other.
"Agreement" has the meaning ascribed to such term in the preamble
hereto.
"Agreement Party" means any Person, other than the REIT and Borrower,
which concurrently with the execution of this Agreement or hereafter executes
and delivers a guaranty or a joinder to a guaranty in connection with this
Agreement, which as of the date of determination, is in force and effect.
"Applicable Margin" means, for any day, the rate per annum set forth
below opposite the applicable Level Period then in effect:
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Level Period Applicable Margin
------------ -----------------
Level I Period 0.80%
Level II Period 0.85%
Level III Period 1.00%
Level IV Period 1.10%
Level V Period 1.20%
Level VI Period 1.30%
The Applicable Margin shall be adjusted for all purposes quarterly as soon as
reasonably practicable, but not later than five (5) days, after the date of
receipt by Lender of the quarterly financial information in accordance with the
provisions of Section 6.01(a), together with a calculation by Borrower of the
ratio of Total Liabilities to the sum of Gross Asset Values for Borrower and
each of its Subsidiaries as of the end of the applicable Fiscal Quarter. No
adjustment in the Applicable Margin shall be made retroactively.
"Balloon Payment" means, with respect to any loan constituting
Indebtedness, any required principal payment of such loan which is either (i)
payable at the maturity of such loan or (ii) in an amount which exceeds
twenty-five percent (25%) of the original principal amount of such loan;
provided, however, that the final payment of a fully amortizing loan shall not
constitute a Balloon Payment.
"Base Rate" means, on any day, a fluctuating interest rate per annum
as shall be in effect from time to time, which rate shall at all times be equal
to the higher of (a) the base rate of interest per annum established from time
to time by Lender, and designated as its prime rate and in effect on such day,
and (b) the Federal Funds Rate as announced by the Federal Reserve Bank of New
York, in effect on such day plus one half percent (0.5%) per annum. Each change
in the Base Rate shall become effective automatically as of the opening of
business on the date of such change in the Base Rate, without prior written
notice to Borrower. The Base Rate may not be the lowest rate of interest charged
by any bank or Lender on similar loans.
"Base Rate Loans" means those Loans bearing interest at the Base Rate.
"Base Rent" means the aggregate rent received, on a consolidated
basis, by Borrower or any Subsidiary from tenants which lease sites at
Designated Use Properties owned by Borrower or any Subsidiary minus any amounts
specifically identified as and representing payments for trash removal, cable
television, water, electricity, other utilities, taxes and other rent which
reimburses expenses related to the tenant's occupancy; provided, however, that
Base Rent shall not include rent received by any Subsidiary as lessor under the
Thousand Trails Lease.
"Benefit Plan" means any employee pension benefit plan as defined in
Section 3(2) of ERISA (other than a Multiemployer Plan) which a Person or any
ERISA Affiliate maintains, administers, contributes to or is required to
contribute to, or, within the immediately
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preceding five (5) years, maintained, administered, contributed to or was
required to contribute to, or under which a Person or any ERISA Affiliate may
have any liability.
"Borrower" has the meaning ascribed to such term in the preamble
hereto.
"Borrower Plan" shall mean any Plan (A) which Borrower, any of its
Subsidiaries or any of its ERISA Affiliates maintains, administers, contributes
to or is required to contribute to, or, within the five years prior to the
Closing Date, maintained, administered, contributed to or was required to
contribute to, or under which Borrower, any of its Subsidiaries or any of its
ERISA Affiliates may incur any liability and (B) which covers any employee or
former employee of Borrower, any of its Subsidiaries or any of its ERISA
Affiliates (with respect to their relationship with such entities).
"Borrower's Adjusted Share" means Borrower's, MHC Trust's and/or the
REIT's collective direct or indirect share of the assets, liabilities, income,
expenses or expenditures, as applicable, of an Investment Affiliate based upon
the greater of (i) Borrower's, MHC Trust's and/or the REIT's percentage
ownership (whether direct or indirect) of such Investment Affiliate, as provided
in the charter and by-laws, partnership agreements or other organizational or
governing documents of such Investment Affiliate and (ii) Borrower's and/or the
REIT's percentage ownership (whether direct or indirect) of such Investment
Affiliate, based upon its effective economic ownership of such Investment
Affiliate. For purposes of determining Borrower's Adjusted Share, at any time
that MHC Trust owns any general partnership interest in Borrower in accordance
with the terms and conditions of this Agreement, the REIT shall be deemed to own
one hundred percent (100%) of all ownership interests in MHC Trust.
"Borrower's Share" means Borrower's, MHC Trust's and/or the REIT's
collective direct or indirect share of the assets, liabilities, income, expenses
or expenditures, as applicable, of an Investment Affiliate based upon
Borrower's, MHC Trust's and/or the REIT's percentage ownership (whether direct
or indirect) of such Investment Affiliate, as the case may be. For purposes of
determining Borrower's Share, at any time that MHC Trust owns any general
partnership interest in Borrower in accordance with the terms and conditions of
this Agreement, the REIT shall be deemed to own one hundred percent (100%) of
all ownership interests in MHC Trust.
"Borrowing" means a borrowing under the Facility.
"Business Day" means (a) with respect to any Borrowing, payment or
rate determination of LIBOR Loans, a day, other than a Saturday or Sunday, on
which Lender is open for business in Chicago and San Francisco and on which
dealings in Dollars are carried on in the London inter bank market, and (b) for
all other purposes any day excluding Saturday, Sunday and any day which is a
legal holiday under the laws of the States of California and Illinois, or is a
day on which banking institutions located in California and Illinois are
required or authorized by law or other governmental action to close.
"Capital Expenditures" means, as applied to any Person for any period,
the aggregate of all expenditures (whether paid in cash or accrued as
liabilities during that period and including that portion of Capital Leases
which is capitalized on the balance sheet of a Person) by such Person during
such period that, in conformity with GAAP, are required to be
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included in or reflected by the property, plant or equipment or similar fixed
asset accounts reflected in the balance sheet of such Person, excluding any
expenditures reasonably determined by such Person as having been incurred for
expansion of the number of sites at a Designated Use Property owned by such
Person.
"Capital Leases," as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is or should be accounted for as a capital lease on the
balance sheet of that Person.
"Cash Equivalents" means (a) marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by an
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one (1) year after the date of acquisition thereof;
(b) marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within ninety (90) days after the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from any two nationally recognized rating services
reasonably acceptable to Lender; (c) domestic corporate bonds, other than
domestic corporate bonds issued by Borrower or any of its Affiliates, maturing
no more than 2 years after the date of acquisition thereof and, at the time of
acquisition, having a rating of at least A or the equivalent from two nationally
recognized rating services reasonably acceptable to Lender; (d) variable-rate
domestic corporate notes or medium term corporate notes, other than notes issued
by Borrower or any of its Affiliates, maturing or resetting no more than 1 year
after the date of acquisition thereof and having a rating of at least AA or the
equivalent from two nationally recognized rating services reasonably acceptable
to Lender; (e) commercial paper (foreign and domestic) or master notes, other
than commercial paper or master notes issued by Borrower or any of its
Affiliates, and, at the time of acquisition, having a long-term rating of at
least A or the equivalent from a nationally recognized rating service reasonably
acceptable to Lender and having a short-term rating of at least A-1 and P-1 from
S&P and Xxxxx'x, respectively (or, if at any time neither S&P nor Xxxxx'x shall
be rating such obligations, then the highest rating from such other nationally
recognized rating services reasonably acceptable to Lender); (f) domestic and
Eurodollar certificates of deposit or domestic time deposits or Eurotime
deposits or bankers' acceptances (foreign or domestic) that are issued by a bank
(I) which has, at the time of acquisition, a long-term rating of at least A or
the equivalent from a nationally recognized rating service reasonably acceptable
to Lender and (II) if a domestic bank, which is a member of the FDIC; and (g)
overnight securities repurchase agreements, or reverse repurchase agreements
secured by any of the foregoing types of securities or debt instruments,
provided that the collateral supporting such repurchase agreements shall have a
value not less than 101% of the principal amount of the repurchase agreement
plus accrued interest.
"Closing Date" means July 14, 2006.
"Commission" means the Securities and Exchange Commission.
"Contaminant" means any pollutant (as that term is defined in 42
U.S.C. 9601(33)) or toxic pollutant (as that term is defined in 33 U.S.C.
1362(13)), hazardous substance (as that term is defined in 42 U.S.C. 9601(14)),
hazardous chemical (as that term is defined by 29 C.F.R. Section 1910.1200(c)),
toxic substance, hazardous waste (as that term is defined in 42 U.S.C. 6903(5)),
radioactive material, special waste, petroleum (including crude oil or any
5
petroleum-derived substance, waste, or breakdown or decomposition product
thereof), or any constituent of any such substance or waste, including, but not
limited to hydrocarbons (including naturally occurring or man-made petroleum and
hydrocarbons), flammable explosives, urea formaldehyde insulation, radioactive
materials, biological substances, PCBs, pesticides, herbicides, asbestos, sewage
sludge, industrial slag, acids, metals, or solvents.
"Contractual Obligation," as applied to any Person, means any
provision of any Securities issued by that Person or any indenture, mortgage,
deed of trust, lease, contract, undertaking, document or instrument to which
that Person is a party or by which it or any of its properties is bound, or to
which it or any of its properties is subject (including without limitation any
restrictive covenant affecting such Person or any of its properties).
"Controlled Ownership Interests" means ownership interests in a Person
where the REIT, MHC Trust or Borrower (independently or collectively) has
control over the management and operations of such Person.
"Convertible Securities" means evidences of indebtedness, shares of
stock, limited or general partnership interests or other ownership interests,
warrants, options, or other rights or securities which are convertible into or
exchangeable for, with or without payment of additional consideration, shares of
common stock of the REIT, MHC Trust or partnership interests of Borrower, as the
case may be, either immediately or upon the arrival of a specified date or the
happening of a specified event.
"Court Order" means any judgment, writ, injunction, decree, rule or
regulation of any court or Governmental Authority binding upon the Person in
question.
"Debt Service" means, for any period, Interest Expense for such period
plus scheduled principal amortization (exclusive of Balloon Payments) for such
period on all Indebtedness of the REIT, on a consolidated basis.
"Designated Use Property" means a property owned and operated
primarily (i) for the purpose of leasing sites to individuals on which such
individuals place manufactured homes or recreational vehicles for the purpose of
occupying such manufactured homes or recreational vehicles, (ii) as a daily stay
campground, membership interest campground or park model community, or (iii) for
the purpose of renting cabins on such property to individuals.
"Designated Use Property Mortgages" means Investment Mortgages issued
by any Person engaged primarily in the business of developing, owning, and
managing Designated Use Properties.
"Designated Use Property Ownership Interests" means partnership, joint
venture, membership or other equity interests issued by any Person engaged
primarily in the business of developing, owning, and managing Designated Use
Properties.
"Development Activity" means construction in process, that is being
performed by or at the direction of Borrower, any Subsidiary or any Investment
Affiliate, at any Designated Use Property that will be owned and operated by
Borrower, any Subsidiary or any Investment Affiliate upon completion of
construction, including construction in process at Designated Use Properties not
owned by Borrower, any Subsidiary or any Investment Affiliate but which
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Borrower, any Subsidiary or any Investment Affiliate has the contractual
obligation to purchase. "Development Activity" shall include construction in
process for the purpose of expanding Designated Use Properties that are Thousand
Trails Properties but shall not include construction in process for the purpose
of expanding other Designated Use Properties owned by Borrower, any Subsidiary
or any Investment Affiliate.
"DOL" means the United States Department of Labor and any successor
department or agency.
"Dollars" and "$" means the lawful money of the United States of
America.
"EBITDA" means, for any period and without duplication (i) Net Income
for such period, plus (ii) depreciation and amortization expense and other
non-cash items deducted in the calculation of Net Income for such period, plus
(iii) Interest Expense deducted in the calculation of Net Income for such
period, plus, (iv) Taxes deducted in the calculation of Net Income for such
period, minus (v) the gains (and plus the losses) from extraordinary or unusual
items or asset sales or write-ups or forgiveness of indebtedness included in the
calculation of Net Income, for such period, minus (vi) earnings of Subsidiaries
for such period distributed to third parties, plus (or minus in the case of a
loss) (vii) Borrower's Share of the net income (or loss) of each Investment
Affiliate for such period calculated in conformity with GAAP before
depreciation, minus (or plus in the case of a loss) (viii) Borrower's Share of
the gains (or losses) from extraordinary or unusual items or asset sales or
write-ups or forgiveness of indebtedness included in the calculation of the net
income of each Investment Affiliate for such period.
"Environmental Laws" means all federal, state, district, local and
foreign laws, and all orders, consent orders, judgments, notices, permits or
demand letters issued, promulgated or entered thereunder, relating to pollution
or protection of the environment, including laws relating to emissions,
discharges, releases or threatened releases of pollutants, contamination,
chemicals, or industrial substances or Contaminants into the environment
(including, without limitation, ambient air, surface water, ground water, land
surface or subsurface strata) or otherwise relating to the generation,
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contamination, chemicals, industrial
substances or Contaminants. The term Environmental Laws shall include, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended ("CERCLA"); the Toxic Substances Control Act, as
amended; the Hazardous Materials Transportation Act, as amended; the Resource
Conservation and Recovery Act, as amended ("RCRA"); the Clean Water Act, as
amended; the Safe Drinking Water Act, as amended; the Clean Air Act, as amended;
all analogous state laws; the plans, rules, regulations or ordinances adopted,
or other criteria and guidelines promulgated pursuant to the preceding laws or
other similar laws, regulations, rules or ordinances now or hereafter in effect
regulating public health, welfare or the environment.
"Environmental Lien" means a Lien in favor of any Governmental
Authority for (a) any liability under federal or state Environmental Laws or
regulations, or (b) damages arising from, or costs incurred by such Governmental
Authority in response to, a Release or threatened Release of a Contaminant into
the environment
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.
"ERISA Affiliate" means any (a) corporation which is, becomes, or is
deemed by any Governmental Authority to be a member of the same controlled group
of corporations (within the meaning of Section 414(b) of the Internal Revenue
Code) as a Person or is so deemed by such Person, (b) partnership, trade or
business (whether or not incorporated) which is, becomes or is deemed by any
Governmental Authority to be under common control (within the meaning of Section
414(c) of the Internal Revenue Code) with such Person or is so deemed by such
Person, (c) any Person which is, becomes or is deemed by any Governmental
Authority to be a member of the same "affiliated service group" (as defined in
Section 414(m) of the Internal Revenue Code) as such Person or is so deemed by
such Person, or (d) any other organization or arrangement described in Section
414(o) of the Internal Revenue Code which is, becomes or is deemed by such
Person or by any Governmental Authority to be required to be aggregated pursuant
to regulations issued under Section 414(o) of the Internal Revenue Code with
such Person pursuant to Section 414(o) of the Internal Revenue Code or is so
deemed by such Person.
"Event of Default" means any of the occurrences set forth in Article X
after the expiration of any applicable grace period expressly provided therein.
"Existing Loan Agreement" has the meaning set forth in the Recitals
hereto.
"Existing Loans" means the "Loans" as defined in the Existing Loan
Agreement.
"Extended Maturity Date" has the meaning set forth in Section 3.01.
"Facility" means the loan facility of up to Fifty Million Dollars
($50,000,000) described in Section 2.01(a).
"FDIC" means the Federal Deposit Insurance Corporation or any
successor thereto.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate, rounded upwards to the nearest one hundredth of one percent (0.01%), per
annum equal for each day during such period to the weighted average of the rates
on overnight Federal Funds transactions with members of the Federal Reserve
System arranged by Federal Funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on such
transactions received by Lender from three Federal Funds brokers of recognized
standing selected by Lender.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System or any governmental authority succeeding to its functions.
"Financial Statements" has the meaning ascribed to such term in
Section 6.01(a).
"FIRREA" means the Financial Institutions Recovery, Reform and
Enforcement Act of 1989, as amended from time to time.
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"Fiscal Quarter" means a fiscal quarter of a Fiscal Year.
"Fiscal Year" means the fiscal year of Borrower, MHC Trust and the
REIT which shall be the twelve (12) month period ending on the last day of
December in each year.
"Fixed Charges" means for any period the sum of (i) Debt Service for
such period, (ii) 3% of Base Rent for such period, and (iii) Borrower's Share of
Capital Expenditures from each Investment Affiliate for such period.
"Funding Date" means, with respect to any Loan made after the Closing
Date, the date of the funding of such Loan.
"Funds from Operations" means the definition of "Funds from
Operations" of the National Association of Real Estate Investment Trusts on the
date of determination (before allocation to minority interests).
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board, or in such other statements by such
other entity as may be in general use by significant segments of the accounting
profession, which are applicable to the circumstances as of the date of
determination and which are consistent with the past practices of the REIT, MHC
Trust and Borrower.
"Governmental Authority" means any nation or government, any federal,
state, local, municipal or other political subdivision thereof or any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Gross Asset Value" means with respect to any Person as of any date of
determination, (i) the sum of the Adjusted Asset Values for each Property then
owned by such Person plus (ii) the value of any cash or Cash Equivalent then
owned by such Person and not subject to any Lien plus (iii) Manufactured Home
Inventory Value with respect to such Person, at such time.
"Indebtedness," as applied to any Person (and without duplication),
means (a) all indebtedness, obligations or other liabilities (whether secured,
unsecured, recourse, non-recourse, direct, senior or subordinate) of such Person
for borrowed money, (b) all indebtedness, obligations or other liabilities of
such Person evidenced by Securities or other similar instruments, (c) all
reimbursement obligations and other liabilities of such Person with respect to
letters of credit or banker's acceptances issued for such Person's account or
other similar instruments for which a contingent liability exists, (d) all
obligations of such Person to pay the deferred purchase price of Property or
services, (e) all obligations in respect of Capital Leases of such Person, (f)
all Accommodation Obligations of such Person, (g) all indebtedness, obligations
or other liabilities of such Person or others secured by a Lien on any asset of
such Person, whether or not such indebtedness, obligations or liabilities are
assumed by, or are a personal liability of, such Person, (h) all indebtedness,
obligations or other liabilities (other than interest expense liability) in
respect of Interest Rate Contracts and foreign currency exchange agreements
excluding all indebtedness, obligations or other liabilities in respect of such
Interest Rate Contracts to the extent that the aggregate notional amount thereof
does not exceed the aggregate
9
principal amount of any outstanding fixed or floating rate Indebtedness,
obligations or other liabilities permitted under this Agreement that exist as of
the date that such Interest Rate Contracts are entered into or that are incurred
no more than thirty (30) days after such Interest Rate Contracts are entered
into and (i) ERISA obligations currently due and payable.
"Initial Maturity Date" means June 29, 2010.
"Interest Expense" means, for any period and without duplication,
total interest expense, whether paid, accrued or capitalized (including letter
of credit fees and the interest component of Capital Leases but excluding
interest expense covered by an interest reserve established under a loan
facility) of the REIT, on a consolidated basis and determined in accordance with
GAAP.
"Interest Period" means, relative to any LIBOR Loan, the period
beginning on (and including) the date on which such LIBOR Loan is made as, or
converted into, a LIBOR Loan, and shall end on (but exclude) the day which
numerically corresponds to such date one (1) day or one (1), two (2), three (3),
six (6) or twelve (12) months thereafter (or, if such month has no numerically
corresponding day, on the last Business Day of such month), in either case as
Borrower may select in its relevant Notice of Borrowing or Notice of
Continuation/Conversion pursuant to Section 2.01(b); provided, however, that:
(a) if such Interest Period would otherwise end on a day which is not
a Business Day, such Interest Period shall end on (but exclude) the next
following Business Day; provided that, with respect to Interest Periods of
one (1) or more months only, if such next following Business Day is the
first Business Day of a calendar month, such Interest Period shall end on
the Business Day next preceding such numerically corresponding day; and
(b) no Interest Period may end later than the Termination Date.
"Interest Rate Contracts" means, collectively, interest rate swap,
collar, cap or similar agreements providing interest rate protection.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and any successor statute.
"Investment" means, as applied to any Person, any direct or indirect
purchase or other acquisition by that Person of Securities, or of a beneficial
interest in Securities, of any other Person, and any direct or indirect loan,
advance (other than deposits with financial institutions available for
withdrawal on demand, prepaid expenses, advances to employees and similar items
made or incurred in the ordinary course of business), or capital contribution by
such Person to any other Person, including all Indebtedness and accounts owed by
that other Person which are not current assets or did not arise from sales of
goods or services to that Person in the ordinary course of business. The amount
of any Investment shall be determined in conformity with GAAP except as
otherwise specifically provided herein.
"Investment Affiliate" means any Person in whom the REIT, MHC Trust,
Borrower or any Subsidiary holds an equity interest, directly or indirectly,
whose financial
10
results are not consolidated under GAAP with the financial results of the REIT,
MHC Trust or Borrower on the consolidated financial statements of the REIT, MHC
Trust and Borrower.
"Investment Mortgages" means mortgages securing indebtedness directly
or indirectly owed to Borrower or any of its Subsidiaries, including
certificates of interest in real estate mortgage investment conduits.
"IRS" means the Internal Revenue Service and any Person succeeding to
the functions thereof.
"Joinder Agreement" means that certain Joinder to REIT Guaranty, dated
as of November 10, 2004, made by T1000 Trust for the benefit of Lender.
"Lender" has the meaning set forth in the preamble hereto.
"Level I Period" means a period during which the ratio of Total
Liabilities to the sum of Gross Asset Values for Borrower and each of its
Subsidiaries shall be less than 0.45:1.
"Level II Period" means a period during which the ratio of Total
Liabilities to the sum of Gross Asset Values for Borrower and each of its
Subsidiaries shall equal or exceed 0.45:1 but shall be less than 0.50:1.
"Level III Period" means a period during which the ratio of Total
Liabilities to the sum of Gross Asset Values for Borrower and each of its
Subsidiaries shall equal or exceed 0.50:1 but shall be less than 0.55:1.
"Level IV Period" means a period during which the ratio of Total
Liabilities to the sum of Gross Asset Values for Borrower and each of its
Subsidiaries shall equal or exceed 0.55:1 but shall be less than 0.60:1.
"Level V Period" means a period during which the ratio of Total
Liabilities to the sum of Gross Asset Values for Borrower and each of its
Subsidiaries shall equal or exceed 0.60:1 but shall be less than 0.65:1.
"Level VI Period" means a period during which the ratio of Total
Liabilities to the sum of Gross Asset Values for Borrower and each of its
Subsidiaries shall equal or exceed 0.65:1 but shall not exceed 0.675:1.
"Liabilities and Costs" means all claims, judgments, liabilities,
obligations, responsibilities, losses, damages (including punitive and treble
damages), costs, disbursements and expenses (including without limitation
reasonable attorneys', experts' and consulting fees and costs of investigation
and feasibility studies), fines, penalties and monetary sanctions, interest,
direct or indirect, known or unknown, absolute or contingent, past, present or
future.
"LIBOR" means, relative to any Interest Period, for any LIBOR Loan,
the rate of interest obtained by dividing (i) the rate of interest determined by
Lender (whose determination shall be conclusive absent manifest error, which
shall not include any lower determination by any other banks) equal to the rate
(rounded upwards, if necessary, to the nearest one one-hundredth of one percent
(.01%)) per annum reported by Lender at which Dollar deposits in
11
immediately available funds are offered by Lender to leading banks in the
Eurodollar inter bank market (a) for Interest Periods other than Short Interest
Periods, at or about 11:00 A.M. London time two (2) Business Days prior to the
beginning of such Interest Period and (b) for Short Interest Periods, on the
first day of such Short Interest Period, and in the case of either (a) or (b),
for delivery on the first day of such Interest Period for a period approximately
equal to such Interest Period and in an amount equal or comparable to the LIBOR
Loan to which such Interest Period relates, by (ii) a percentage expressed as a
decimal equal to one (1) minus the LIBOR Reserve Percentage.
"LIBOR Loan" means a Loan bearing interest, at all times during an
Interest Period applicable to such Loan, at a fixed rate of interest determined
by reference to LIBOR.
"LIBOR Reserve Percentage" means, relative to any Interest Period, the
average daily maximum reserve requirement (including, without limitation, all
basic, emergency, supplemental, marginal and other reserves) which is imposed
under Regulation D, as Regulation D may be amended, modified or supplemented, on
"Eurocurrency liabilities" having a term equal to the applicable Interest Period
(or in respect of any other category of liabilities which includes deposits by
reference to which the interest rate on LIBOR Loans is determined or any
category of extensions of credit or other assets which includes loans by a
non-United States office of any bank to United States residents), which
requirement shall be expressed as a decimal. LIBOR shall be adjusted
automatically on, and as of the effective date of, any change in the LIBOR
Reserve Percentage.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, security interest, encumbrance (including, but
not limited to, easements, rights-of-way, zoning restrictions and the like),
lien (statutory or other), preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever, including without
limitation any conditional sale or other title retention agreement, the interest
of a lessor under a Capital Lease, any financing lease having substantially the
same economic effect as any of the foregoing, and the filing of any financing
statement (other than a financing statement filed by a "true" lessor pursuant to
Section 9-408 of the Uniform Commercial Code) naming the owner of the asset to
which such Lien relates as debtor, under the Uniform Commercial Code or other
comparable law of any jurisdiction.
"Loan" means any loans made pursuant to the Facility.
"Loan Availability" means the amount of the Facility from time to
time.
"Loan Documents" means, this Agreement, the Loan Note, the REIT
Guaranty, the Joinder and all other agreements, instruments and documents
(together with amendments and supplements thereto and replacements thereof) now
or hereafter executed by the REIT, Borrower or any Agreement Party, which
evidence, guaranty or secure the Obligations.
"Loan Note" means the promissory note evidencing the Loans in the
aggregate original principal amount of Fifty Million Dollars ($50,000,000)
executed by Borrower in favor of Lender, as amended, supplemented, replaced or
modified from time to time. The initial Loan Note and any replacements thereof
shall be substantially in the form of Exhibit D.
"Manufactured Home Inventory Value" means with respect to Borrower and
its
12
Subsidiaries, as of any date of determination, the lesser of (i) the total cost
to Borrower or its Subsidiaries, as applicable, of all manufactured home units,
which have never been occupied (other than for short periods in the ordinary
course of Borrower's and its Subsidiaries' customary sales practices), then
owned by Borrower or any Subsidiary that were acquired new from the
manufacturers of such units, or from Persons who acquired such units new from
such manufacturers, within the one (1) year period immediately preceding the
date of determination and (ii) Thirty-Five Million Dollars ($35,000,000).
"Material Adverse Effect" means a material adverse effect upon (i) the
ability of Borrower, the REIT, MHC Trust or T1000 Trust to perform its covenants
and obligations under this Agreement and the other Loan Documents or (ii) the
ability of Lender to enforce the Loan Documents. The phrase "has a Material
Adverse Effect" or "will result in a Material Adverse Effect" or words
substantially similar thereto shall in all cases be intended to mean "has or
will result in a Material Adverse Effect," and the phrase "has no (or does not
have a) Material Adverse Effect" or "will not result in a Material Adverse
Effect" or words substantially similar thereto shall in all cases be intended to
mean "does not or will not result in a Material Adverse Effect."
"Maturity Date" means the Initial Maturity Date, as such date may be
extended pursuant to Article III.
"Minimum Net Worth" means Seven Hundred Million Dollars
($700,000,000).
"Moody's" means Xxxxx'x Investors Service, a Delaware corporation, and
its successors and assigns, and, if such corporation shall be dissolved or
liquidated or shall no longer perform the functions of a securities rating
agency, "Moody's" shall be deemed to refer to any other nationally recognized
securities rating agency designated by Lender.
"Multiemployer Plan" means an employee benefit plan defined in Section
4001(a)(3) or Section 3(37) of ERISA which is, or within the immediately
preceding six (6) years was, maintained, administered, contributed to by or was
required to be contributed to by a Person or any ERISA Affiliate, or under which
a Person or any ERISA Affiliate may incur any liability.
"Net Income" means, for any period, the net income (or loss) after
Taxes of the REIT, on a consolidated basis, for such period calculated in
conformity with GAAP; provided, however, that Net Income shall not include the
net income (or loss) of Investment Affiliates.
"Net Operating Income" means, for any period, and with respect to any
Qualifying Unencumbered Property, the net operating income of such Qualifying
Unencumbered Property (attributed to such Property in a manner reasonably
acceptable to Lender) for such period (i) determined in accordance with GAAP,
(ii) determined in a manner which is consistent with the past practices of the
REIT, MHC Trust and Borrower, and (iii) inclusive of an allocation of reasonable
management fees and administrative costs to such Qualifying Unencumbered
Property consistent with the past practices of the REIT, MHC Trust and Borrower,
except that, for purposes of determining Net Operating Income, income shall not
(a) include security or other deposits, lease termination or other similar
charges, delinquent rent recoveries, unless previously
13
reflected in reserves, or any other items reasonably deemed by Lender to be of a
non-recurring nature or (b) be reduced by depreciation or amortization or any
other non-cash item.
"Net Price" means, with respect to the purchase of any Property by
Borrower or any Subsidiary, without duplication, (i) cash and Cash Equivalents
paid as consideration for such purchase, plus (ii) the principal amount of any
note or other deferred payment obligation delivered in connection with such
purchase (except as described in clause (iv) below), plus (iii) the value of any
other consideration delivered in connection with such purchase or sale
(including, without limitation, shares in the REIT and operating partnership
units or preferred operating partnership units in Borrower) (as reasonably
determined by Lender), minus (iv) the value of any consideration deposited into
escrow or subject to disbursement or claim upon the occurrence of any event,
minus (v) reasonable costs of sale and taxes paid or payable in connection with
such purchase.
"Net Worth" means, at any time, the sum of Gross Asset Values for
Borrower and each of its Subsidiaries at such time minus Total Liabilities at
such time.
"Non-Designated Use Property" means Property which is not (i) used for
lease or operation of Designated Use Properties, (ii) Securities consisting of
stock issued by real estate investment trusts engaged primarily in the
development, ownership and management of Designated Use Properties, (iii)
Designated Use Property Mortgages or (iv) Designated Use Property Ownership
Interests.
"Non-Recourse Indebtedness" means any single loan with respect to
which recourse for payment is limited to specific assets related to a particular
Property or group of Properties encumbered by a Lien securing such Indebtedness,
so long as the Adjusted Asset Value for such Property, or the total of the
Adjusted Asset Values for such group of Properties, does not exceed One Hundred
Million Dollars ($100,000,000); provided, however, that personal recourse to the
REIT, MHC Trust, Borrower or any Subsidiary by a holder of any such loan for
fraud, misrepresentation, misapplication of cash, waste, environmental claims
and liabilities and other circumstances customarily excluded by institutional
lenders from exculpation provisions and/or included in separate indemnification
agreements in non-recourse financing of real estate shall not, by itself,
prevent such loan from being characterized as Non-Recourse Indebtedness.
"Notice of Borrowing" means a notice of borrowing duly executed by
Borrower substantially in the form of Exhibit I.
"Notice of Continuation/Conversion" means a notice of continuation or
conversion of or to a LIBOR Loan duly executed by Borrower substantially in the
form of Exhibit J.
"Obligations" means, from time to time, all Indebtedness of Borrower
owing to Lender or any Person entitled to indemnification pursuant to Section
12.02, or any of their respective successors, transferees or assigns, of every
type and description, whether or not evidenced by any note, guaranty or other
instrument, arising under or in connection with this Agreement or any other Loan
Document, whether or not for the payment of money, whether direct or indirect
(including those acquired by assignment), absolute or contingent, due or to
become due, now existing or hereafter arising and however acquired. The term
includes, without
14
limitation, all interest, charges, expenses, fees, reasonable attorneys' fees
and disbursements and any other sum now or hereafter chargeable to Borrower
under or in connection with this Agreement or any other Loan Document.
"Officer's Certificate" means a certificate signed by a specified
officer of a Person certifying as to the matters set forth therein.
"Original Obligations" means the "Obligations" as defined in the
Existing Loan Agreement.
"Other Indebtedness" means all Indebtedness other than the
Obligations.
"Owned Fiscal Quarters" means, with respect to any Property, the full
Fiscal Quarters during which Borrower or any Subsidiary actually owned such
Property.
"PBGC" means the Pension Benefit Guaranty Corporation or any Person
succeeding to the functions thereof.
"Permit" means any permit, approval, authorization, license, variance
or permission required from a Governmental Authority under an applicable
Requirement of Law.
"Permitted Holdings" means (a) Non-Designated Use Property (other than
cash or Cash Equivalents), (b) Securities issued by real estate investment
trusts primarily engaged in the development, ownership, operation and management
of Designated Use Properties, (c) Designated Use Property Mortgages other than
mortgage indebtedness which is either eliminated in the consolidation of the
REIT, Borrower and the Subsidiaries or accounted for as investments in real
estate under GAAP, (d) Designated Use Property Ownership Interests other than
Controlled Ownership Interests and/or (e) Development Activity.
"Permitted Liens" means:
(a) Liens for Taxes, assessments or other governmental charges not yet
due and payable or which are being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted in accordance with
Sections 7.01(d) or 7.02(g);
(b) statutory liens of carriers, warehousemen, mechanics, materialmen
and other similar liens imposed by law, which are incurred in the ordinary
course of business for sums not more than sixty (60) days delinquent or
which are being contested in good faith in accordance with Sections 7.01(d)
or 7.02(g);
(c) deposits made in the ordinary course of business to secure
liabilities to insurance carriers;
(d) Liens for purchase money obligations for equipment; provided that
(i) the Indebtedness secured by any such Lien does not exceed the purchase
price of such equipment, (ii) any such Lien encumbers only the asset so
purchased and the proceeds upon sale, disposition, loss or destruction
thereof, and (iii) such Lien, after giving effect
15
to the Indebtedness secured thereby, does not give rise to an Event of
Default or Unmatured Event of Default pursuant to Section 8.01(a);
(e) easements, rights-of-way, zoning restrictions, other similar
charges or encumbrances and all other items listed on Schedule B to
Borrower's or any Subsidiary's, as applicable, owner's title insurance
policies for any of Borrower's or any Subsidiary's real Properties, so long
as the foregoing do not interfere in any material respect with the use or
ordinary conduct of the business of Borrower or such Subsidiary, as
applicable, and do not diminish in any material respect the value of the
Property to which it is attached or for which it is listed; or
(f) Liens and judgments which have been or will be bonded or released
of record within thirty (30) days after the date such Lien or judgment is
entered or filed against the REIT, Borrower, any Subsidiary or any
Agreement Party.
"Person" means any natural person, employee, corporation, limited
partnership, limited liability partnership, general partnership, joint stock
company, limited liability company, joint venture, association, company, trust,
bank, trust company, land trust, business trust, real estate investment trust or
other organization, whether or not a legal entity, or any other nongovernmental
entity, or any Governmental Authority.
"Plan" means an employee benefit plan defined in Section 3(3) of ERISA
(other than a Multiemployer Plan) in respect of which a Person or an ERISA
Affiliate, as applicable, is an "employer" as defined in Section 3(5) of ERISA.
"Pre-Closing Financials" has the meaning ascribed to such term in
Section 5.01(g).
"Property" means, with respect to any Person, any real or personal
property, building, facility, structure, equipment or unit, or other asset owned
by such Person.
"Qualifying Unencumbered Property" means (a) the Properties listed on
Exhibit F hereto and (b) any Property designated by Borrower from time to time
pursuant to Section 6.04 which (i) is an operating Designated Use Property
wholly-owned (directly or beneficially) by Borrower or any Subsidiary
wholly-owned, directly or indirectly by Borrower and/or the REIT, (ii) is not
subject (nor are any direct or indirect equity interests in such Property
subject) to a Lien which secures Indebtedness of any Person other than a
Permitted Lien, (iii) is not subject (nor are any direct or indirect equity
interests in such Property subject) to any covenant, condition, or other
restriction which prohibits or limits the creation or assumption of any Lien
upon such Property, and (iv) has not been designated by Lender in a notice to
Borrower as not acceptable to the Lender pursuant to Section 6.04; provided,
however, that the weighted average occupancy rate of the Properties listed on
Exhibit F together with those Properties designated by Borrower to be Qualifying
Unencumbered Properties pursuant to Section 6.04 (excluding (x) expansion areas
of such Properties which are purchased and/or developed on or after the Closing
Date, and (y) Designated Use Properties consisting of recreational vehicle
resorts, daily stay campgrounds, membership interest campgrounds, cabin rentals
or park model communities) shall be at least seventy-five percent (75%); and
provided, further, that Borrower may, upon at least fifteen (15) Business Days
prior notice to Lender, designate that any Property listed on Exhibit F
16
or otherwise designated as a Qualifying Unencumbered Property is no longer a
Qualifying Unencumbered Property (and upon such designation, such Property shall
no longer be a Qualifying Unencumbered Property). Any Property shall cease to be
a "Qualifying Unencumbered Property" at such time as it fails to satisfy all the
conditions set forth in clauses (i), (ii) and (iii) of this definition.
"Recourse Indebtedness" means, with respect to any Person,
Indebtedness which is not Non-Recourse Indebtedness.
"Regulation D" means Regulation D of the Federal Reserve Board as in
effect from time to time.
"Regulation T" means Regulation T of the Federal Reserve Board as in
effect from time to time.
"Regulation U" means Regulation U of the Federal Reserve Board as in
effect from time to time.
"Regulation X" means Regulation X of the Federal Reserve Board as in
effect from time to time.
"REIT" has the meaning ascribed to such term in the preamble hereto.
"REIT Guaranty" means the REIT Guaranty, dated as of May, 2004,
executed by the REIT and MHC Trust in favor of Lender, as joined by T1000 Trust
pursuant to the Joinder.
"Release" may be either a noun or a verb and means the release, spill,
emission, leaking, pumping, pouring, emitting, emptying, escaping, dumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment or into or out of any property, including the
movement of Contaminants through or in the air, soil, surface water, groundwater
or property.
"Remedial Action" means any action undertaken pursuant to
Environmental Laws to (a) clean up, remove, remedy, respond to, treat or in any
other way address Contaminants in the indoor or outdoor environment; (b) prevent
the Release or threat of Release or minimize the further Release of Contaminants
so they do not migrate or endanger or threaten to endanger public health or
welfare or the indoor or outdoor environment; or (c) perform pre-remedial
studies and investigations and post-remedial monitoring and care.
"Reportable Event" means any of the events described in Section
4043(b) of ERISA, other than an event for which the thirty (30) day notice
requirement is waived by regulations, or any of the events described in Section
4062(f) or 4063(a) of ERISA.
"Requirements of Law" means, as to any Person, the charter and
by-laws, partnership agreements or other organizational or governing documents
of such Person, and any law, rule or regulation, permit, or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject, including without limitation, the Securities
Act, the Securities Exchange Act, Regulations T, U and X, FIRREA and any
certificate of
17
occupancy, zoning ordinance, building or land use requirement or Permit or
occupational safety or health law, rule or regulation.
"S&P" means Standard & Poor's Rating Group, a division of McGraw Hill,
its successors and assigns, and, if Standard & Poor's Rating Group shall be
dissolved or liquidated or shall no longer perform the functions of a securities
rating agency, "S&P" shall be deemed to refer to any other nationally recognized
securities rating agency designated by Lender.
"Secured Debt" means Indebtedness, the payment of which is secured by
a Lien on any real Property owned or leased by the REIT, Borrower, or any
Subsidiary.
"Securities" means any stock, partnership interests, shares, shares of
beneficial interest, voting trust certificates, bonds, debentures, notes or
other evidences of indebtedness, secured or unsecured, convertible, subordinated
or otherwise, or in general any instruments commonly known as "securities," or
any certificates of interest, shares, or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire any of the foregoing, but shall not include any evidence of
the Obligations.
"Securities Act" means the Securities Act of 1933, as amended to the
date hereof and from time to time hereafter, and any successor statute.
"Securities Exchange Act" means the Securities Exchange Act of 1934,
as amended to the date hereof and from time to time hereafter, and any successor
statute.
"Short Interest Period" means an Interest Period commencing on a
Business Day and ending on (but excluding) the next Business Day.
"Solvent" means as to any Person at the time of determination, such
Person (a) owns property the value of which (both at fair valuation and at
present fair saleable value) is greater than the amount required to pay all of
such Person's liabilities (including contingent liabilities and debts); (b) is
able to pay all of its debts as such debts mature; and (c) has capital
sufficient to carry on its business and transactions and all business and
transactions in which it is about to engage.
"Subsidiary" means any Person, whose financial results are
consolidated under GAAP with the financial results of the REIT or Borrower on
the consolidated financial statements of the REIT or Borrower.
"Syndicated Revolving Credit Agreement" means that certain Credit
Agreement (Revolving Facility), dated as of the date hereof, by and among
Borrower, the REIT, MHC Trust, T1000 Trust, Xxxxx Fargo Bank, N.A., as
administrative agent, and the other Lenders thereunder, as the same may be
amended, supplemented, replaced or modified from time to time.
"T1000 Trust" means MHC T1000 Trust, a Maryland real estate investment
trust. T1000 Trust is a guarantor under the REIT Guaranty.
"Taxes" means all federal, state, local and foreign income and gross
receipts taxes.
18
"Termination Date" has the meaning ascribed to such term in Section
2.01(d).
"Termination Event" means (a) any Reportable Event, (b) the withdrawal
of a Person, or an ERISA Affiliate from a Benefit Plan during a plan year in
which it was a "substantial employer" as defined in Section 4001(a)(2) of ERISA,
(c) the occurrence of an obligation arising under Section 4041 of ERISA of a
Person or an ERISA Affiliate to provide affected parties with a written notice
of an intent to terminate a Benefit Plan in a distress termination described in
Section 4041(c) of ERISA, (d) the institution by the PBGC of proceedings to
terminate any Benefit Plan under Section 4042 of ERISA or to appoint a trustee
to administer any Benefit Plan, (e) any event or condition which constitutes
grounds under Section 4042 of ERISA for the appointment of a trustee to
administer a Benefit Plan, (f) the partial or complete withdrawal of such Person
or any ERISA Affiliate from a Multiemployer Plan which would have a Material
Adverse Effect, or (g) the adoption of an amendment by any Person or any ERISA
Affiliate to terminate any Benefit Plan which is subject to Title IV of ERISA or
Section 412 of the Internal Revenue Code or the treatment of an amendment to a
Benefit Plan as a termination under ERISA.
"Thousand Trails" means KTTI Holding Company, Inc., a Delaware
corporation, that, among other things, (i) owns and operates fifty-seven (57)
membership-based recreational vehicle and campground properties comprising
recreational vehicle and campground sites for which the members purchase an
initial membership and thereafter pay annual dues and (ii) owns the Thousand
Trails Land.
"Thousand Trails Land" means "Excess Land" as defined in the Thousand
Trails Lease, as in effect on the Closing Date.
"Thousand Trails Lease" means that certain Amended and Restated Lease
Agreement, dated as of April 14, 2006, by and between MHC TT Leasing Company,
Inc., a Delaware corporation, as lessor, and Thousand Trails Operations Holding
Company, L.P., a Delaware limited partnership, as tenant, with respect to the
Thousand Trails Properties, other than the Thousand Trails Land.
"Thousand Trails Properties" shall mean the Properties owned, directly
or indirectly, by T1000 Trust.
"Thousand Trails Transaction" means the acquisition by T1000 Trust of
Thousand Trails through the creation of a directly- or indirectly-owned
acquisition Subsidiary and the merger of such Subsidiary into Thousand Trails,
with Thousand Trails being the surviving corporation, being renamed MHC TT
Holding Company, Inc. immediately after such merger and being, directly or
indirectly, a wholly-owned Subsidiary of Borrower. The total merger
consideration to be paid by Borrower or its Subsidiaries in connection with such
transaction is One Hundred Sixty Million Dollars ($160,000,000).
"Total Liabilities" means, without duplication, all Indebtedness of
the REIT on a consolidated basis, plus (i) all other items which, in accordance
with GAAP, would be included as liabilities on the liability side of the balance
sheet of the REIT, on a consolidated basis, and in any event shall include
recourse and non-recourse mortgage debt, letters of credit, purchase
obligations, forward equity sales, repurchase obligations, unsecured debt,
accounts payable, lease
19
obligations (including ground leases) to the extent required, in accordance with
GAAP, to be classified as capital leases on the balance sheet of the REIT,
guarantees of indebtedness, subordinated debt and unfunded obligations plus (ii)
Borrower's Adjusted Share of Investment Affiliates' Indebtedness; provided,
however, that "Total Liabilities" shall not include dividends declared by the
REIT, MHC Trust or Borrower which are permitted under Section 8.01(d) but not
yet paid.
"Transient RV NOI" means, with respect to any Qualifying Unencumbered
Property that is a recreational vehicle resort property other than a Thousand
Trails Property, all of such Qualifying Unencumbered Property's Net Operating
Income that is not attributable to residents/guests at such property who are
either permanent residents of such property or who reside at such property for
the entire "season" applicable to such property.
"Unencumbered Asset Value" means, as of any date of determination, (i)
the quotient of the Net Operating Income for the most recently ended twelve (12)
calendar month period which is attributable (in a manner reasonably acceptable
to Lender) to Qualifying Unencumbered Properties for which the number of Owned
Fiscal Quarters is at least four (4) divided by seven hundred twenty-five
ten-thousandths (0.0725) plus (ii) the aggregate of the Net Prices paid by
Borrower or such Subsidiary for all Qualifying Unencumbered Properties for which
the number of Owned Fiscal Quarters is less than four (4); provided, however,
that for purposes of determining the numerator of the quotient described in
clause (i) of this definition, Transient RV NOI shall be included only to the
extent it does not exceed fifteen percent (15%) of the aggregate Net Operating
Income for the applicable Qualifying Unencumbered Properties.
"Unencumbered Net Operating Income" means for any Fiscal Quarter, Net
Operating Income for such period from each Qualifying Unencumbered Property;
provided, however, that for purposes of determining Unencumbered Net Operating
Income, Transient RV NOI shall be included only to the extent it does not exceed
fifteen percent (15%) of the aggregate Net Operating Income for the applicable
Qualifying Unencumbered Properties.
"Unfunded Pension Liabilities" means the excess of a Benefit Plan's
accrued benefits, as defined in Section 3(23) of ERISA, over the current value
of that Plan's assets, as defined in Section 3(26) of ERISA.
"Uniform Commercial Code" means the Uniform Commercial Code as in
effect on the date hereof in the State of Illinois.
"Unmatured Event of Default" means an event which, with the giving of
notice or the lapse of time, or both, would constitute (a) an Event of Default
or (b) an "Event of Default" as defined in the Syndicated Revolving Credit
Agreement.
"Unsecured Debt" means, as of any date of determination and without
duplication, all Indebtedness of the REIT, Borrower or any Subsidiary, which is
not Secured Debt but excluding (i) all accounts payable of the REIT, Borrower or
any Subsidiary incurred in the ordinary course of business, (ii) all advance
rents received and (iii) all accrued interest payable.
"Unsecured Interest Expense" means Interest Expense other than
Interest Expense payable in respect of Secured Debt.
20
"Welfare Plan" means any "employee welfare benefit plan" as defined in
Section 3(1) of ERISA, which a Person or any ERISA Affiliate maintains,
administers, contributes to or is required to contribute to, or within the
immediately preceding five years maintained, administered, contributed to or was
required to contribute to, or under which a Person or any ERISA Affiliate may
incur any liability.
"Wholly-Owned Subsidiary" means any Subsidiary which is wholly-owned
directly or indirectly by Borrower, MHC Trust or the REIT.
1.02 Computation of Time Periods. In this Agreement, unless otherwise
specified, in the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including" and the words
"to" and "until" each mean "to and including." Periods of days referred to in
this Agreement shall be counted in calendar days unless Business Days are
expressly prescribed.
1.03 Terms.
(a) Any accounting terms used in this Agreement which are not
specifically defined shall have the meanings customarily given them in
accordance with GAAP, provided that for purposes of references to the financial
results of the "REIT, on a consolidated basis," the REIT shall be deemed to own
one hundred percent (100%) of the partnership interests in Borrower.
(b) Any time the phrase "to the best of Borrower's knowledge" or a
phrase similar thereto is used herein, it means: "to the actual knowledge of the
executive officers of Borrower, MHC Trust, T1000 Trust and the REIT, after
reasonable inquiry of those agents, employees or contractors of the REIT,
Borrower, any Agreement Party or any Subsidiary who could reasonably be
anticipated to have knowledge with respect to the subject matter or
circumstances in question and review of those documents or instruments which
could reasonably be anticipated to be relevant to the subject matter or
circumstances in question."
(c) In each case where the consent or approval of Lender is required
or its non-obligatory action is requested by Borrower, such consent, approval or
action shall be in the sole and absolute discretion of Lender unless otherwise
specifically indicated.
1.04 Interrelationship With the Existing Loan Agreement. Effective on
the Closing Date, this Agreement shall amend and restate the provisions of the
Existing Loan Agreement in their entirety, and all Existing Loans and all Loans
made on or after the Closing Date shall be governed exclusively by the terms of
this Agreement. All Original Obligations outstanding on the Closing Date
(including without limitation all accrued and unpaid interest and fees) shall,
to the extent not paid on the Closing Date, be deemed to be Obligations
outstanding hereunder. The REIT Guaranty shall remain in full force and effect
with respect to the Obligations and is hereby reaffirmed. The parties
acknowledge and agree that the execution and delivery of this Agreement shall
not constitute a novation, payment and reborrowing or termination of the
Original Obligations and that all such Original Obligations outstanding on the
Closing Date are in all respects continued and outstanding as Obligations under
this Agreement.
21
ARTICLE II.
LOANS
2.01 Loan Advances and Repayment.
(a) Loan Availability.
(i) Subject to the terms and conditions set forth in this
Agreement, Lender hereby agrees to make Loans to Borrower from time to time
during the period from the Closing Date to the Business Day next preceding
the Maturity Date; provided, that the aggregate outstanding principal
amount of the Loans shall not exceed Loan Availability. The Loans will be
evidenced by the Loan Note.
(ii) Loans may be voluntarily prepaid pursuant to Section 2.05(a)
and, subject to the provisions of this Agreement, any amounts so prepaid
may be reborrowed, up to the amount available under Section 2.01(a)(i) at
the time of such Borrowing, until the Business Day next preceding the
Termination Date. The principal balance of the Loans shall be payable in
full on the Termination Date. During the term of this Agreement, Borrower
shall pay to Lender, within one (1) Business Day after Borrower's receipt
of a demand in writing from Lender, such principal amounts as are necessary
so that the aggregate outstanding principal amount of the Loans at any time
does not exceed Loan Availability at such time.
(b) Notice of Borrowing; Continuation/Conversion. Whenever Borrower
desires to borrow under this Section 2.01, Borrower shall give Lender, at Xxxxx
Fargo Real Estate Group Disbursement Center, 0000 Xxxx Xxxx Xxxxx, Xxxxx 000, Xx
Xxxxxxx, Xxxxxxxxxx 00000, with a copy to: Xxxxx Fargo Bank, N.A., 000 Xxxxx
Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, Attn: Account Officer, or
such other address as Lender shall designate, an original or facsimile Notice of
Borrowing no later than 10:00 A.M. (California time), not less than three (3)
nor more than five (5) Business Days prior to the proposed Funding Date;
provided, however, that for LIBOR Loans with a Short Interest Period, Borrower
may give Lender a Notice of Borrowing no later than 10:00 A.M. (California time)
on the proposed Funding Date. Each Notice of Borrowing shall specify (i) the
Funding Date (which shall be a Business Day) in respect of the Loan, (ii) the
amount of the proposed Loan, and (iii) whether the Loan to be made thereunder
will be a Base Rate Loan or a LIBOR Loan and, if a LIBOR Loan, the applicable
Interest Period. Any Notice of Borrowing pursuant to this Section 2.01(b) shall
be irrevocable. Borrower may elect (A) so long as no Event of Default has
occurred and is continuing, to convert Base Rate Loans or any portion thereof
into LIBOR Loans, (B) to convert LIBOR Loans or any portion thereof into Base
Rate Loans, or (C) so long as no Event of Default has occurred and is
continuing, to continue any LIBOR Loans or any portion thereof for an additional
Interest Period; provided, however, that the aggregate amount of the Loans being
continued as or converted into LIBOR Loans shall, in the aggregate, equal One
Million Dollars ($1,000,000) or an integral multiple of One Hundred Thousand
Dollars ($100,000) in excess thereof. The applicable Interest Period for the
continuation of any LIBOR Loan shall commence on the day on which the next
preceding Interest Period expires. Each such election shall be made by giving
Lender, at 0000 X. Xxxx Xxxxx, Xxxxx 000, Xx Xxxxxxx, Xxxxxxxxxx 00000 Attn: Xxx
Xxxxx, a Notice of Continuation/Conversion (i) by 10:00 A.M. (California time)
on the date of a conversion to a Base Rate Loan or a conversion or continuation
of a LIBOR Loan for a Short
22
Interest Period, or (ii) by 10:00 A.M. (California time) not less than three (3)
nor more than five (5) Business Days prior to the date of a conversion to or
continuation of a LIBOR Loan for an Interest Period other than a Short Interest
Period, specifying, in the case of both (i) and (ii) (1) whether a conversion or
continuation is to occur, (2) the amount of the conversion or continuation, (3)
the Interest Period therefor, in the case of a conversion to or continuation of
a LIBOR Loan, and (4) the date of the conversion or continuation (which date
shall be a Business Day). Notwithstanding anything to the contrary contained
herein and subject to the default interest provisions contained in Section 2.03,
if an Event of Default occurs and as a result thereof Lender's commitment to
fund hereunder is terminated, all LIBOR Loans will convert to Base Rate Loans
upon the expiration of the applicable Interest Periods therefor or the date all
Loans become due, whichever occurs first. Except as provided above, the
conversion of a LIBOR Loan to a Base Rate Loan shall only occur on the last
Business Day of the Interest Period relating to such LIBOR Loan. In the absence
of an effective election by Borrower of a LIBOR Loan and Interest Period in
accordance with the above procedures prior to the expiration of the then current
Interest Period with respect to any LIBOR Loan, interest on such LIBOR Loan
shall accrue at the interest rate then applicable to a LIBOR Loan for an
Interest Period of thirty (30) days, effective immediately upon the expiration
of the then-current Interest Period, without prejudice, however, to the right of
Borrower to elect a Base Rate Loan or a different Interest Period in accordance
with the terms and provisions of this Agreement; provided, however, that if such
continuation shall cause the number of LIBOR Loan tranches to exceed five (5),
such LIBOR Loan shall be converted to a Base Rate Loan.
(c) Making of Loans. Lender shall make the proceeds of the Loans
available to Borrower in El Segundo, California on the applicable Funding Date
and shall disburse such funds in Dollars and in immediately available funds not
later than 1:00 P.M. Chicago time to Borrower's account, at Bank of America,
Account Number 73-00000000 in Chicago, Illinois, or such other account specified
in the Notice of Borrowing acceptable to Lender, with a confirming telephone
call to Xxxxx Xxxxxxx at (000) 000-0000 or Xxxx Xxxxxx at (000) 000-0000 or
Xxxxxxx Xxxxxx at (000) 000-0000.
(d) Term; Principal Payment. The outstanding balance of the Loans
shall be payable in full on the earlier to occur of (A) the Maturity Date, and
(B) the acceleration of the Loans pursuant to Section 10.02(a) (the "Termination
Date").
2.02 Borrowing and Interest Rate Election Authorization. Borrower
shall provide Lender with documentation reasonably satisfactory to Lender
indicating the names of those employees or agents of Borrower authorized by
Borrower to sign Notices of Borrowing and Continuation/Conversion, any extension
notice and to receive callback confirmations, and Lender shall be entitled to
rely on such documentation until notified in writing by Borrower of any
change(s) of the Persons so authorized. Lender shall be entitled to act in good
faith on the instructions of anyone identifying himself as one of the Persons so
authorized, and Borrower shall be bound thereby in the same manner as if such
Person were actually so authorized. Borrower agrees to indemnify, defend and
hold Lender harmless from and against any and all Liabilities and Costs which
may arise or be created by the acceptance of instructions for making Loans.
23
2.03 Interest on the Loans.
(a) Base Rate Loans. Subject to Section 2.03(d), all Base Rate Loans
shall bear interest on the average daily unpaid principal amount thereof from
the date made until paid in full at a fluctuating rate per annum equal to the
Base Rate. Base Rate Loans shall be made in minimum amounts of One Million
Dollars ($1,000,000) or an integral multiple of One Hundred Thousand Dollars
($100,000) in excess thereof.
(b) LIBOR Loans. Subject to Section 2.03(d), all LIBOR Loans shall
bear interest on the unpaid principal amount thereof during the Interest Period
applicable thereto at a rate per annum equal to the sum of LIBOR for such
Interest Period plus the Applicable Margin. Upon receipt of a Notice of
Borrowing or Notice of Continuation/Conversion requesting the making of,
continuation of and/or conversion to LIBOR Loans, Lender shall determine LIBOR
applicable to the Interest Period for such LIBOR Loans, and shall give notice
thereof to Borrower; provided, however, that failure to give such notice shall
not affect the validity of such rate. Each determination by Lender of LIBOR
shall be conclusive and binding upon the parties hereto in the absence of
demonstrable error. LIBOR Loans shall be in tranches of One Million Dollars
($1,000,000) or One Hundred Thousand Dollar ($100,000) increments in excess
thereof. No more than five (5) LIBOR Loan tranches shall be outstanding at any
one time.
(c) Interest Payments. Subject to Section 2.03(d), interest accrued on
all Loans shall be payable by Borrower in arrears on the first Business Day of
the first calendar month following the Closing Date, and the first Business Day
of each succeeding calendar month thereafter, and on the Termination Date.
(d) Default Interest. Notwithstanding the rates of interest specified
in Sections 2.03(a) and 2.03(b) and the payment dates specified in Section
2.03(c), effective immediately upon demand by Lender after the occurrence of an
Event of Default and during the continuance of any Event of Default, the
principal balance of all Loans then outstanding and, to the extent permitted by
applicable law, any interest payments on the Loans not paid when due shall bear
interest payable upon demand at a rate which is five percent (5%) per annum in
excess of the rate or rates of interest otherwise payable under this Agreement.
All other amounts due Lender (whether directly or for reimbursement) under this
Agreement or any of the other Loan Documents if not paid when due, or if no time
period is expressed, if not paid within fifteen (15) days after written demand
to Borrower, shall bear interest from and after demand at the rate which is five
percent (5%) per annum in excess of the lowest rate or rates of interest
otherwise payable under this Agreement, or, if no Loans are then outstanding, at
the rate which is five percent (5%) per annum in excess of the rate of interest
applicable to Base Rate Loans.
(e) Late Fee. Borrower acknowledges that late payment to Lender will
cause Lender to incur costs not contemplated by this Agreement. Such costs
include without limitation processing and accounting charges. Therefore, if
Borrower fails timely to pay any sum due and payable hereunder through the
Termination Date (other than payments of principal), a late charge of four cents
($.04) for each dollar of any interest payment due hereon and which is not paid
within ten (10) days after such payment is due or of any other amount due hereon
(other than payments of principal) and which is not paid within thirty (30) days
after such payment is due, shall be charged by Lender and paid by Borrower for
the purpose of defraying the expense incident to handling such delinquent
payment; provided, however, that no late charges shall be
24
assessed with respect to any amount for which Borrower is obligated to pay
interest at the rate specified in Section 2.03(d); provided, further, that in no
event shall Lender be required to refund any late fees paid by Borrower,
notwithstanding the preceding proviso. Borrower and Lender agree that this late
charge represents a reasonable sum considering all of the circumstances existing
on the date hereof and represents a fair and reasonable estimate of the costs
that Lender will incur by reason of late payment. Borrower and Lender further
agree that proof of actual damages would be costly and inconvenient. Acceptance
of any late charge shall not constitute a waiver of the default with respect to
the overdue installment, and shall not prevent Lender from exercising any of the
other rights available hereunder or under any other Loan Document. Such late
charge shall be paid without prejudice to any other rights of Lender.
(f) Computation of Interest. Interest and fees shall be computed on
the basis of the actual number of days elapsed in the period during which
interest or fees accrue and a year of three hundred sixty (360) days. In
computing interest on any Loan, the date of the making of the Loan shall be
included and the date of payment shall be excluded; provided, however, that if a
Loan is repaid on the same day on which it is made, one (1) day's interest shall
be paid on that Loan. Notwithstanding subsections (a), (b), (d) and (e) above,
interest in respect of any Loan or any portion thereof shall not exceed the
maximum rate permitted by applicable law.
(g) Changes; Legal Restrictions. In the event that after the Closing
Date (A) the adoption of or any change in any law, treaty, rule, regulation,
guideline or determination of a court or Governmental Authority or any change in
the interpretation or application thereof by a court or Governmental Authority,
or (B) compliance by Lender with any request or directive made or issued after
the Closing Date (whether or not having the force of law and whether or not the
failure to comply therewith would be unlawful) from any central bank or other
Governmental Authority or quasi-governmental authority:
(i) subjects Lender to any tax, duty or other charge of any kind
with respect to the Facility, this Agreement or any of the other Loan
Documents or changes the basis of taxation of payments to Lender of
principal, fees, interest or any other amount payable hereunder, except for
net income, gross receipts, gross profits or franchise taxes imposed by any
jurisdiction and not specifically based upon loan transactions;
(ii) imposes, modifies or holds applicable, in the determination
of Lender, any reserve, special deposit, compulsory loan, FDIC insurance,
capital allocation or similar requirement against assets held by, or
deposits or other liabilities in or for the account of, advances or loans
by, or other credit extended by, or any other acquisition of funds by,
Lender or any applicable lending office (except to the extent that reserve
and FDIC insurance requirements are reflected in the "Base Rate" or
"LIBOR"); or
(iii) imposes on Lender any other condition materially more
burdensome in nature, extent or consequence than those in existence as of
the Closing Date;
and the result of any of the foregoing is to (X) increase the cost to Lender of
making, renewing, maintaining or participating in the Loans or to reduce any
amount receivable hereunder or thereunder or (Y) to require Lender or any
applicable lending office to make any payment calculated by reference to the
amount of the Loans; then, in any such case, Borrower shall
25
promptly pay to Lender, upon demand, such amount or amounts (based upon a
reasonable allocation thereof by Lender to the financing transactions
contemplated by this Agreement and affected by this Section 2.03(g)) as may be
necessary to compensate Lender for any such additional cost incurred, reduced
amounts received or additional payments made to the extent Lender generally
imposes such additional costs, losses and payments on other borrowers of Lender
in similar circumstances. Lender shall deliver to Borrower a written statement
in reasonable detail of the claimed additional costs incurred, reduced amounts
received or additional payments made and the basis therefor as soon as
reasonably practicable after Lender obtains knowledge thereof.
(h) Certain Provisions Regarding LIBOR Loans.
(i) LIBOR Lending Unlawful. If Lender shall determine in good
faith that the introduction of or any change in or in the interpretation of
any law makes it unlawful, or any central bank or other governmental
authority asserts that it is unlawful, for Lender to make or maintain any
Loan as a LIBOR Loan, (A) the obligations of Lender to make or maintain any
Loans as LIBOR Loans shall, upon such determination, forthwith be suspended
until Lender shall notify Borrower that the circumstances causing such
suspension no longer exist, and (B) if required by law or such assertion,
all LIBOR Loans shall automatically convert into Base Rate Loans.
(ii) Deposits Unavailable. If Lender shall have determined in
good faith that adequate means do not exist for ascertaining the interest
rate applicable hereunder to LIBOR Loans, then, upon notice from Lender to
Borrower the obligations of Lender to make or maintain Loans as LIBOR Loans
shall forthwith be suspended until Lender shall notify Borrower that the
circumstances causing such suspension no longer exist. Lender will give
such notice when it determines, in good faith, that such circumstances no
longer exist; provided, however, that Lender shall not have any liability
to any Person with respect to any delay in giving such notice.
(iii) Funding Losses. In the event Lender shall incur any loss or
expense (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by Lender
to make or maintain any of the Loans as LIBOR Loans) as a result of:
(A) any continuance, conversion, repayment or prepayment of
the principal amount of any LIBOR Loans for any reason whatsoever on a
date other than the scheduled last day of the Interest Period
applicable thereto;
(B) any Loans not being made as LIBOR Loans in accordance
with the Notice of Borrowing therefor, other than as a result of
Lender's breach of its obligation to fund such Loans in accordance
with the terms hereof; or
(C) any Base Rate Loans not being converted into LIBOR Loans
or any LIBOR Loans not being continued as LIBOR Loans in accordance
with the Notice of Continuation/Conversion therefor, other than as a
result of Lender's breach of its obligation to continue or convert
such Loan in accordance with the terms hereof;
26
then, within fifteen (15) Business Days after Borrower's receipt of the
written notice of Lender to Borrower, Borrower shall reimburse Lender for
such loss or expense; provided, however, that Lender will use reasonable
efforts to minimize such loss or expense. Such written notice (which shall
include calculations in reasonable detail) shall, in the absence of
demonstrable error, be conclusive and binding on the parties hereto.
(i) Withholding Tax Exemption. Any assignee of all or a portion of
Lender's interest in the Loan in accordance with Section 12.15 (each such
assignee, an "Assignee") that is not created or organized under the laws of the
United States of America or a political subdivision thereof shall deliver to
Borrower and Lender, no later than the date upon which such Assignee becomes a
party hereto, a true and accurate certificate executed in duplicate by a duly
authorized officer of such Assignee, in a form satisfactory to Borrower and
Lender, to the effect that such Assignee is capable, under the provisions of an
applicable treaty concluded by the United States of America (in which case the
certificate shall be accompanied by three (3) accurate and complete duly
executed originals of Form W-8BEN of the Internal Revenue Service) or under
Section 1442 of the Internal Revenue Code (in which case the certificate shall
be accompanied by three (3) accurate and complete duly executed originals of
Form W-8ECI of the Internal Revenue Service), of receiving payments of
principal, interest and fees hereunder without deduction or withholding of
United States federal income tax. Further, if at any time Lender or any Assignee
changes its applicable lending office or selects an additional applicable
lending office, it shall, at the same time or promptly thereafter, but only to
the extent the certificate and forms previously delivered by it hereunder are no
longer applicable or effective, deliver to Borrower and Lender in replacement
for, or in addition to, the certificate and forms previously delivered by it
hereunder, a true and accurate certificate executed in duplicate by a duly
authorized officer of Lender or such Assignee accompanied by three (3) accurate
and complete duly executed originals of either Form W-8BEN of the Internal
Revenue Service or Form W-8ECI of the Internal Revenue Service, whichever is
applicable, indicating that Lender or such Assignee is entitled to receive
payments of principal, interest and fees for the account of such changed or
additional applicable lending office under this Agreement without deduction or
withholding of United States federal tax. Each such Assignee further agrees to
deliver to Borrower and Lender a true and accurate certificate executed in
duplicate by a duly authorized officer of such Assignee accompanied by three (3)
accurate and complete duly executed originals of either Form W-8BEN of the
Internal Revenue Service or Form W-8ECI of the Internal Revenue Service,
whichever is appropriate, substantially in a form satisfactory to Borrower and
Lender, before or promptly upon the occurrence of any event requiring a change
in the most recent certificate or Internal Revenue Service form previously
delivered by it to Borrower and Lender pursuant to this Section 2.03(i).
Further, each Assignee which delivers a certificate accompanied by Form W-8BEN
of the Internal Revenue Service covenants and agrees to deliver to Borrower and
Lender within fifteen (15) days prior to January 1, 2007, and every third (3rd)
anniversary of such date thereafter, on which this Agreement is still in effect,
another such certificate and three (3) accurate and complete original signed
copies of Form W-8BEN (or any successor form or forms required under the
Internal Revenue Code or the applicable regulations promulgated thereunder), and
each Assignee that delivers a certificate accompanied by Form W-8ECI of the
Internal Revenue Service covenants and agrees to deliver to Borrower and Lender
within fifteen (15) days prior to the beginning of each subsequent taxable year
of such Assignee during which this Agreement is still in effect, another such
certificate and three (3) accurate and complete original signed copies of
Internal Revenue Service Form W-8ECI (or any successor form or forms required
under the Internal Revenue Code or the applicable regulations
27
promulgated hereunder). If (i) Lender or any Assignee is required under this
Section 2.03(i) to provide a certificate or other evidence described above and
fails to deliver to Borrower and Lender such certificate or other evidence or
(ii) Lender or any Assignee delivers a certificate to the effect that, as a
result of the adoption of or any change in any law, treaty, rule, regulation,
guideline or determination of a Governmental Authority after the date Lender or
such Assignee became a party hereto, Lender or such Assignee is not capable of
receiving payments of interest hereunder without deduction or withholding of
United States federal income tax as specified therein and that it is not capable
of recovering the full amount of the same from a source other than Borrower,
then, to the extent required by law, as the sole consequence of Lender's or such
Assignee's failure to deliver the certificate described in (i) above or Lender's
or such Assignee's delivery of the certificate described in (ii) above, Borrower
shall be entitled to deduct or withhold taxes from the payments owed to Lender
or such Assignee.
2.04 Fees
(a) Intentionally Deleted.
(b) Commitment Fee. On the Closing Date and, until the Obligations are
paid in full and this Agreement is terminated, on each anniversary of the
Closing Date, Borrower shall pay to Lender a commitment fee equal to twenty
one-hundredths of one percent (0.20%) of the amount of the Facility. All such
commitment fees payable under this paragraph shall be payable in advance on the
Closing Date and on each anniversary of the Closing Date, or if any such
anniversary is not a Business Day, on the Business Day immediately preceding
such anniversary. All such commitment fees payable under this paragraph shall be
deemed fully earned when paid and are not refundable or proratable.
(c) Payment of Fees. The fees described in this Section 2.04 represent
compensation for services rendered and to be rendered separate and apart from
the lending of money or the provision of credit and do not constitute
compensation for the use, detention or forbearance of money, and the obligation
of Borrower to pay the fees described herein shall be in addition to, and not in
lieu of, the obligation of Borrower to pay interest, other fees and expenses
otherwise described in this Agreement. All fees shall be payable when due in
California in immediately available funds and shall be non-refundable when paid.
If Borrower fails to make any payment of fees or expenses specified or referred
to in this Agreement due to Lender, including without limitation those referred
to in this Section 2.04 or otherwise under this Agreement or any separate fee
agreement between Borrower and Lender relating to this Agreement, when due, the
amount due shall bear interest until paid at the Base Rate and, after five (5)
days at the rate specified in Section 2.03(d) (but not to exceed the maximum
rate permitted by applicable law) and shall constitute part of the Obligations.
All fees described in this Section 2.04 which are expressed as a per annum
charge shall be calculated on the basis of the actual number of days elapsed in
a three hundred sixty (360) day year.
2.05 Payments.
(a) Voluntary Prepayments. Borrower may, upon not less than three (3)
Business Days prior written notice, at any time and from time to time, prepay
any Loans, without premium or penalty (other than as set forth in Section
2.03(h)(iii)), in whole or in part in amounts not less than One Hundred Thousand
Dollars ($100,000) or integral multiples of Twenty-Five
28
Thousand Dollars ($25,000) in excess of One Hundred Thousand Dollars ($100,000).
Any notice of prepayment given to Lender under this Section 2.05(a) shall
specify the date of prepayment and the aggregate principal amount of the
prepayment. All prepayments of principal shall be accompanied by a payment of
all accrued and unpaid interest thereon.
(b) Manner and Time of Payment. All payments of principal, interest
and fees hereunder payable to Lender shall be made without condition or
reservation of right and free of set-off or counterclaim, in Dollars and by wire
transfer (pursuant to Lender's written wire transfer instructions) of
immediately available funds, delivered to Lender not later than 11:00 A.M.
(California time) on the date due; and funds received by Lender after that time
and date shall be deemed to have been paid on the next succeeding Business Day.
All payments of principal, interest and fees hereunder shall be made by wire
transfer of immediately available funds to Xxxxx Fargo Bank, N.A. (ABA number
000000000) for credit to account number AC2963507207 reference MHC Operating
Limited Partnership, loan number 100762 with telephonic notice to Xxx Xxxxx at
(000) 000-0000, account as Lender may specify in a written notice to Borrower.
(c) Payments on Non-Business Days. Whenever any payment to be made by
Borrower hereunder shall be stated to be due on a day which is not a Business
Day, payment shall be made on the next succeeding Business Day and such
extension of time shall be included in the computation of the payment of
interest hereunder and of any of the fees specified in Section 2.04, as the case
may be.
2.06 Increased Capital. If either (i) the introduction of or any
change in or in the interpretation of any law or regulation or (ii) compliance
by Lender with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law and whether or
not the failure to comply therewith would be unlawful) made or issued after the
Closing Date affects or would affect the amount of capital required or expected
to be maintained by Lender or any corporation controlling Lender, and Lender
determines that the amount of such capital is increased by or based upon the
existence of Lender's obligation to maintain, continue or convert to LIBOR Loans
hereunder, then, upon demand by Lender, Borrower shall immediately pay to
Lender, from time to time as specified by Lender, additional amounts sufficient
to compensate Lender in light of such circumstances, to the extent that Lender
reasonably determines such increase in capital to be allocable to the existence
of Lender's obligations hereunder and to the extent Lender generally imposes
such amounts on other borrowers of Lender in similar circumstances. A
certificate as to such amounts submitted to Borrower by Lender shall, in the
absence of manifest error, be conclusive and binding for all purposes.
2.07 Notice of Increased Costs. Lender agrees that, as promptly as
reasonably practicable after it becomes aware of the occurrence of an event or
the existence of a condition which would cause it to be affected by any of the
events or conditions described in Section 2.03(g) or (h), or Section 2.06, it
will notify Borrower and provide in such notice a reasonably detailed
calculation of the amount due from Borrower, such event and the possible effects
thereof. If Lender shall fail to notify Borrower of the occurrence of any such
event or the existence of any such condition within ninety (90) days following
the end of the month during which such event occurred or such condition arose,
then Borrower's liability for any amounts described in said Sections 2.03(g) and
(h) and Section 2.06 incurred by Lender as a result of such
29
event or condition shall be limited to those attributable to the period
occurring subsequent to the ninetieth (90th) day prior to the date upon which
Lender actually notified Borrower of such event or condition.
2.08 Funds Transfer Disbursements. (a) Borrower hereby authorizes
Lender to disburse the proceeds of the Loan pursuant to the Loan Documents as
requested by an authorized representative of the Borrower to any of the accounts
designated by Borrower in a Transfer Authorizer Designation in the form of
Exhibit C hereto. Borrower agrees to be bound by any transfer request: (i)
authorized or transmitted by Borrower; or, (ii) made in Borrower's name and
accepted by Lender in good faith and in compliance with these transfer
instructions, even if not properly authorized by Borrower. Borrower further
agrees and acknowledges that Lender may rely solely on any bank routing number
or identifying bank account number or name provided by Borrower to effect a wire
or funds transfer even if the information provided by Borrower identifies a
different bank or account holder than named by the Borrower. Lender is not
obligated or required in any way to take any actions to detect errors in
information provided by Borrower. If Lender takes any actions in an attempt to
detect errors in the transmission or content of transfer or requests or takes
any actions in an attempt to detect unauthorized funds transfer requests,
Borrower agrees that no matter how many times Lender takes these actions Lender
will not in any situation be liable for failing to take or correctly perform
these actions in the future and such actions shall not become any part of the
transfer disbursement procedures authorized under this provision, the Loan
Documents, or any agreement between Lender and Borrower. Borrower agrees to
notify Lender of any errors in the transfer of any funds or of any unauthorized
or improperly authorized transfer requests within 14 days after Lender's
confirmation to Borrower of such transfer.
(b) Lender will, in its sole discretion, determine the funds transfer
system and the means by which each transfer will be made. Lender may delay or
refuse to accept a funds transfer request if the transfer would: (i) violate the
terms of this authorization (ii) require use of a bank unacceptable to Lender or
prohibited by government authority; (iii) cause Lender to violate any Federal
Reserve or other regulatory risk control program or guideline, or (iii)
otherwise cause Lender to violate any applicable law or regulation.
(c) Lender shall not be liable to Borrower or any other parties for
(i) errors, acts or failures to act of others, including other entities, banks,
communications carriers or clearinghouses, through which Borrower's transfers
may be made or information received or transmitted, and no such entity shall be
deemed an agent of Lender, (ii) any loss, liability or delay caused by fires,
earthquakes, wars, civil disturbances, power surges or failures, acts of
government, labor disputes, failures in communications networks, legal
constraints or other events beyond Lender's control, or (iii) any special,
consequential, indirect or punitive damages, whether or not (a) any claim for
these damages is based on tort or contract or (b) Lender or Borrower knew or
should have known the likelihood of these damages in any situation. Lender makes
no representations or warranties other than those expressly made in this
Agreement.
ARTICLE III.
EXTENSION OPTION
3.01 Extension Option. At the written request of Borrower made to
Lender at least thirty (30) days prior to the Initial Maturity Date, the
Maturity Date shall be extended to the
30
one-year anniversary of the Initial Maturity Date (the "Extended Maturity Date")
provided that the following conditions are satisfied:
(a) no Event of Default or Unmatured Event of Default shall have
occurred and be continuing as of the Initial Maturity Date;
(b) all representations and warranties made by Borrower, the REIT, MHC
Trust and T1000 Trust contained in this Agreement and the other Loan Documents
shall be true and correct in all material respects as of the Initial Maturity
Date except to the extent they related to a specific date;
(c) Lender shall have received Officer's Certificates of the REIT
dated as of the Initial Maturity Date stating that the executive officer who is
the signatory thereto, which officer shall be the chief executive officer or the
chief financial officer of the REIT, has reviewed, or caused under his
supervision to be reviewed, the terms of this Agreement and the other Loan
Documents, and has made, or caused to be made under his supervision, a review in
reasonable detail of the transactions and condition of Borrower, the REIT, MHC
Trust, the Subsidiaries, and the Agreement Parties, and that (A) such review has
not disclosed the existence as of the date of such Officer's Certificate, and
that the signer does not have knowledge of the existence as of the date of such
Officer's Certificate, of any condition or event which constitutes an Event of
Default or Unmatured Event of Default and (B) all representations and warranties
made by such entities contained in this Agreement and the other Loan Documents
are true and correct in all material respects as of the date of such Officer's
Certificate except to the extent they relate to a specific date; and
(d) on or before the Initial Maturity Date, Lender shall have received
an extension fee in the amount of fifteen one-hundredths of one percent (0.15%)
of the amount of the Facility.
ARTICLE IV.
CONDITIONS TO LOANS
4.01 Intentionally Omitted.
4.02 Conditions Precedent to All Loans. The obligation of Lender to
make any Loan requested to be made on any date shall be subject to satisfaction
of each of the following conditions precedent on or before the applicable
Funding Date:
(a) Notice of Borrowing. Borrower shall have delivered to Lender a
Notice of Borrowing in compliance with Section 2.01(b).
(b) Representations and Warranties. All of the representations and
warranties made by Borrower, the REIT, MHC Trust and T1000 Trust in this
Agreement and in any other Loan Document (other than representations and
warranties which speak only as of a different date) shall be true and correct in
all material respects as of the applicable Funding Date, as though made on and
as of such date.
31
(c) No Default. No Event of Default or Unmatured Event of Default
shall have occurred and be continuing or would result from the making of the
requested Loan and all of the financial covenants contained in Articles VIII and
IX shall be satisfied.
(d) No Material Adverse Change. No change shall have occurred which
shall have a Material Adverse Effect.
Each submission by Borrower to Lender of a Notice of Borrowing with
respect to a Loan and the acceptance by Borrower of the proceeds of each such
Loan made hereunder shall constitute a representation and warranty by Borrower
as of the applicable Funding Date that all conditions contained in this Section
4.02 have been satisfied.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
5.01 Representations and Warranties as to Borrower. Borrower hereby
represents and warrants to Lender as follows:
(a) Organization; Partnership Powers. Borrower (i) is a limited
partnership duly organized, validly existing and in good standing under the laws
of the state of Illinois, (ii) is duly qualified to do business as a foreign
limited partnership and in good standing under the laws of each jurisdiction in
which the nature of its business requires it to be so qualified, except for
those jurisdictions where failure to so qualify and be in good standing would
not have a Material Adverse Effect and (iii) has all requisite partnership power
and authority to own, operate and encumber its property and assets and to
conduct its business as presently conducted and as proposed to be conducted in
connection with and following the consummation of the transactions contemplated
by the Loan Documents.
(b) Authority. Borrower has the requisite partnership power and
authority to execute, deliver and perform each of the Loan Documents to which it
is or will be a party. The execution, delivery and performance thereof, and the
consummation of the transactions contemplated thereby, have been duly approved
by the general partner of Borrower, and no other partnership proceedings or
authorizations on the part of Borrower or its general or limited partners are
necessary to consummate such transactions. Each of the Loan Documents to which
Borrower is a party has been duly executed and delivered by Borrower and
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms, subject to bankruptcy, insolvency and other laws
affecting creditors' rights generally and general equitable principles.
(c) Ownership of Borrower. Schedule 5.01(c) sets forth the general
partners of Borrower and their respective ownership percentages as of the date
hereof. Except as set forth in the partnership agreement of Borrower, no
partnership interests (or any securities, instruments, warrants, option or
purchase rights, conversion or exchange rights, calls, commitments or claims of
any character convertible into or exercisable for partnership interests) of
Borrower are subject to issuance under any security, instrument, warrant, option
or purchase rights, conversion or exchange rights, call, commitment or claim of
any right, title or interest therein or thereto. To
32
Borrower's knowledge, all of the partnership interests in Borrower have been
issued in compliance with all applicable Requirements of Law.
(d) No Conflict. The execution, delivery and performance by Borrower
of the Loan Documents to which it is or will be a party, and each of the
transactions contemplated thereby, do not and will not (i) conflict with or
violate Borrower's limited partnership agreement or Certificate of Limited
Partnership or other organizational documents, as the case may be, or the
organizational documents of any Subsidiary of Borrower or (ii) conflict with,
result in a breach of or constitute (with or without notice or lapse of time or
both) a default under any Requirement of Law, Contractual Obligation or Court
Order of or binding upon Borrower or any of its Subsidiaries, or require
termination of any such Contractual Obligation, the consequences of which
conflict or breach or default or termination would have a Material Adverse
Effect, or result in or require the creation or imposition of any Lien
whatsoever upon any Property (except as contemplated herein).
(e) Consents and Authorizations. Borrower has obtained all consents
and authorizations required pursuant to its Contractual Obligations with any
other Person, the failure of which to obtain would have a Material Adverse
Effect, and has obtained all consents and authorizations of, and effected all
notices to and filings with, any Governmental Authority necessary to allow
Borrower to lawfully execute, deliver and perform its obligations under the Loan
Documents to which Borrower is a party.
(f) Governmental Regulation. Borrower is not subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, the Investment Company Act of 1940 or any other federal
or state statute or regulation such that its ability to incur indebtedness is
limited or its ability to consummate the transactions contemplated by the Loan
Documents is materially impaired.
(g) Prior Financials. The Consolidated and Combined Balance Sheet as
of March 31, 2006, the Consolidated and Combined Statement of Operations for the
Quarter Ended March 31, 2006, and the Consolidated and Combined Statement of
Cash Flows for the Quarter Ended March 31, 2006 of the REIT contained in the
Form 10-Q Quarterly Report of the REIT as of March 31, 2006 (the "Pre-Closing
Financials") delivered to Lender prior to the date hereof were prepared in
accordance with GAAP in effect on the date such Pre-Closing Financials were
prepared and fairly present the assets, liabilities and financial condition of
the REIT, on a consolidated basis, at such date and the results of its
operations and its cash flows, on a consolidated basis, for the period then
ended.
(h) Financial Statements; Projections and Forecasts. Each of the
Financial Statements to be delivered to Lender pursuant to Sections 6.01(a) and
(b), (i) has been, or will be, as applicable, prepared in accordance with the
books and records of the REIT, on a consolidated basis, and (ii) either fairly
present, or will fairly present, as applicable, the financial condition of the
REIT, on a consolidated basis, at the dates thereof (and, if applicable, subject
to normal year-end adjustments) and the results of its operations and cash
flows, on a consolidated basis, for the period then ended. Each of the
projections delivered to Lender (A) has been, or will be, as applicable,
prepared by the REIT and the REIT's financial personnel in light of the past
business and performance of the REIT, on a consolidated basis and (B) represent,
or will represent, as of the date thereof, the reasonable good faith estimates
of such personnel.
33
(i) Litigation; Adverse Effects.
(i) There is no action, suit, proceeding, governmental investigation
or arbitration, at law or in equity, or before or by any Governmental
Authority, pending, or to the best of Borrower's knowledge, threatened
against Borrower or any of its Subsidiaries or any of their respective
Properties, in which there is a reasonable possibility of an adverse
decision that could have a Material Adverse Effect; and
(ii) Neither Borrower nor any of its Subsidiaries is (A) in violation
of any Requirement of Law, which violation has a Material Adverse Effect,
or (B) subject to or in default with respect to any Court Order which has a
Material Adverse Effect.
(j) No Material Adverse Change. Since March 31, 2006, there has
occurred no event which has a Material Adverse Effect.
(k) Payment of Taxes. All material tax returns and material reports to
be filed by Borrower or any of its Subsidiaries have been timely filed, and all
taxes, assessments, fees and other governmental charges shown on such returns
have been paid when due and payable, except such taxes, if any, as are reserved
against in accordance with GAAP, such taxes as are being contested in good faith
by appropriate proceedings or such taxes, the failure to make payment of which
when due and payable will not have, in the aggregate, a Material Adverse Effect.
Borrower has no knowledge of any proposed tax assessment against Borrower or any
of its Subsidiaries that will have a Material Adverse Effect, which is not being
actively contested in good faith by such Person.
(l) Material Adverse Agreements. Neither Borrower nor any of its
Subsidiaries is a party to or subject to any Contractual Obligation or other
restriction contained in its partnership agreement, certificate of partnership,
by-laws, or similar governing documents which has a Material Adverse Effect.
(m) Performance. Neither Borrower nor any of its Subsidiaries is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any Contractual Obligation applicable to
it, and no condition exists which, with the giving of notice or the lapse of
time or both, would constitute a default under such Contractual Obligation in
each case, except where the consequences, direct or indirect, of such default or
defaults, if any, will not have a Material Adverse Effect.
(n) Federal Reserve Regulations. No part of the proceeds of the Loans
hereunder will be used to purchase or carry any "margin security" as defined in
Regulation U or for the purpose of reducing or retiring any indebtedness which
was originally incurred to purchase or carry any margin security or for any
other purpose which might constitute this transaction a "purpose credit" within
the meaning of said Regulation U. Borrower is not engaged primarily in the
business of extending credit for the purpose of purchasing or carrying any
"margin stock" as defined in Regulation U. Borrower is not engaged primarily in
the business of extending credit for the purpose of purchasing or carrying any
"margin stock" as defined in Regulation U. No part of the proceeds of the Loans
will be used for any purpose that violates, or which is inconsistent with, the
provisions of Regulation X or any other regulation of the Federal Reserve Board.
34
(o) Disclosure. Borrower has not intentionally or knowingly withheld
any material fact from Lender in regard to any matter raised in the Loan
Documents. Notwithstanding the foregoing, with respect to any projections of
Borrower's future performance such representations and warranties are made in
good faith and to the best judgment of Borrower at the time such projections
were made.
(p) Requirements of Law. To Borrower's knowledge, Borrower and each of
its Subsidiaries are in compliance with all Requirements of Law (including
without limitation the Securities Act and the Securities Exchange Act, and the
applicable rules and regulations thereunder, state securities law and "Blue Sky"
laws) applicable to them and their respective businesses, in each case, where
the failure to so comply will have a Material Adverse Effect.
(q) Patents, Trademarks, Permits, Etc. Borrower and each of its
Subsidiaries owns, is licensed or otherwise has the lawful right to use, or has
all permits and other governmental approvals, patents, trademarks, trade names,
copyrights, technology, know-how and processes used in or necessary for the
conduct of Borrower's or such Subsidiary's business as currently conducted, the
absence of which would have a Material Adverse Effect. To Borrower's knowledge,
the use of such permits and other governmental approvals, patents, trademarks,
trade names, copyrights, technology, know-how and processes by Borrower or such
Subsidiary does not infringe on the rights of any Person, subject to such claims
and infringements as do not, in the aggregate, have a Material Adverse Effect.
(r) Environmental Matters. To the knowledge of Borrower, except as
would not have a Material Adverse Effect and except as set forth on Schedule
5.01(r), (i) the Property and operations of Borrower and each of its
Subsidiaries comply in all material respects with all applicable Environmental
Laws; (ii) none of the Property or operations of Borrower or any of its
Subsidiaries are subject to any Remedial Action or other Liabilities and Costs
arising from the Release or threatened Release of a Contaminant into the
environment or from the violation of any Environmental Laws, which Remedial
Action or other Liabilities and Costs would have a Material Adverse Effect;
(iii) neither Borrower nor any of its Subsidiaries has filed any notice under
applicable Environmental Laws reporting a Release of a Contaminant into the
environment in violation of any Environmental Laws, except as the same may have
been heretofore remedied; (iv) there is not now, nor to Borrower's knowledge has
there ever been, on or in the Property of Borrower or any of its Subsidiaries
(except in compliance in all material respects with all applicable Environmental
Laws): (A) any underground storage tanks, (B) any asbestos-containing material,
(C) any polychlorinated biphenyls (PCB's) used in hydraulic oils, electrical
transformers or other equipment, (D) any petroleum hydrocarbons or (E) any
chlorinated or halogenated solvents; and (v) neither Borrower nor any of its
Subsidiaries has received any notice or claim to the effect that it is or may be
liable to any Person as a result of the Release or threatened Release of a
Contaminant into the environment.
(s) ERISA. None of the REIT, Borrower or any Agreement Party is an
"employee pension benefit plan" as defined in Section 3(2) of ERISA, an
"employee welfare benefit plan" as defined in Section 3(1) of ERISA, a
"multiemployer plan" as defined in Sections 4001(a)(3) or 3(37) of ERISA or a
"plan" as defined in Section 4975(e)(1) of the Internal Revenue Code. Except for
a prohibited transaction arising solely because of Lender's breach of the
covenant set forth in Section 12.23, none of the Obligations, any of the Loan
Documents or the exercise of any of Lender's rights in connection therewith
constitutes a prohibited transaction
35
under ERISA or the Internal Revenue Code (which is not exempt from the
restrictions of Section 406 of ERISA and the taxes and penalties imposed by
Section 4975 of the Internal Revenue Code and Section 502(i) of ERISA) or
otherwise results in Lender being deemed in violation of Sections 404 or 406 of
ERISA or Section 4975 of the Internal Revenue Code or will by itself result in
Lender being a fiduciary or party in interest under ERISA or a "disqualified
person" as defined in Section 4975(e)(2) of the Internal Revenue Code with
respect to an "employee benefit plan" within the meaning of Section 3(3) of
ERISA or a "plan" within the meaning of Section 4975(e)(1) of the Internal
Revenue Code. No assets of the REIT, Borrower or any Agreement Party constitute
"assets" (within the meaning of 29 C.F.R. Section 2510.3-101 or any successor
regulation thereto) of an "employee benefit plan" within the meaning of Section
3(3) of ERISA or a "plan" within the meaning of Section 4975(e)(1) of the
Internal Revenue Code.
Each Borrower Plan is in compliance with ERISA and the applicable
provisions of the Internal Revenue Code in all respects except where the failure
to comply would not have a Material Adverse Effect. There are no claims (other
than claims for benefits in the normal course), actions or lawsuits asserted or
instituted against, and none of Borrower, the REIT, any of the Subsidiaries or
any of their ERISA Affiliates has knowledge of any threatened litigation or
claims against the assets of any Borrower Plan or against any fiduciary of such
Borrower Plan with respect to the operation of such Borrower Plan which could
have a Material Adverse Effect. No liability to the PBGC has been, or is likely
to be, incurred by Borrower, the REIT, any of the Subsidiaries or their ERISA
Affiliates other than such liabilities which, in the aggregate, would not have a
Material Adverse Effect. None of Borrower, the REIT, any of the Subsidiaries or
any of their ERISA Affiliates is now contributing to or has ever contributed to
or been obligated to contribute to any Multiemployer Plan, no employees or
former employees of Borrower, the REIT, any of the Subsidiaries or any of their
ERISA Affiliates have been covered by any Multiemployer Plan in respect of their
employment by Borrower or such Subsidiary or such ERISA Affiliate. None of
Borrower, the REIT, any of the Subsidiaries or any of their ERISA Affiliates has
engaged in a "prohibited transaction," as such term is defined in Section 4975
of the Internal Revenue Code or in a transaction subject to the prohibitions of
Section 406 of ERISA, in connection with any Benefit Plan or Welfare Plan which
would subject Borrower, the REIT, any of the Subsidiaries or any of their ERISA
Affiliates (after giving effect to any exemption) to the tax or penalty on
prohibited transactions imposed by Section 4975 of the Internal Revenue Code,
Section 502 of ERISA or any other liability under ERISA which tax, penalty or
other liability would have a Material Adverse Effect. None of the Benefit Plans
subject to Title IV of ERISA has any material Unfunded Pension Liability as to
which Borrower, the REIT, any of the Subsidiaries or any of their ERISA
Affiliates is or may be liable, which liability would have a Material Adverse
Effect.
(t) Solvency. Borrower is and will be Solvent after giving effect to
the disbursements of the Loans and the payment and accrual of all fees then
payable hereunder.
(u) Title to Assets; No Liens. Borrower has good, indefeasible and
merchantable title to the Property owned or leased by it, and all such Property
is free and clear of all Liens, except Permitted Liens and Liens permitted by
Section 8.01(b).
(v) Use of Proceeds. Borrower's uses of the proceeds of the Loans are,
and will continue to be, legal and proper uses (and to the extent necessary,
duly authorized by
36
Borrower's partners) and such uses are consistent with all applicable laws and
statutes and Section 7.01(i).
(w) [intentionally omitted]
(x) Tax Shelter Representation. Neither Borrower, MHC Trust, the REIT
nor any Affiliate of any of the foregoing intends to treat the Loans or the
transactions contemplated by this Agreement and the other Loan Documents as
being a "reportable transaction" (within the meaning of Treasury Regulation
Section 1.6011-4). If Borrower, or any other party to the Loans, determines to
take any action inconsistent with such intention, Borrower will promptly notify
Lender thereof. If Borrower so notifies Lender, Borrower acknowledges that
Lender may treat the Loans as part of a transaction that is subject to Treasury
Regulation Section 301.6112-1, and Lender will maintain the lists and other
records, including the identity of the applicable party to the Loans, as
required by such Treasury Regulation.
5.02 Representations and Warranties as to the REIT. The REIT hereby
represents and warrants to Lender as follows:
(a) Organization; Corporate Powers. The REIT (i) is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Maryland, (ii) is duly qualified to do business as a foreign corporation and in
good standing under the laws of each jurisdiction in which the nature of its
business requires it to be so qualified, except for those jurisdictions where
failure to so qualify and be in good standing would not have a Material Adverse
Effect, and (iii) has all requisite corporate power and authority to own,
operate and encumber its property and assets and to conduct its business as
presently conducted and as proposed to be conducted in connection with and
following the consummation of the transactions contemplated by the Loan
Documents.
(b) Authority. The REIT has the requisite corporate power and
authority to execute, deliver and perform each of the Loan Documents to which it
is or will be a party. The execution, delivery and performance thereof, and the
consummation of the transactions contemplated thereby, have been duly approved
by the Board of Directors of the REIT, and no other corporate proceedings on the
part of the REIT are necessary to consummate such transactions. Each of the Loan
Documents to which the REIT is a party has been duly executed and delivered by
the REIT and constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms, subject to bankruptcy, insolvency and
other laws affecting creditors' rights generally and general equitable
principles.
(c) No Conflict. The execution, delivery and performance by the REIT
of the Loan Documents to which it is a party, and each of the transactions
contemplated thereby, do not and will not (i) conflict with or violate its
Articles or Certificate of Incorporation or by-laws, or other organizational
documents, as the case may be, or the organizational documents of Borrower or
any Subsidiary, (ii) conflict with, result in a breach of or constitute (with or
without notice or lapse of time or both) a default under any Requirement of Law,
Contractual Obligation or Court Order of the REIT, Borrower or any Subsidiary,
or require termination of any such Contractual Obligation, the consequences of
which conflict or breach or default or termination will have a Material Adverse
Effect, or result in or require the creation or imposition of any Lien
37
whatsoever upon any of its Property, or (iii) require any approval of the
stockholders of the REIT.
(d) Consents and Authorizations. The REIT has obtained all consents
and authorizations required pursuant to its Contractual Obligations with any
other Person, the failure of which to obtain would have a Material Adverse
Effect, and has obtained all consents and authorizations of, and effected all
notices to and filings with, any Governmental Authority necessary to allow the
REIT to lawfully execute, deliver and perform its obligations under the Loan
Documents to which the REIT is a party.
(e) Governmental Regulation. The REIT is not subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, the Investment Company Act of 1940 or any other federal
or state statute or regulation such that its ability to incur indebtedness is
limited or its ability to consummate the transactions contemplated by the Loan
Documents is materially impaired.
(f) Capitalization. To the REIT's knowledge, all of the capital stock
of the REIT has been issued in compliance with all applicable Requirements of
Law.
(g) Litigation; Adverse Effects.
(i) There is no action, suit, proceeding, governmental investigation
or arbitration, at law or in equity, or before or by any Governmental
Authority, pending, or to best of the REIT's knowledge, threatened against
the REIT, any of its Subsidiaries or any of their respective Properties in
which there is a reasonable possibility of an adverse decision that could
have a Material Adverse Effect; and
(ii) Neither the REIT nor any of its Subsidiaries is (A) in violation
of any applicable Requirement of Law, which violation has a Material
Adverse Effect, or (B) subject to or in default with respect to any Court
Order which has a Material Adverse Effect.
(h) Payment of Taxes. All tax returns and reports to be filed by the
REIT or any of its Subsidiaries have been timely filed, and all taxes,
assessments, fees and other governmental charges shown on such returns have been
paid when due and payable, except such taxes, if any, as are reserved against in
accordance with GAAP, such taxes as are being contested in good faith by
appropriate proceedings or such taxes, the failure to make payment of which when
due and payable would not have, in the aggregate, a Material Adverse Effect. The
REIT has no knowledge of any proposed tax assessment against the REIT or any of
its Subsidiaries that would have a Material Adverse Effect, which is not being
actively contested in good faith by the REIT or such Subsidiary.
(i) Material Adverse Agreements. The REIT is not a party to or subject
to any Contractual Obligation or other restriction contained in its charter,
by-laws, or similar governing documents which has a Material Adverse Effect.
(j) Performance. Neither the REIT nor any of its Subsidiaries is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any Contractual Obligation applicable to
it, and no condition exists which, with the
38
giving of notice or the lapse of time or both, would constitute a default under
such Contractual Obligation in each case, except where the consequences, direct
or indirect, of such default or defaults, if any, would not have a Material
Adverse Effect.
(k) Securities Activities. The REIT is not engaged principally in the
business of extending credit for the purpose of purchasing or carrying any
"margin stock" (as defined in Regulation U).
(l) Disclosure. The REIT has not intentionally or knowingly withheld
any material fact from Lender in regard to any matter raised in the Loan
Documents. Notwithstanding the foregoing, with respect to any projections of the
REIT's future performance such representations and warranties are made in good
faith and to the best judgment of the management of the REIT at the time such
projections were made.
(m) Requirements of Law. To the REIT's knowledge, the REIT and each of
its Subsidiaries are in compliance with all Requirements of Law (including
without limitation the Securities Act and the Securities Exchange Act, and the
applicable rules and regulations thereunder, state securities law and "Blue Sky"
laws) applicable to them and their respective businesses, in each case, where
the failure to so comply would have a Material Adverse Effect. After giving
effect to all filings made simultaneously with the Closing Date, the REIT has
made all filings with and obtained all consents of the Commission required under
the Securities Act and the Securities Exchange Act in connection with the
execution, delivery and performance by the REIT of the Loan Documents to which
it is a party.
(n) Patents, Trademarks, Permits, Etc. The REIT and each of its
Subsidiaries owns, is licensed or otherwise has the lawful right to use, or has
all permits and other governmental approvals, patents, trademarks, trade names,
copyrights, technology, know-how and processes used in or necessary for the
conduct of the REIT's or such Subsidiary's business as currently conducted, the
absence of which would have a Material Adverse Effect. To the REIT's knowledge,
the use of such permits and other governmental approvals, patents, trademarks,
trade names, copyrights, technology, know-how and processes by the REIT or such
Subsidiary does not infringe on the rights of any Person, subject to such claims
and infringements as do not, in the aggregate, have a Material Adverse Effect.
(o) Environmental Matters. To the knowledge of the REIT, except as
would not have a Material Adverse Effect and except as set forth on Schedule
5.01(r), (i) the Property and operations of the REIT and each of its
Subsidiaries comply in all material respects with all applicable Environmental
Laws; (ii) none of the Property or operations of the REIT or any of its
Subsidiaries are subject to any Remedial Action or other Liabilities and Costs
arising from the Release or threatened Release of a Contaminant into the
environment or from the violation of any Environmental Laws, which Remedial
Action or other Liabilities and Costs would have a Material Adverse Effect;
(iii) neither the REIT nor any of its Subsidiaries has filed any notice under
applicable Environmental Laws reporting a Release of a Contaminant into the
environment in violation of any Environmental Laws, except as the same may have
been heretofore remedied; (iv) there is not now, nor to the REIT's knowledge has
there ever been, on or in the Property of the REIT or any of its Subsidiaries
(except in compliance in all material respects with all applicable Environmental
Laws): (A) any underground storage tanks, (B) any asbestos-containing material,
(C) any polychlorinated biphenyls (PCB's) used in hydraulic oils, electrical
39
transformers or other equipment, (D) any petroleum hydrocarbons or (E) any
chlorinated or halogenated solvents; and (v) neither the REIT nor any of its
Subsidiaries has received any notice or claim to the effect that it is or may be
liable to any Person as a result of the Release or threatened Release of a
Contaminant into the environment.
(p) Solvency. The REIT is and will be Solvent after giving effect to
the disbursement of the Loans and the payment of all fees then payable
hereunder.
(q) Status as a REIT. The REIT (i) is a real estate investment trust
as defined in Section 856 of the Internal Revenue Code (or any successor
provision thereto), (ii) has not revoked its election to be a real estate
investment trust, (iii) has not recognized any material "net income from
prohibited transactions" as defined in Section 857(b)(6)(B)(i) of the Internal
Revenue Code (or any successor provision thereto), and (iv) for its current "tax
year" (as defined in the Internal Revenue Code) is and for all prior tax years
subsequent to its election to be a real estate investment trust has been
entitled to a dividends paid deduction which meets the requirements of Section
857 of the Internal Revenue Code.
(r) [intentionally omitted]
(s) Listing. The common stock of the REIT is and will continue to be
listed for trading and traded on either the New York Stock Exchange or American
Stock Exchange.
(t) Tax Shelter Representation. Neither Borrower, MHC Trust, the REIT
nor any Affiliate of any of the foregoing intends to treat the Loans or the
transactions contemplated by this Agreement and the other Loan Documents as
being a "reportable transaction" (within the meaning of Treasury Regulation
Section 1.6011-4). If the REIT, or any other party to the Loans determines to
take any action inconsistent with such intention, the REIT will promptly notify
Lender thereof. If the REIT so notifies Lender, Borrower acknowledges that
Lender may treat the Loans as part of a transaction that is subject to Treasury
Regulation Section 301.6112-1, and Lender will maintain the lists and other
records, including the identity of the applicable party to the Loans as required
by such Treasury Regulation.
5.03 Representations and Warranties as to MHC Trust . MHC Trust hereby
represents and warrants to Lender as follows:
(a) Organization; Trust or Corporate Powers. MHC Trust (i) is a real
estate investment trust duly organized, validly existing and in good standing
under the laws of the State of Maryland, (ii) is duly qualified to do business
and in good standing under the laws of each jurisdiction in which the nature of
its business requires it to be so qualified, except for those jurisdictions
where failure to so qualify and be in good standing would not have a Material
Adverse Effect, and (iii) has all requisite trust or corporate power and
authority to conduct its business as presently conducted and as proposed to be
conducted in connection with and following the consummation of the transactions
contemplated by the Loan Documents.
(b) Authority. MHC Trust has the requisite trust or corporate power
and authority to execute, deliver and perform each of the Loan Documents to
which it is or will be a party. The execution, delivery and performance thereof,
and the consummation of the transactions contemplated thereby, have been duly
approved by the trustees of MHC Trust, and no other trust or corporate
proceedings on the part of MHC Trust are necessary to consummate
40
such transactions. Each of the Loan Documents to which MHC Trust is a party has
been duly executed and delivered by MHC Trust and constitutes its legal, valid
and binding obligation, enforceable against it in accordance with its terms,
subject to bankruptcy, insolvency and other laws affecting creditors' rights
generally and general equitable principles.
(c) No Conflict. The execution, delivery and performance by MHC Trust
of the Loan Documents to which it is a party, and each of the transactions
contemplated thereby, do not and will not (i) conflict with or violate its
Declaration of Trust or by-laws, or other organizational documents, as the case
may be, or (ii) require any approval of the beneficiaries or shareholders of MHC
Trust.
(d) Consents and Authorizations. MHC Trust has obtained all consents
and authorizations required pursuant to its Contractual Obligations with any
other Person, the failure of which to obtain would have a Material Adverse
Effect, and has obtained all consents and authorizations of, and effected all
notices to and filings with, any Governmental Authority necessary to allow MHC
Trust to lawfully execute, deliver and perform its obligations under the Loan
Documents to which MHC Trust is a party.
(e) Governmental Regulation. MHC Trust is not subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, the Investment Company Act of 1940 or any other federal
or state statute or regulation such that its ability to incur indebtedness is
limited or its ability to consummate the transactions contemplated by the Loan
Documents is materially impaired.
(f) Material Adverse Agreements. MHC Trust is not a party to or
subject to any Contractual Obligation or other restriction contained in its
charter, by-laws, or similar governing documents which has a Material Adverse
Effect.
(g) Securities Activities. MHC Trust is not engaged principally in the
business of extending credit for the purpose of purchasing or carrying any
"margin stock" (as defined in Regulation U).
(h) Disclosure. MHC Trust has not intentionally or knowingly withheld
any material fact from Lender in regard to any matter raised in the Loan
Documents. Notwithstanding the foregoing, with respect to any projections of MHC
Trust's future performance such representations and warranties are made in good
faith and to the best judgment of the officers of MHC Trust at the time such
projections were made.
(i) Solvency. MHC Trust is and will be Solvent after giving effect to
the disbursement of the Loans and the payment of all fees then payable
hereunder.
(j) Status as a REIT. MHC Trust (i) is a real estate investment trust
as defined in Section 856 of the Internal Revenue Code (or any successor
provision thereto), (ii) has not revoked its election to be a real estate
investment trust, (iii) has not recognized any material "net income from
prohibited transactions" as defined in Section 856(b)(6)(B)(i) of the Internal
Revenue Code (or any successor provision thereto), and (iv) for its current "tax
year" (as defined in the Internal Revenue Code) is and for all prior tax years
subsequent to its election to be a real estate investment trust has been
entitled to a dividends paid deduction which meets the requirements of Section
857 of the Internal Revenue Code.
41
(k) [intentionally omitted]
5.04 Representations and Warranties as to T1000 Trust. T1000 Trust
hereby represents and warrants to Lender as follows:
(a) Organization; Trust or Corporate Powers. T1000 Trust (i) is a real
estate investment trust duly organized, validly existing and in good standing
under the laws of the State of Maryland, (ii) is duly qualified to do business
and in good standing under the laws of each jurisdiction in which the nature of
its business requires it to be so qualified, except for those jurisdictions
where failure to so qualify and be in good standing would not have a Material
Adverse Effect, and (iii) has all requisite trust or corporate power and
authority to conduct its business as presently conducted and as proposed to be
conducted in connection with and following the consummation of the transactions
contemplated by the Loan Documents.
(b) Authority. T1000 Trust has the requisite trust or corporate power
and authority to execute, deliver and perform each of the Loan Documents to
which it is or will be a party. The execution, delivery and performance thereof,
and the consummation of the transactions contemplated thereby, have been duly
approved by the trustees of T1000 Trust, and no other trust or corporate
proceedings on the part of T1000 Trust are necessary to consummate such
transactions. Each of the Loan Documents to which T1000 Trust is a party has
been duly executed and delivered by T1000 Trust and constitutes its legal, valid
and binding obligation, enforceable against it in accordance with its terms,
subject to bankruptcy, insolvency and other laws affecting creditors' rights
generally and general equitable principles.
(c) No Conflict. The execution, delivery and performance by T1000
Trust of the Loan Documents to which it is a party, and each of the transactions
contemplated thereby, do not and will not (i) conflict with or violate its
Declaration of Trust or by-laws, or other organizational documents, as the case
may be, or (ii) require any approval of the beneficiaries or shareholders of
T1000 Trust.
(d) Consents and Authorizations. T1000 Trust has obtained all consents
and authorizations required pursuant to its Contractual Obligations with any
other Person, the failure of which to obtain would have a Material Adverse
Effect, and has obtained all consents and authorizations of, and effected all
notices to and filings with, any Governmental Authority necessary to allow T1000
Trust to lawfully execute, deliver and perform its obligations under the Loan
Documents to which T1000 Trust is a party.
(e) Governmental Regulation. T1000 Trust is not subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, the Investment Company Act of 1940 or any other federal
or state statute or regulation such that its ability to incur indebtedness is
limited or its ability to consummate the transactions contemplated by the Loan
Documents is materially impaired.
(f) Material Adverse Agreements. T1000 Trust is not a party to or
subject to any Contractual Obligation or other restriction contained in its
charter, by-laws, or similar governing documents which has a Material Adverse
Effect.
(g) Securities Activities. T1000 Trust is not engaged principally in
the business of extending credit for the purpose of purchasing or carrying any
"margin stock" (as
42
defined in Regulation U).
(h) Disclosure. T1000 Trust has not intentionally or knowingly
withheld any material fact from Lender in regard to any matter raised in the
Loan Documents. Notwithstanding the foregoing, with respect to any projections
of T1000 Trust's future performance such representations and warranties are made
in good faith and to the best judgment of the officers of T1000 Trust at the
time such projections were made.
(i) Solvency. T1000 Trust is and will be Solvent after giving effect
to the disbursement of the Loans and the payment of all fees then payable
hereunder.
(j) Status as a REIT. T1000 Trust (i) is a real estate investment
trust as defined in Section 856 of the Internal Revenue Code (or any successor
provision thereto), (ii) has not revoked its election to be a real estate
investment trust, (iii) has not recognized any material "net income from
prohibited transactions" as defined in Section 856(b)(6)(B)(i) of the Internal
Revenue Code (or any successor provision thereto), and (iv) for its current "tax
year" (as defined in the Internal Revenue Code) is and for all prior tax years
subsequent to its election to be a real estate investment trust has been
entitled to a dividends paid deduction which meets the requirements of Section
857 of the Internal Revenue Code.
(k) [intentionally omitted]
ARTICLE VI.
REPORTING COVENANTS
Borrower, MHC Trust, the REIT and T1000 Trust covenant and agree
that, on and after the date hereof, until payment in full of all of the
Obligations and termination of this Agreement:
6.01 Financial Statements and Other Financial and Operating
Information. Borrower shall maintain or cause to be maintained a system of
accounting established and administered in accordance with sound business
practices and consistent with past practice to permit preparation of quarterly
and annual financial statements in conformity with GAAP. Borrower shall deliver
or cause to be delivered to Lender:
(a) Quarterly Financial Statements Certified by CFO. As soon as
practicable, and in any event within fifty (50) days after the end of each
Fiscal Quarter, except the last Fiscal Quarter of a Fiscal Year, consolidated
balance sheets, statements of income and expenses and statements of cash flow
(collectively, "Financial Statements") for the REIT, on a consolidated basis, in
the form provided to the Commission on the REIT's Form 10-Q and certified by the
REIT's chief financial officer.
(b) Annual Financial Statements. Within one hundred and twenty (120)
days after the close of each Fiscal Year, annual Financial Statements of the
REIT, on a consolidated basis (in the form provided to the Commission on the
REIT's Form 10-K), audited and certified without qualification by the
Accountants.
(c) Officer's Certificate of REIT. (i) Together with each delivery of
any Financial Statement pursuant to clauses (a) and (b) above, an Officer's
Certificate of the REIT,
43
stating that (A) the executive officer who is the signatory thereto, which
officer shall be the chief executive officer or the chief financial officer of
the REIT, has reviewed, or caused under his supervision to be reviewed, the
terms of this Agreement and the other Loan Documents, and has made, or caused to
be made under his supervision, a review in reasonable detail of the transactions
and condition of Borrower, the REIT, the Subsidiaries, and the Agreement
Parties, during the accounting period covered by such Financial Statements, and
that such review has not disclosed the existence during or at the end of such
accounting period, and that the signer does not have knowledge of the existence
as of the date of the Officer's Certificate, of any condition or event which
constitutes an Event of Default or Unmatured Event of Default, or, if any such
condition or event existed or exists, specifying the nature and period of
existence thereof and what action has been taken, is being taken and is proposed
to be taken with respect thereto and (B) such Financial Statements have been
prepared in accordance with the books and records of the REIT, on a consolidated
basis, and fairly present the financial condition of the REIT, on a consolidated
basis, at the date thereof (and, if applicable, subject to normal year-end
adjustments) and the results of operations and cash flows, on a consolidated
basis, for the period then ended; and (ii) together with each delivery pursuant
to clauses (a) and (b) above, a compliance certificate demonstrating, in
reasonable detail (which detail shall include actual calculations), compliance
during and at the end of such accounting periods with the financial covenants
contained in Sections 8.01(a), 8.01(d) and 8.02(a) and Article IX.
(d) Knowledge of Event of Default. Promptly upon Borrower obtaining
knowledge (i) of any condition or event which constitutes an Event of Default or
Unmatured Event of Default, or (ii) of any condition or event which has a
Material Adverse Effect, an Officer's Certificate of the REIT specifying the
nature and period of existence of any such condition or event and the nature of
such claimed Event of Default, Unmatured Event of Default, event or condition,
and what action Borrower, the REIT or the Agreement Party, as the case may be,
has taken, is taking and proposes to take with respect thereto.
(e) Litigation, Arbitration or Government Investigation. Promptly upon
Borrower obtaining knowledge of (i) the institution of, or threat of, any
material action, suit, proceeding, governmental investigation or arbitration
against or affecting Borrower, any Agreement Party, the REIT, any Subsidiary or
any of their Property not previously disclosed in writing by Borrower to Lender
pursuant to this Section 6.01(e), or (ii) any material development in any
action, suit, proceeding, governmental investigation or arbitration already
disclosed, in which, in either case, there is a reasonable possibility of an
adverse decision that could have a Material Adverse Effect, a notice thereof to
Lender and such other information as may be reasonably available to it to enable
Lender and its counsel to evaluate such matters.
(f) Failure of the REIT or MHC Trust to Qualify as Real Estate
Investment Trust. Promptly upon, and in any event within forty-eight (48) hours
after Borrower first has knowledge of (i) the REIT or MHC Trust failing to
continue to qualify as a real estate investment trust as defined in Section 856
of the Internal Revenue Code (or any successor provision thereof), (ii) any act
by the REIT or MHC Trust causing its election to be taxed as a real estate
investment trust to be terminated, (iii) any act causing the REIT or MHC Trust
to be subject to the taxes (other than a de minimus amount) imposed by Section
857(b)(6) of the Internal Revenue Code (or any successor provision thereto),
(iv) the REIT or MHC Trust failing to be entitled to a dividends paid deduction
which meets the requirements of Section 857 of the
44
Internal Revenue Code, or (v) any challenge by the IRS to the REIT's or MHC
Trust's status as a real estate investment trust, a notice of any such
occurrence or circumstance.
(g) Management Reports. Upon and after the occurrence of an Event of
Default, copies of any management reports prepared by the Accountants as soon as
available.
(h) Property Changes. Notice of any material acquisition, disposition,
merger, or purchase by the REIT, MHC Trust, Borrower, any Subsidiary or any
Agreement Party no later than ten (10) days after the consummation thereof,
specifying the nature of the transaction in reasonable detail.
(i) Other Information. Such other information, reports, contracts,
schedules, lists, documents, agreements and instruments in the possession of the
REIT, Borrower, any Subsidiary, or any Agreement Party with respect to the
business, financial condition, operations, performance, or properties of
Borrower, the REIT, any Subsidiary, or any Agreement Party, as Lender may, from
time to time, reasonably request, including without limitation, annual
information with respect to cash flow projections, budgets, operating statements
(current year and immediately preceding year), rent rolls, lease expiration
reports, leasing status reports, note payable summaries, bullet note summaries,
equity funding requirements, contingent liability summaries, line of credit
summaries, line of credit collateral summaries, wrap note or note receivable
summaries, schedules of outstanding letters of credit, summaries of cash and
Cash Equivalents, projections of management and leasing fees and overhead
budgets, each in the form customarily prepared by the REIT, MHC Trust or
Borrower. If Borrower fails to provide Lender with information requested from
Borrower within the time periods provided for herein, or if no time periods are
provided for, within ten (10) Business Days after Lender requests such
information, and provided that Lender gives Borrower reasonable prior notice and
an opportunity to participate, Borrower hereby authorizes Lender to communicate
with the Accountants and authorizes the Accountants to disclose to Lender any
and all financial statements and other information of any kind, including copies
of any management letter or the substance of any oral information, that such
Accountants may have with respect to the financial condition, operations,
properties, performance and prospects of Borrower, the REIT, any Subsidiary, or
any Agreement Party. Concurrently therewith, Lender will notify Borrower of any
such communication. At Lender's request, Borrower shall deliver a letter
addressed to the Accountants instructing them to disclose such information in
compliance with this Section 6.01(i);
provided that, to the extent that items required by this Section 6.01 are also
required to be delivered to Lender as Agent under the Syndicated Revolving
Credit Agreement, a single copy of such items delivered to Lender shall be
deemed to satisfy both the requirements hereunder and thereunder.
6.02 Press Releases; SEC Filings and Financial Statements. The REIT,
MHC Trust, T1000 Trust and Borrower will deliver to Lender as soon as
practicable after public release all press releases concerning the REIT, MHC
Trust, T1000 Trust or Borrower. The REIT, MHC Trust and Borrower will deliver to
Lender as soon as practicable after filing with the Commission, all reports and
notices, proxy statements, registration statements and prospectuses. All
materials sent or made available generally by the REIT to the holders of its
publicly-held Securities or to a trustee under any indenture or filed with the
Commission,
45
including all periodic reports required to be filed with the Commission, will be
delivered to Lender as soon as available.
6.03 Environmental Notices. Except for events or occurrences that will
not result in a Material Adverse Effect, Borrower shall notify Lender, in
writing, as soon as practicable, and in any event within ten (10) days after
Borrower's learning thereof, of any: (a) written notice or claim to the effect
that Borrower, any Agreement Party, the REIT, or any Subsidiary is or may be
liable to any Person as a result of the Release or threatened Release of any
Contaminant into the environment; (b) written notice that Borrower, any
Agreement Party, the REIT, or any Subsidiary is subject to investigation by any
Governmental Authority evaluating whether any Remedial Action is needed to
respond to the Release or threatened Release of any Contaminant into the
environment; (c) written notice that any Property of Borrower, any Agreement
Party, the REIT, or any Subsidiary is subject to an Environmental Lien; (d)
written notice of violation to Borrower, any Agreement Party, the REIT, or any
REIT Subsidiary or awareness of a condition which might reasonably result in a
notice of violation of any Environmental Laws by Borrower, the REIT, any REIT
Subsidiary or any Agreement Party; (e) commencement or written threat of any
judicial or administrative proceeding alleging a violation by Borrower, the
REIT, any Subsidiary or any Agreement Party of any Environmental Laws; or (f)
written notice received directly from a Governmental Authority of any changes to
any existing Environmental Laws.
6.04 Qualifying Unencumbered Properties. Borrower may from time to
time but no more frequently than quarterly deliver notice to Lender stating that
Borrower intends to designate a Property to become a Qualifying Unencumbered
Property. Such notice shall (i) set forth the name of such Property (or, if such
Property has no name, such notice shall otherwise identify such Property), and
(ii) be accompanied by a statement of income, certified by the chief financial
officer of the REIT, for each such Property for the then most recently completed
Fiscal Quarter (or, if such statement of income is unavailable, a pro forma
financial statement setting forth the Net Operating Income with respect to such
Property for the then current Fiscal Quarter). If any such Property meets the
requirements set forth in the definition of "Qualifying Unencumbered Properties"
and Lender fails to deliver written notice to Borrower stating that Lender has
disapproved the designation of such Property as a Qualifying Unencumbered
Property (it being understood that such notice shall provide Borrower with
information regarding why such designation was disapproved by Lender and that
Lender will not unreasonably disapprove such designation) within twenty (20)
days after receipt of such information by Lender, such Property shall become a
Qualifying Unencumbered Property.
ARTICLE VII.
AFFIRMATIVE COVENANTS
Borrower, MHC Trust, the REIT and T1000 Trust covenant and agree that,
on and after the date hereof, until payment in full of all of the Obligations
and termination of this Agreement:
7.01 With respect to Borrower:
(a) Existence. Borrower shall, and shall cause each of its
Subsidiaries to, at all times maintain its and their respective partnership,
limited liability company, trust or
46
corporate existence, as applicable, and preserve and keep in full force and
effect its and their respective rights and franchises unless the failure to
maintain such rights and franchises does not have a Material Adverse Effect.
Borrower shall maintain its status as a limited partnership.
(b) Qualification. Borrower shall, and shall cause each of its
Subsidiaries to, qualify and remain qualified to do business in each
jurisdiction in which the nature of its and their businesses require them to be
so qualified except for those jurisdictions where failure to so qualify does not
have a Material Adverse Effect.
(c) Compliance with Laws, Etc. Borrower shall, and shall cause each of
its Subsidiaries to, (i) comply with all Requirements of Law and Contractual
Obligations, and all restrictive covenants affecting Borrower and its
Subsidiaries or their respective properties, performance, assets or operations,
and (ii) obtain as needed all Permits necessary for its and their respective
operations and maintain such in good standing, except in each of the foregoing
cases where the failure to do so will not have a Material Adverse Effect or
expose Lender to any material liability therefor.
(d) Payment of Taxes and Claims. (a) Borrower shall, and shall cause
each of its Subsidiaries to, pay (i) all taxes, assessments and other
governmental charges imposed upon it or them or on any of its or their
respective properties or assets or in respect of any of its or their respective
franchises, business, income or property before any penalty or interest accrues
thereon, the failure to make payment of which in such time periods would have a
Material Adverse Effect, and (ii) all claims (including, without limitation,
claims for labor, services, materials and supplies) which have become due and
payable and which by law have or may become a Lien (other than a Permitted Lien)
upon any of its or their respective properties or assets, prior to the time when
any penalty or fine shall be incurred with respect thereto, the failure to make
payment of which would have a Material Adverse Effect; provided, however, that
no such taxes, assessments, and governmental charges referred to in clause (i)
above or claims referred to in clause (ii) above need be paid if being contested
in good faith by appropriate proceedings promptly instituted and diligently
conducted and if adequate reserves shall have been set aside therefor in
accordance with GAAP.
(e) Maintenance of Properties; Insurance. Borrower shall, and shall
cause each of its Subsidiaries to, maintain in good repair, working order and
condition, excepting ordinary wear and tear, all of its and their respective
Property (personal and real) and will make or cause to be made all appropriate
repairs, renewals and replacements thereof, in each case where the failure to so
maintain, repair, renew or replace would have a Material Adverse Effect.
Borrower shall, and shall cause each of its Subsidiaries to, maintain with
insurance companies that have a Best Rating of "A- VII" or higher or other
insurance companies reasonably acceptable to Lender that have similar financial
resources and stability, which companies shall be qualified to do business in
the states where such Property is located, the insurance policies and programs
reasonably acceptable to Lender insuring all property and assets material to the
operations of Borrower and each of its Subsidiaries against loss or damage by
fire, theft, burglary, pilferage and loss in transit and business interruption,
together with such other hazards as is reasonably consistent with prudent
industry practice, and maintain liability insurance consistent with prudent
industry practice with financially sound insurance companies qualified to do
business in the states where such Property is located. The insurance policies
shall provide that they cannot be terminated or materially modified unless
Lender receives thirty (30) days
47
prior written notice of said termination or modification. At Lender's reasonable
request, Borrower shall furnish evidence of replacement costs, without cost to
Lender, such as are regularly and ordinarily made by insurance companies to
determine the then replacement cost of the improvements on any Property of
Borrower or any of its Subsidiaries. In the event Borrower fails to cause
insurance to be carried as aforesaid, Lender shall have the right (but not the
obligation) to place and maintain insurance required to be maintained hereunder
and treat the amounts expended therefor as additional Obligations, payable on
demand; provided however, that Lender shall give Borrower five (5) days' prior
notice of Lender's intent to place or maintain such insurance during which time
Borrower shall have the opportunity to obtain such insurance. All of the
insurance policies required hereunder shall be in form and substance reasonably
satisfactory to Lender. Lender hereby agrees that Borrower may use blanket
policies to satisfy the requirements of this Section 7.01(e), approves the
issuer, form and content of all insurance policies currently carried by Borrower
and agrees that such insurance satisfies the requirements of this Section
7.01(e). Furthermore, Lender agrees that it will not be unreasonable in
exercising any right hereunder to require Borrower to modify, alter or
supplement its insurance policies or coverage or in exercising any right it may
have hereunder to approve any changes Borrower may hereafter make with respect
to its insurance.
(f) Inspection of Property; Books and Records. Borrower shall permit
and shall cause each of the REIT, each Subsidiary, and each Agreement Party to,
upon reasonable prior notice by Lender to Borrower, permit any authorized
representative(s) designated by Lender to visit and inspect any of its
properties including inspection of financial and accounting records and leases,
and to make copies and take extracts therefrom, all at such times during normal
business hours and as often as Lender may reasonably request. In connection
therewith, Borrower shall pay all reasonable expenses of the types described in
Section 12.01. Borrower shall keep, and shall cause each of, the REIT, each
Subsidiary and each Agreement Party to keep proper books of record and account
in conformity with GAAP, as modified and as otherwise required by this Agreement
and applicable Requirements of Law.
(g) Maintenance of Licenses, Permits, Etc. Borrower shall, and shall
cause each of its Subsidiaries to, maintain in full force and effect all
licenses, permits, governmental approvals, franchises, patents, trademarks,
trade names, copyrights, authorizations or other rights necessary for the
operation of their respective businesses, except where the failure to obtain any
of the foregoing would not have a Material Adverse Effect; and notify Lender in
writing, promptly after learning thereof, of the suspension, cancellation,
revocation or discontinuance of or of any pending or threatened action or
proceeding seeking to suspend, cancel, revoke or discontinue any such material
license, permit, patent, trademark, trade name, copyright, governmental
approval, franchise authorization or right, except where the suspension,
cancellation, revocation or discontinuance would not have a Material Adverse
Effect.
(h) Conduct of Business. Except for Permitted Holdings and other
investments permitted under Section 8.01(c), Borrower shall engage only in the
business of owning, operating, managing and developing Designated Use Properties
and other business activities incidental thereto, whether directly or through
its Subsidiaries.
(i) Use of Proceeds. Borrower shall use the proceeds of the Loans only
for predevelopment costs, development costs, acquisitions, working capital,
equity investments,
48
capital expenditures, repayment of Indebtedness, scheduled amortization payments
on debt and general partnership and other purposes.
(j) Further Assurance. Borrower shall take and shall cause its
Subsidiaries and each Agreement Party to take all such further actions and
execute all such further documents and instruments as Lender may at any time
reasonably determine to be necessary or advisable to (i) correct any technical
defect or technical error that may be discovered in any Loan Document or in the
execution, acknowledgment or recordation thereof, and (ii) cause the execution,
delivery and performance of the Loan Documents to be duly authorized.
7.02 With respect to the REIT:
(a) Existence. The REIT shall, and shall cause each of its
Subsidiaries to, at all times maintain its and their respective partnership,
trust or corporate existence, as applicable, and preserve and keep in full force
and effect its and their respective rights and franchises unless the failure to
maintain such rights and franchises will not have a Material Adverse Effect.
(b) Qualification, Name. The REIT shall, and shall cause each of its
Subsidiaries to, qualify and remain qualified to do business in each
jurisdiction in which the nature of its and their businesses requires them to be
so qualified except for those jurisdictions where failure to so qualify does not
have a Material Adverse Effect. The REIT will transact business solely in its or
its Subsidiaries' own name.
(c) Securities Law Compliance. The REIT shall comply in all material
respects with all rules and regulations of the Commission and file all reports
required by the Commission relating to the REIT's publicly-held Securities.
(d) Continued Status as a REIT; Prohibited Transactions. The REIT (i)
will continue to be a real estate investment trust as defined in Section 856 of
the Internal Revenue Code (or any successor provision thereto), (ii) will not
revoke its election to be a real estate investment trust, (iii) will not
recognize any material "net income from prohibited transactions" as defined in
Section 857(b)(6)(B)(i) of the Internal Revenue Code (or any successor provision
thereto), and (iv) will do all acts necessary to continue to be entitled to a
dividend paid deduction meeting the requirements of Section 857 of the Internal
Revenue Code.
(e) NYSE or ASE Listed Company. The REIT shall cause its common stock
at all times to be listed for trading and be traded on the New York Stock
Exchange or American Stock Exchange.
(f) Compliance with Laws, Etc. The REIT shall, and shall cause each of
its Subsidiaries to, (i) comply with all Requirements of Law and Contractual
Obligations, and all restrictive covenants affecting the REIT and its
Subsidiaries or their respective properties, performance, prospects, assets or
operations, and (ii) obtain as needed all Permits necessary for its and their
respective operations and maintain such in good standing, except in each of the
foregoing cases where the failure to do so will not have a Material Adverse
Effect.
(g) Payment of Taxes and Claims. Subject to Section 7.02(d), the REIT
shall, and shall cause each of its Subsidiaries to, pay (i) all taxes,
assessments and other governmental charges imposed upon it or them or on any of
its or their respective properties or assets or in
49
respect of any of its or their respective franchises, business, income or
property before any penalty or interest accrues thereon, the failure to make
payment of which would have a Material Adverse Effect, and (ii) all claims
(including, without limitation, claims for labor, services, materials and
supplies) which have become due and payable and which by law have or may become
a Lien (other than a Permitted Lien) upon any of its or their respective
properties or assets, prior to the time when any penalty or fine shall be
incurred with respect thereto, the failure to make payment of which would have a
Material Adverse Effect; provided, however, that no such taxes, assessments, and
governmental charges referred to in clause (i) above or claims referred to in
clause (ii) above need be paid if being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted and if adequate
reserves shall have been set aside therefor in accordance with GAAP.
(h) MHC Trust. The REIT shall cause MHC Trust to at all times (i)
remain a Subsidiary of the REIT, (ii) remain controlled by the REIT and (iii) be
the sole general partner of Borrower.
7.03 With respect to MHC Trust:
(a) Continued Status as a Real Estate Investment Trust; Prohibited
Transactions. MHC Trust (i) will continue to be a real estate investment trust
as defined in Section 856 of the Internal Revenue Code (or any successor
provision thereto), (ii) will not revoke its election to be a real estate
investment trust, (iii) will not recognize any material "net income from
prohibited transactions" as defined in Section 857(b)(6)(B)(i) of the Internal
Revenue Code (or any successor provision thereto), and (iv) will do all acts
necessary to continue to be entitled to a dividends paid deduction meeting the
requirements of Section 857 of the Internal Revenue Code.
ARTICLE VIII.
NEGATIVE COVENANTS
Borrower, MHC Trust, T1000 Trust and the REIT covenant and agree that,
on and after the date hereof, until payment in full of all of the Obligations
and termination of this Agreement:
8.01 With respect to Borrower:
(a) Indebtedness. Borrower shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly create, incur, assume or otherwise
become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(i) the Obligations; and the "Obligations" under the Syndicated
Revolving Credit Agreement;
(ii) guaranties of the obligations described in Section 8.01(a)(i);
(iii) trade debt incurred in the normal course of business;
(iv) intercompany Indebtedness (including, without limitation, amounts
owing under intercompany leases) owing between Subsidiaries; and
50
(v) Indebtedness which, after giving effect thereto, may be incurred
or may remain outstanding without giving rise to an Event of Default or
Unmatured Event of Default under any provision of Articles VIII or IX;
provided, however, that (A) the Borrower shall not, and shall not permit
any of its Subsidiaries to, guarantee or otherwise become or remain
directly or indirectly liable with respect to the Indebtedness of any
Investment Affiliate, and (B) Borrower shall not permit any Subsidiary to
create, incur, assume or otherwise become or remain directly or indirectly
liable with respect to, any Recourse Indebtedness in excess of Ten Million
Dollars ($10,000,000) per Subsidiary at any time or Thirty Million Dollars
($30,000,000) in the aggregate for all Subsidiaries at any time.
(b) Liens. Borrower shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly create, incur, assume or permit to exist
any Lien on or with respect to any of its Property, except:
(i) Permitted Liens; and
(ii) Liens securing Indebtedness permitted to be incurred and remain
outstanding pursuant to Section 8.01(a)(iv) and (v).
(c) Investments. Borrower shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly make or own any Investment except:
(i) Investments in cash and Cash Equivalents;
(ii) Permitted Holdings;
(iii) Investments in Subsidiaries and Investment Affiliates owned as
of the Closing Date;
(iv) Investments permitted pursuant to Section 8.01(e)(v).
(v) Controlled Ownership Interests which do not constitute
Non-Designated Use Property; and
(vi) mortgage loans which do not constitute Non-Designated Use
Property and which are either eliminated in the consolidation of the REIT,
Borrower and the Subsidiaries or are accounted for as investments in real
estate under GAAP.
(d) Distributions and Dividends. None of Borrower, the REIT nor MHC
Trust shall declare or make any dividend or other distribution on account of
partnership interests in excess of ninety-five percent (95%) of Funds From
Operations in any Fiscal Year; provided, however, that if an Event of Default
under Section 10.01(a) shall have occurred, none of Borrower, the REIT nor MHC
Trust shall declare or make any dividend or other distribution on account of
partnership interests in excess of what is required for the REIT to maintain its
status as a real estate investment trust as defined in Section 856 of the
Internal Revenue Code.
(e) Restrictions on Fundamental Changes. Except as provided in Section
8.01(e)(vi) below:
51
(i) Borrower shall not, and shall not permit any of its Subsidiaries
to, enter into any merger, consolidation, reorganization or
recapitalization or liquidate, wind-up or dissolve (or suffer any
liquidation or dissolution), or discontinue its business.
(ii) Borrower shall remain a limited partnership with MHC Trust as its
sole general partner.
(iii) Borrower shall not change its Fiscal Year.
(iv) Except for Permitted Holdings and other Investments permitted
under Section 8.01(c), Borrower shall not engage in any line of business
other than ownership, operation, management and development of Designated
Use Properties and the provision of services incidental thereto and the
brokerage, purchase, and sale of manufactured home units, whether directly
or through its Subsidiaries and Investment Affiliates.
(v) Borrower shall not acquire by purchase or otherwise all or
substantially all of the business, property or assets of, or stock or other
evidence of beneficial ownership of, any Person, unless after giving effect
thereto, Borrower is in pro forma compliance with this Agreement.
(vi) Notwithstanding the foregoing, or anything to the contrary set
forth herein, so long as Borrower, MHC Trust, T1000 Trust and the REIT at
all times remain in compliance with all of the terms and conditions of this
Agreement, including, without limitation, those contained in Articles VI,
VII, VIII and IX, and no Event of Default or Unmatured Event of Default
exists at the time of or would arise as a result thereof, the following
transfers are permitted: (1) transfers of securities issued by the REIT
that are effected on the New York Stock Exchange or American Stock
Exchange, (2) direct or indirect transfers of interests in any Subsidiary
(the "Transferred Subsidiary") among Borrower, the REIT or any other
Subsidiary, so long as the Transferred Subsidiary remains a Subsidiary
after such transfer or transfers, (3) transfers or issuance of limited
partnership interests in Borrower, provided that MHC Trust remains the sole
general partner of Borrower, (4) the sale of less than $500,000 of
preferred interests in MHC Trust and/or T1000 Trust to unrelated
individuals to allow each of MHC Trust and T1000 Trust to have at least 100
shareholders and qualify as a real estate investment trust under the
Internal Revenue Code, (5) the merger (or similar transaction) of the REIT,
MHC Trust, T1000 Trust or Borrower, so long as the REIT, MHC Trust, T1000
Trust or Borrower, as applicable, is the surviving entity and (6) the
dissolution of Subsidiaries in the ordinary course of business. At least
fifteen (15) days prior to any transaction permitted under clause (5)
above, Borrower shall provide Lender with written notice of such merger (or
similar transaction) accompanied by a compliance certificate demonstrating
in reasonable detail (which detail shall include actual calculations)
compliance with the financial covenants contained in Sections 8.01(a),
8.01(d) and 8.02(a) and Article IX both before and, on a pro forma basis,
after giving effect to such merger (or similar transaction).
(f) ERISA. Neither Borrower nor the REIT shall, and neither shall
permit any Subsidiary or any of their ERISA Affiliates to, do any of the
following to the extent that
52
such act or failure to act would result in the aggregate, after taking into
account any other such acts or failure to act, in a Material Adverse Effect:
(i) Engage, or knowingly permit a Subsidiary or an ERISA Affiliate to
engage, in any prohibited transaction described in Section 406 of ERISA or
Section 4975 of the Internal Revenue Code which is not exempt under Section
407 or 408 of ERISA or Section 4975(d) of the Internal Revenue Code for
which a class exemption is not available or a private exemption has not
been previously obtained from the DOL;
(ii) Permit to exist any accumulated funding deficiency (as defined in
Section 302 of ERISA and Section 412 of the Internal Revenue Code), whether
or not waived;
(iii) Fail, or permit a Subsidiary or an ERISA Affiliate of the REIT,
Borrower or any Subsidiary to fail, to pay timely required contributions or
annual installments due with respect to any waived funding deficiency to
any Plan if such failure could result in the imposition of a Lien or
otherwise would have a Material Adverse Effect;
(iv) Terminate, or permit an ERISA Affiliate of the REIT, Borrower or
any Subsidiary to terminate, any Benefit Plan which would result in any
liability of Borrower or a Subsidiary or an ERISA Affiliate of the REIT,
Borrower or any Subsidiary under Title IV of ERISA;
(v) Fail, or permit any Subsidiary or ERISA Affiliate to fail to pay
any required installment under section (m) of Section 412 of the Internal
Revenue Code or any other payment required under Section 412 of the
Internal Revenue Code on or before the due date for such installment or
other payment, if such failure could result in the imposition of a Lien or
otherwise would have a Material Adverse Effect;
(vi) Permit to exist any Termination Event;
(vii) Make, or permit a Subsidiary or an ERISA Affiliate of the REIT,
Borrower or any Subsidiary to make, a complete or partial withdrawal
(within the meaning of ERISA Section 4201) from any Multiemployer Plan so
as to result in liability to Borrower, a Subsidiary or any ERISA Affiliate
of the REIT, Borrower or any Subsidiary which would have a Material Adverse
Effect; or
(viii) Permit the total Unfunded Pension Liabilities (using the
actuarial assumptions utilized by the PBGC) for all Benefit Plans (other
than Benefit Plans which have no Unfunded Pension Liabilities) to have a
Material Adverse Effect.
None of the REIT, Borrower nor any Agreement Party shall use any "assets"
(within the meaning of ERISA or Section 4975 of the Internal Revenue Code,
including but not limited to 29 C.F.R. Section 2510.3-101 or any successor
regulation thereto) of an "employee benefit plan" within the meaning of Section
3(3) of ERISA or a "plan" within the meaning of Section 4975(e)(1) of the
Internal Revenue Code to repay or secure the Obligations if the use of such
assets may result in a prohibited transaction under ERISA or the Internal
Revenue Code (which is not exempt from the restrictions of Section 406 of ERISA
and Section 4975 of the Internal Revenue Code and the taxes and penalties
imposed by Section 4975 of the Internal Revenue Code and Section 502(i) of
ERISA) or in Lender being deemed in violation of Section 404 or 406 of ERISA or
53
Section 4975 of the Internal Revenue Code or otherwise by itself results in or
will result in Lender being a fiduciary or party in interest under ERISA or a
"disqualified person" as defined in Section 4975 (e) (2) of the Internal Revenue
Code with respect to an "employee benefit plan" within the meaning of Section
3(3) of ERISA or a "plan" within the meaning of Section 4975(e)(1) of the
Internal Revenue Code. Without limitation of any other provision of this
Agreement, none of the REIT, Borrower or any Agreement Party shall assign, sell,
pledge, encumber, transfer, hypothecate or otherwise dispose of their respective
interests or rights (direct or indirect) in any Loan Document, or attempt to do
any of the foregoing or suffer any of the foregoing, or permit any party with a
direct or indirect interest or right in any Loan Document to do any of the
foregoing, nor shall the REIT, MHC Trust or Borrower assign, sell, pledge,
encumber, transfer, hypothecate or otherwise dispose of any of their respective
rights or interests (direct or indirect) in any Agreement Party, Borrower or the
REIT, as applicable, or attempt to do any of the foregoing or suffer any of the
foregoing, if such action would cause the Obligations, or the exercise of any of
the Lender's rights in connection therewith, to constitute a prohibited
transaction under ERISA or the Internal Revenue Code (unless Borrower furnishes
to Lender a legal opinion reasonably satisfactory to Lender that the transaction
is exempt from the prohibited transaction provisions of ERISA and the Internal
Revenue Code (for this purpose, Lender agrees to supply Borrower all relevant
non-confidential factual information reasonably necessary to such legal opinion
and reasonably requested by Borrower)) or otherwise results in Lender being
deemed in violation of Sections 404 or 406 of ERISA or Section 4975 of the
Internal Revenue Code or otherwise by itself would result in Lender being a
fiduciary or party in interest under ERISA or a "disqualified person" as defined
in Section 4975(e)(2) of the Internal Revenue Code with respect to an "employee
benefit plan" within the meaning of Section 3(3) of ERISA or a "plan" within the
meaning of Section 4975(e)(1) of the Internal Revenue Code.
(g) Environmental Liabilities. Borrower shall not, and shall not
permit any of its Subsidiaries to, become subject to any Liabilities and Costs
which would have a Material Adverse Effect arising out of or related to (i) the
Release or threatened Release of any Contaminant into the environment, or any
Remedial Action in response thereto, or (ii) any violation of any Environmental
Laws. Notwithstanding the foregoing provision, Borrower and its Subsidiaries
shall have the right to contest in good faith any claim of violation of an
Environmental Law by appropriate legal proceedings and shall be entitled to
postpone compliance with the obligation being contested as long as (i) no Event
of Default shall have occurred and be continuing, (ii) Borrower shall have given
Lender prior written notice of the commencement of such contest, (iii)
noncompliance with such Environmental Law shall not subject Borrower or such
Subsidiary to any criminal penalty or subject Lender to pay any civil penalty or
to prosecution for a crime, and (iv) no portion of any Property material to
Borrower or its condition or prospects shall be in imminent danger of being
sold, forfeited or lost, by reason of such contest or the continued existence of
the matter being contested.
(h) Amendment of Constituent Documents. Borrower shall not permit any
amendment of its limited partnership agreement, certificate of limited
partnership or by-laws, if any, which would materially and adversely affect
Lender or its rights and remedies under the Loan Documents.
(i) Disposal of Interests. Except as permitted under Section
8.01(e)(vi)(4), Borrower will not directly or indirectly convey, sell, transfer,
assign, pledge or otherwise encumber or dispose of any material portion of its
partnership interests, stock or other ownership
54
interests in any Subsidiary or other Person in which it has an interest unless
Borrower has delivered to Lender a Compliance Certificate showing on a pro forma
basis (calculated in a manner reasonably acceptable to Lender) that there would
be no breach of any of the financial covenants contained in Articles VIII and XI
after giving effect to such conveyance, sale, transfer, assignment, pledge, or
other encumbrance or disposition.
(j) Margin Regulations. No portion of the proceeds of any credit
extended under this Agreement shall be used in any manner which might cause the
extension of credit or the application of such proceeds to violate Regulation U
or Regulation X or any other regulation of the Federal Reserve Board or to
violate the Securities Exchange Act or the Securities Act, in each case as in
effect on the date or dates of Borrowings and such use of proceeds.
(k) Transactions with Affiliates. Borrower shall not and shall not
permit any of its Subsidiaries to enter into, any transaction or series of
related transactions with any Affiliate of Borrower, other than transactions in
the ordinary course of business which are on terms and conditions substantially
as favorable to Borrower or such Subsidiary as would be obtainable by Borrower
or such Subsidiary in an arms-length transaction with a Person other than an
Affiliate.
8.02 With respect to the REIT:
(a) Indebtedness. The REIT shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or otherwise
become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(i) the Obligations; and the "Obligations" under the Syndicated
Revolving Credit Agreement;
(ii) guaranties of the obligations described in Section 8.02(a)(i);
and
(iii) Indebtedness which, after giving effect thereto, may be incurred
or may remain outstanding without giving rise to an Event of Default or
Unmatured Event of Default under any provision of Articles VIII or IX;
provided, however, that (A) the REIT shall not, and shall not permit any of
its Subsidiaries to, guarantee or otherwise become or remain directly or
indirectly liable with respect to the Indebtedness of any Investment
Affiliate, and (B) the REIT shall not permit any Subsidiary to create,
incur, assume or otherwise become or remain directly or indirectly liable
with respect to, any Recourse Indebtedness in excess of Ten Million Dollars
($10,000,000) per Subsidiary at any time or Thirty Million Dollars
($30,000,000) in the aggregate for all Subsidiaries at any time.
(b) Liens. The REIT shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly create, incur, assume or permit to exist
any Lien on or with respect to any of its Property, except:
(i) Permitted Liens; and
(ii) Liens securing Indebtedness permitted to be incurred and remain
outstanding pursuant to Section 8.02(a)(ii) and (iii).
55
(c) Restriction on Fundamental Changes. Except as provided in Section
8.02(c)(vi) below:
(i) The REIT shall not enter into any merger, consolidation,
reorganization or recapitalization or liquidate, wind-up or dissolve (or
suffer any liquidation or dissolution) or discontinue its business.
(ii) The REIT shall not change its Fiscal Year.
(iii) The REIT shall not engage in any line of business other than
owning interests in MHC Trust and any ownership interests in Subsidiaries
and Investment Affiliates which are permitted under the terms of Borrower's
partnership agreement.
(iv) The REIT shall not have an Investment in any Person other than
MHC Trust and any ownership interests in Subsidiaries and Investment
Affiliates which are permitted under the terms of Borrower's partnership
agreement.
(v) The REIT shall not acquire an interest in any Property other than
Securities issued by MHC Trust or Borrower and any ownership interests in
Subsidiaries and Investment Affiliates which are permitted under the terms
of Borrower's partnership agreement.
(vi) Notwithstanding the foregoing or anything to the contrary set
forth herein, so long as Borrower, MHC Trust, T1000 Trust and the REIT at
all times remain in compliance with all of the terms and conditions of this
Agreement, including, without limitation, those contained in Articles VI,
VII, VIII and IX, and no Event of Default or Unmatured Event of Default
exists at the time of or would arise as a result thereof, the following
transfers are permitted: (1) transfers of securities issued by the REIT
that are effected on the New York Stock Exchange or American Stock
Exchange, (2) direct or indirect transfers of interests in any Subsidiary
(the "Transferred Subsidiary") among Borrower, the REIT or any other
Subsidiary, so long as the Transferred Subsidiary remains a Subsidiary
after such transfer or transfers, (3) transfers or issuance of limited
partnership interests in Borrower, provided that MHC Trust remains the sole
general partner of Borrower, (4) the sale of less than $500,000 of
preferred interests in MHC Trust and/or T1000 Trust to unrelated
individuals to allow each of MHC Trust and T1000 Trust to have at least 100
shareholders and qualify as a real estate investment trust under the
Internal Revenue Code, (5) the merger (or similar transaction) of the REIT,
MHC Trust, T1000 Trust or Borrower, so long as the REIT, MHC Trust, T1000
Trust or Borrower, as applicable, is the surviving entity and (6) the
dissolution of Subsidiaries in the ordinary course of business. At least
fifteen (15) days prior to any transaction permitted under clause (5)
above, the REIT shall provide Lender with written notice of such merger (or
similar transaction) accompanied by a compliance certificate demonstrating
in reasonable detail (which detail shall include actual calculations)
compliance with the financial covenants contained in Sections 8.01(a),
8.01(d) and 8.02(a) and Article IX both before and, on a pro forma basis,
after giving effect to such merger (or similar transaction).
56
(d) Environmental Liabilities. The REIT shall not, and shall not
permit any of its Subsidiaries to become subject to any Liabilities and Costs
which would have a Material Adverse Effect arising out of or related to (i) the
Release or threatened Release of any Contaminant into the environment, or any
Remedial Action in response thereto, or (ii) any violation of any Environmental
Laws. Notwithstanding the foregoing provision, the REIT and its Subsidiaries
shall have the right to contest in good faith any claim of violation of an
Environmental Law by appropriate legal proceedings and shall be entitled to
postpone compliance with the obligation being contested as long as (i) no Event
of Default shall have occurred and be continuing, (ii) the REIT shall have given
Lender prior written notice of the commencement of such contest, (iii)
noncompliance with such Environmental Law shall not subject the REIT or such
Subsidiary to any criminal penalty or subject Lender to pay any civil penalty or
to prosecution for a crime, and (iv) no portion of any Property material to
Borrower or its condition or prospects shall be in imminent danger of being
sold, forfeited or lost, by reason of such contest or the continued existence of
the matter being contested.
(e) Amendment of Charter or By-Laws. The REIT shall not permit any
amendment of its charter documents or by-laws, which would materially and
adversely affect Lender or its rights and remedies under the Loan Documents.
(f) Disposal of Partnership Interests. Except as permitted under
Section 8.02(c)(vi)(4) or as contemplated by Section 3.8 of Borrower's
partnership agreement, the REIT will not directly or indirectly convey, sell,
transfer, assign, pledge or otherwise encumber or dispose of any of its
interests in MHC Trust or Borrower.
(g) Maximum Ownership Interests. No Person or group of Persons (within
the meaning of Section 13 or 14 of the Securities Exchange Act) (other than
Xxxxxx Xxxx) shall beneficially acquire ownership (within the meaning of Rule
13d-3 promulgated by the Commission under such Act), directly or indirectly, of
more than fifteen percent (15%) of the Securities which have the right to elect
the board of directors of the REIT under ordinary circumstances on a combined
basis, after giving effect to the conversion of any Convertible Securities in
the REIT, MHC Trust and Borrower.
8.03 With respect to MHC Trust:
(a) Restriction on Fundamental Changes. Except as provided in Section
8.03(a)(vi) below:
(i) MHC Trust shall not enter into any merger, consolidation,
reorganization or recapitalization or liquidate, wind-up or dissolve (or
suffer any liquidation or dissolution) or discontinue its business.
(ii) MHC Trust shall not change its Fiscal Year.
(iii) MHC Trust shall not engage in any line of business other than
owning partnership interests in Borrower and any ownership interests in
Subsidiaries and Investment Affiliates which are permitted under the terms
of Borrower's partnership agreement.
57
(iv) MHC Trust shall not have an Investment in any Person other than
Borrower and any ownership interests in Subsidiaries and Investment
Affiliates which are permitted under the terms of Borrower's partnership
agreement.
(v) MHC Trust shall not acquire an interest in any Property other than
Securities issued by Borrower and any ownership interests in Subsidiaries
and Investment Affiliates which are permitted under the terms of Borrower's
partnership agreement.
(vi) Notwithstanding the foregoing or anything to the contrary set
forth herein, so long as Borrower, MHC Trust, T1000 Trust and the REIT at
all times remain in compliance with all of the terms and conditions of this
Agreement, including, without limitation, those contained in Articles VI,
VII, VIII and IX, and no Event of Default or Unmatured Event of Default
exists at the time of or would arise as a result thereof, the following
transfers are permitted: (1) transfers of securities issued by the REIT
that are effected on the New York Stock Exchange or American Stock
Exchange, (2) direct or indirect transfers of interests in any Subsidiary
(the "Transferred Subsidiary") among Borrower, the REIT or any other
Subsidiary, so long as the Transferred Subsidiary remains a Subsidiary
after such transfer or transfers, (3) transfers or issuance of limited
partnership interests in Borrower, provided that MHC Trust remains the sole
general partner of Borrower, (4) the sale of less than $500,000 of
preferred interests in MHC Trust and/or T1000 Trust to unrelated
individuals to allow each of MHC Trust and T1000 Trust to have at least 100
shareholders and qualify as a real estate investment trust under the
Internal Revenue Code, (5) the merger (or similar transaction) of the REIT,
MHC Trust, T1000 Trust or Borrower, so long as the REIT, MHC Trust, T1000
Trust or Borrower, as applicable, is the surviving entity and (6) the
dissolution of Subsidiaries in the ordinary course of business. At least
fifteen (15) days prior to any transaction permitted under clause (5)
above, MHC Trust shall provide Lender with written notice of such merger
(or similar transaction) accompanied by a compliance certificate
demonstrating in reasonable detail (which detail shall include actual
calculations) compliance with the financial covenants contained in Sections
8.01(a), 8.01(d) and 8.02(a) and Article IX both before and, on a pro forma
basis, after giving effect to such merger (or similar transaction).
(b) Amendment of Charter or By-Laws. MHC Trust shall not permit any
amendment of its charter documents or by-laws, which would materially and
adversely affect Lender or its rights and remedies under the Loan Documents.
(c) Disposal of Partnership Interests. Except as permitted under
Section 8.03(a)(vi)(4) of this Agreement or as contemplated by Section 3.8 of
Borrower's partnership agreement, MHC Trust will not directly or indirectly
convey, sell, transfer, assign, pledge or otherwise encumber or dispose of any
of its partnership interests in Borrower.
8.04 With respect to T1000 Trust. T1000 Trust shall not enter into any
merger, consolidation, reorganization or recapitalization or liquidate, wind-up
or dissolve (or suffer any liquidation or dissolution) or discontinue its
business. Notwithstanding the foregoing or anything to the contrary set forth
herein, so long as Borrower, MHC Trust, T1000 Trust and the REIT at all times
remain in compliance with all of the terms and conditions of this Agreement,
including, without limitation, those contained in Articles VI, VII, VIII and IX,
and no Event of
58
Default or Unmatured Event of Default exists at the time of or would arise as a
result thereof, the following transfers are permitted: the merger (or similar
transaction) of the REIT, MHC Trust, T1000 Trust or Borrower, so long as the
REIT, MHC Trust, T1000 Trust or Borrower, as applicable, is the surviving
entity. At least fifteen (15) days prior to any transaction permitted under the
immediately preceding sentence, T1000 Trust shall provide Lender with written
notice of such merger (or similar transaction) accompanied by a compliance
certificate demonstrating in reasonable detail (which detail shall include
actual calculations) compliance with the financial covenants contained in
Sections 8.01(a), 8.01(d) and 8.02(a) and Article IX both before and, on a pro
forma basis, after giving effect to such merger (or similar transaction).
ARTICLE IX.
FINANCIAL COVENANTS
Borrower covenants and agrees that, on and after the date of this
Agreement and until payment in full of all the Obligations and the termination
of this Agreement:
9.01 Total Liabilities to Gross Asset Value. Borrower shall not permit
the ratio of Total Liabilities to the sum of Gross Asset Values for Borrower and
each of its Subsidiaries to exceed 0.675:1.
9.02 EBITDA to Fixed Charges Ratio. Borrower shall not permit the
ratio of EBITDA for any twelve (12) calendar month period to Fixed Charges for
such twelve (12) calendar month period to be less than 1.40:1.
9.03 Unencumbered Net Operating Income to Unsecured Interest Expense.
Borrower shall not permit the ratio of Unencumbered Net Operating Income for any
Fiscal Quarter to Unsecured Interest Expense for such Fiscal Quarter to be less
than 1.80:1.
9.04 Unencumbered Pool. Borrower shall not permit the ratio of the
Unencumbered Asset Value to outstanding Unsecured Debt to be less than 1.35:1.
9.05 Minimum Net Worth. Borrower will maintain a Net Worth of not less
than the Minimum Net Worth.
9.06 Permitted Holdings. Borrower's primary business will be the
ownership, operation, management and development of Designated Use Properties
and any other business activities of Borrower and its Subsidiaries will remain
incidental thereto. Notwithstanding the foregoing, Borrower and its Subsidiaries
may acquire, or maintain or engage in the Permitted Holdings if and so long as
the aggregate value of such Permitted Holdings, whether held directly or
indirectly by Borrower and its Subsidiaries, does not exceed, at any time,
twenty percent (20%) of Gross Asset Value for Borrower as a whole. The value of
the Permitted Holdings shall be calculated as follows: (i) the value of any
Non-Designated Use Property (other than cash or Cash Equivalents) or any
Designated Use Property Ownership Interest (other than a Controlled Ownership
Interest) shall be calculated based upon its Adjusted Asset Value; (ii) the
value of any Security issued by a real estate investment trust primarily engaged
in the development, ownership, operation and management of Designated Use
Properties shall be equal to the lesser of (A) the acquisition cost thereof or
(B) the current market value thereof (such market value to be determined in a
manner reasonably acceptable to Lender); (iii) [intentionally deleted]; (iv) the
value of any Designated Use Property Mortgage (other than mortgage indebtedness
which is
59
either eliminated in the consolidation of the REIT, Borrower and the
Subsidiaries or accounted for as an investment in real estate under GAAP) shall
be equal to the book value thereof; (v) the value of Development Activity by
Borrower or any Subsidiary shall be equal to the full budgeted cost thereof; and
(vi) the value of any Development Activity by an Investment Affiliate shall be
equal to the greater of (A) Borrower's pro rata share of the full budgeted cost
thereof based upon its percentage of equity ownership, or (B) Borrower's pro
rata share of the full budgeted cost thereof based upon Borrower's economic
interest in the project (as determined by Borrower in a manner reasonably
satisfactory to Lender).
9.07 Calculation. Each of the foregoing ratios and financial
requirements shall be calculated as of the last day of each Fiscal Quarter, but
shall be satisfied at all times. Calculations of such ratios for a "twelve (12)
calendar month period" shall be made for the twelve (12) calendar month period
ending on the last day of the applicable Fiscal Quarter.
ARTICLE X.
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
10.01 Events of Default. Each of the following occurrences shall
constitute an Event of Default under this Agreement:
(a) Failure to Make Payments When Due. (i) The failure to pay in full
any amount due on the Termination Date; (ii) the failure to pay in full any
principal when due; (iii) the failure to pay in full any interest owing
hereunder or under any of the other Loan Documents within ten (10) days after
the due date thereof and, unless Lender has previously delivered two (2) or more
notices of payment default to Borrower during the term of this Agreement (in
which event the following notice shall not be required), Lender shall have given
Borrower written notice that Lender has not received such payment on or before
the date such payment was required to be made and Borrower shall have failed to
make such payment within five (5) days after receipt of such notice; or (iv) the
failure to pay in full any other payment required hereunder or under any of the
other Loan Documents, whether such payment is required to be made to Lender or
to some other Person, within ten (10) days after Lender gives Borrower written
notice that such payment is due and unpaid.
(b) Dividends. Borrower, MHC Trust or the REIT shall breach the
covenant set forth in Section 8.01(d).
(c) Breach of Financial Covenants. Borrower shall fail to satisfy any
covenant set forth in Article IX and such failure shall continue for forty (40)
days after Borrower's knowledge thereof.
(d) Other Defaults. Borrower, the REIT or any Agreement Party shall
fail duly and punctually to perform or observe any agreement, covenant or
obligation binding on Borrower, the REIT or any Agreement Party under this
Agreement or under any of the other Loan Documents (other than as described in
Section 7.01(e) or Sections 10.01(a), (b), (c), (e), (g) or (p)), and such
failure shall continue for thirty (30) days after written notice from Lender to
Borrower, the REIT or any Agreement Party (or (i) such lesser period of time as
is mandated by applicable Requirements of Law or (ii) such longer period of time
(but in no case more than ninety (90) days) as is reasonably required to cure
such failure if Borrower, the REIT, or such
60
Agreement Party commences such cure within such ninety (90) days and diligently
pursues the completion thereof).
(e) Breach of Representation or Warranty. Any representation or
warranty made or deemed made by Borrower, the REIT or any Agreement Party to
Lender herein or in any of the other Loan Documents or in any statement,
certificate or financial statements at any time given by Borrower pursuant to
any of the Loan Documents shall be false or misleading in any material respect
on the date as of which made and, with respect to any such representation or
warranty not known by Borrower at the time made or deemed made to be false or
misleading, the defect causing such representation or warranty to be false or
misleading is not removed within thirty (30) days after written notice thereof
from Lender to Borrower.
(f) Default as to Other Indebtedness. Borrower, the REIT, any
Subsidiary or any Investment Affiliate shall have defaulted under any Other
Indebtedness of such party (other than Non-Recourse Indebtedness) and as a
result thereof the holders of such Other Indebtedness shall have accelerated
such Other Indebtedness (other than Non-Recourse Indebtedness), if the aggregate
amount of such accelerated Other Indebtedness (to the extent of any recourse to
Borrower, the REIT or any Subsidiary), together with the aggregate amount of any
Other Indebtedness (other than Non-Recourse Indebtedness) of Borrower, the REIT,
any Subsidiary or any Investment Affiliate which has theretofore been
accelerated (to the extent of any recourse to Borrower, the REIT or any
Subsidiary) is $10,000,000 or more.
(g) Involuntary Bankruptcy; Appointment of Receiver, etc.
(i) An involuntary case or other proceeding shall be commenced against
the REIT, Borrower, any Subsidiary, or any Agreement Party and the petition
shall not be dismissed within sixty (60) days after commencement of the
case, or a court having jurisdiction shall enter a decree or order for
relief in respect of the REIT, Borrower, any Subsidiary, or any Agreement
Party, as the case may be, in an involuntary case or other proceeding,
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect; or any other similar relief shall be granted under any
applicable federal, state or foreign law; or
(ii) A decree or order of a court having jurisdiction in the premises
for the appointment of a receiver, liquidator, sequestrator, trustee,
custodian or other officer having similar powers over Borrower, the REIT,
any Subsidiary, or any Agreement Party, or over all or a substantial part
of the property of the REIT, Borrower, any Subsidiary, or any Agreement
Party shall be entered, or an interim receiver, trustee or other custodian
of the REIT, Borrower, any Subsidiary, or any Agreement Party, or of all or
a substantial part of the property of the REIT, Borrower, any Subsidiary,
or any Agreement Party shall be appointed or a warrant of attachment,
execution or similar process against any substantial part of the property
of the REIT, Borrower, any Subsidiary, or any Agreement Party shall be
issued and any such event shall not be stayed, vacated, dismissed, bonded
or discharged within sixty (60) days of entry, appointment or issuance.
(h) Voluntary Bankruptcy; Appointment of Receiver, etc. The REIT,
Borrower, any Subsidiary, or any Agreement Party shall have an order for relief
entered with respect to it or commence a voluntary case under any applicable
bankruptcy, insolvency or other
61
similar law now or hereafter in effect, or shall consent to the entry of an
order for relief in an involuntary case, or to the conversion of an involuntary
case to a voluntary case, under any such law, or shall consent to the
appointment of or taking of possession by a receiver, trustee or other custodian
for all or a substantial part of its property; the REIT, Borrower, any
Subsidiary, or any Agreement Party shall make any assignment for the benefit of
creditors or shall be unable or fail, or admit in writing its inability, to pay
its debts as such debts become due; or the general partner(s), trustees or Board
of Directors (or any committee thereof), as applicable, of the REIT, Borrower,
any Subsidiary, or any Agreement Party adopts any resolution or otherwise
authorizes any action to approve any of the foregoing.
(i) Judgments and Attachments. (i) Any money judgments (other than a
money judgment covered by insurance but only if the insurer has admitted
liability with respect to such money judgment), writs or warrants of attachment,
or similar processes involving an aggregate amount in excess of $5,000,000 shall
be entered or filed against the REIT, Borrower, any Subsidiary, or any Agreement
Party or their respective assets and shall remain undischarged, unvacated,
unbonded or unstayed for a period of thirty (30) days, or (ii) any judgment or
order of any court or administrative agency awarding material damages shall be
entered against the REIT, Borrower, any Subsidiary, or any Agreement Party in
any action under the Federal securities laws seeking rescission of the purchase
or sale of, or for damages arising from the purchase or sale of, any Securities,
such judgment or order shall have become final after exhaustion of all available
appellate remedies and such judgment or order would have a Material Adverse
Effect.
(j) Dissolution. Any order, judgment or decree shall be entered
against the REIT, Borrower, or any Agreement Party decreeing its involuntary
dissolution or split up and such order shall remain undischarged and unstayed
for a period in excess of thirty (30) days; or the REIT, Borrower, or any
Agreement Party shall otherwise dissolve or cease to exist.
(k) Loan Documents; Failure of Security or Subordination. Any Loan
Document shall cease to be in full force and effect or any Obligation shall be
subordinated or shall not have the priority contemplated by this Agreement or
the Loan Documents for any reason or any guarantor under any guaranty of all or
any portion of the Obligations shall at any time disavow or deny liability under
such guaranty in writing.
(l) ERISA Plan Assets. Any assets of Borrower, the REIT or any
Agreement Party shall constitute "assets" (within the meaning of 29 C.F.R.
Section 2510.3-101 or any successor regulation thereto) of an "employee benefit
plan" within the meaning of Section 3(3) of ERISA or a "plan" within the meaning
of Section 4975(e)(1) of the Internal Revenue Code or Borrower, the REIT or any
Agreement Party shall be an "employee benefit plan" as defined in Section 3(3)
of ERISA, a "multiemployer plan" as defined in Sections 4001(a)(3) or 3(37) of
ERISA, or a "plan" as defined in Section 4975(e)(1) of the Internal Revenue
Code.
(m) ERISA Prohibited Transaction. The Obligations, any of the Loan
Documents or the exercise of any of Lender's rights in connection therewith
shall constitute a prohibited transaction under ERISA and/or the Internal
Revenue Code (which is not exempt from the restrictions of Section 406 of ERISA
or Section 4975 of the Internal Revenue Code and the taxes and penalties imposed
by Section 4975 of the Internal Revenue Code and Section 502(i) of ERISA).
62
(n) ERISA Liabilities. (i) Any Termination Event occurs which will or
is reasonably likely to subject Borrower, the REIT, any Subsidiary, any
Agreement Party, any ERISA Affiliate thereof or any of them to a liability which
Lender reasonably determines will have a Material Adverse Effect; (ii) the plan
administrator of any Benefit Plan applies for approval under Section 412(d) of
the Internal Revenue Code for a waiver of the minimum funding standards of
Section 412(a) of the Internal Revenue Code and Lender reasonably determines
that the business hardship upon which the Section 412(d) waiver request was
based will or would reasonably be anticipated to subject Borrower, the REIT, any
Subsidiary, any Agreement Party, or any ERISA Affiliate thereof or any of them
to a liability which Lender reasonably determines will have a Material Adverse
Effect; (iii) any Benefit Plan shall incur an "accumulated funding deficiency"
(as defined in Section 412 of the Internal Revenue Code or Section 302 of ERISA)
for which a waiver shall not have been obtained in accordance with the
applicable provisions of the Internal Revenue Code or ERISA which "accumulated
funding deficiency" will or would reasonably be anticipated to subject Borrower,
the REIT, any Subsidiary, any Agreement Party, or any ERISA Affiliate thereof or
any of them to a liability which the Lender reasonably determines will have a
Material Adverse Effect; (iv) Borrower, the REIT, any Subsidiary, any Agreement
Party, or any ERISA Affiliate thereof or any of them shall have engaged in a
transaction which is prohibited under Section 4975 of the Internal Revenue Code
or Section 406 of ERISA which will or would reasonably be anticipated to result
in the imposition of a liability on Borrower, the REIT, any Subsidiary, any
Agreement Party, or any ERISA Affiliate thereof or any of them which the Lender
reasonably determines will have a Material Adverse Effect; (v) Borrower, the
REIT, any Subsidiary, any Agreement Party, or any ERISA Affiliate thereof or any
of them shall fail to pay when due an amount which it shall have become liable
to pay to the PBGC, a Plan or a trust established under Title IV of ERISA which
failure will or would reasonably be anticipated to result in the imposition of a
liability on Borrower, the REIT, any Subsidiary, any Agreement Party, or any
ERISA Affiliate thereof or any of them which the Lender reasonably determines
will have a Material Adverse Effect; (vi) a condition shall exist by reason of
which the PBGC would be entitled to obtain a decree adjudicating that a Benefit
Plan must be terminated or have a trustee appointed to administer such Plan
which condition will or would reasonably be anticipated to result in the
imposition of a liability on Borrower, the REIT, any Subsidiary, any Agreement
Party, or any ERISA Affiliate thereof or any of them which the Lender reasonably
determines will have a Material Adverse Effect; (vii) a Lien shall be imposed on
any assets of Borrower, the REIT, any Subsidiary, any Agreement Party, or any
ERISA Affiliate thereof or any of them in favor of the PBGC or a Plan which the
Lender reasonably determines will have a Material Adverse Effect; (viii)
Borrower, the REIT, any Subsidiary, any Agreement Party, or any ERISA Affiliate
thereof or any of them shall suffer a partial or complete withdrawal from a
Multiemployer Plan or shall be in "default" (as defined in Section 4219(c)(5) of
ERISA) with respect to payments to a Multiemployer Plan resulting from a
complete or partial withdrawal (as described in Section 4203 or 4205 of ERISA)
from such Multiemployer Plan which will or would reasonably be anticipated to
result in the imposition of a liability on Borrower, the REIT, any Subsidiary,
any Agreement Party, or any ERISA Affiliate thereof or any of them which the
Lender reasonably determines will have a Material Adverse Effect; or (ix) a
proceeding shall be instituted by a fiduciary of any Multiemployer Plan against
Borrower, the REIT, any Subsidiary, any Agreement Party, or any ERISA Affiliate
thereof or any of them to enforce Section 515 of ERISA which will or would
reasonably be anticipated to result in the imposition of a liability on
Borrower, the REIT, any
63
Subsidiary, any Agreement Party, or any ERISA Affiliate thereof or any of them
which the Lender reasonably determines will have a Material Adverse Effect.
(o) Solvency. Borrower, any Agreement Party or the REIT shall cease to
be Solvent.
(p) Board of Directors. During any 12-month period, individuals who
were directors of the REIT on the first day of such period shall not constitute
a majority of the board of directors of the REIT.
(q) [INTENTIONALLY OMITTED.]
(r) Syndicated Revolving Credit Agreement. An "Event of Default" as
defined in the Syndicated Revolving Credit Agreement shall have occurred.
An Event of Default shall be deemed "continuing" until cured or waived
in writing in accordance with Section 12.05.
10.02 Rights and Remedies.
(a) Acceleration. Upon the occurrence of any Event of Default with
respect to Borrower described in the foregoing Section 10.01(g) or 10.01(h), the
obligation of Lender to make Loans hereunder shall thereupon automatically and
immediately terminate and the unpaid principal amount of and any and all accrued
interest on the Loans and all of the other Obligations shall automatically
become immediately due and payable, with all additional interest from time to
time accrued thereon and without presentment, demand or protest or other
requirements of any kind (including without limitation valuation and
appraisement, diligence, presentment, notice of intent to demand or accelerate
or notice of acceleration), all of which are hereby expressly waived by
Borrower, and the obligations of Lender to make any Loans hereunder shall
thereupon terminate; and upon the occurrence and during the continuance of any
other Event of Default, Lender may by written notice to Borrower declare the
unpaid principal amount of and any and all accrued and unpaid interest on the
Loans and all of the other Obligations to be, and the same shall thereupon be,
immediately due and payable with all additional interest from time to time
accrued thereon and without presentment, demand, or protest or other
requirements of any kind (including without limitation, valuation and
appraisement, diligence, presentment, notice of intent to demand or accelerate
and of acceleration), all of which are hereby expressly waived by Borrower, and
the obligation of Lender to make any Loans hereunder shall thereupon terminate.
Upon the occurrence of and during the continuance of an Event of Default, no
Agreement Party shall be permitted to make any distributions or dividends
without the prior written consent of Lender. Upon the occurrence of an Event of
Default or an acceleration of the Obligations, Lender may exercise all or any
portion of the rights and remedies set forth in the Loan Documents.
(b) Access to Information. Notwithstanding anything to the contrary
contained in the Loan Documents, upon the occurrence of and during the
continuance of an Event of Default, Lender shall be entitled to request and
receive, by or through Borrower or appropriate legal process, any and all
information concerning the REIT, Borrower, any Subsidiary of Borrower, any
Investment Affiliate, any Agreement Party, or any property of any of them, which
is reasonably available to or obtainable by Borrower.
64
(c) Waiver of Demand. Demand, presentment, protest and notice of
nonpayment are hereby waived by Borrower.
(d) Waivers, Amendments and Remedies. No delay or omission of Lender
to exercise any right under any Loan Document shall impair such right or be
construed to be a waiver of any Event of Default or an acquiescence therein, and
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 a writing signed by Lender, 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 Lender until the Obligations have been paid in full and
this Agreement has been terminated.
10.03 Suspension of Lending. At any time during which an Unmatured
Event of Default exists pursuant to Section 10.01(c) or Section 10.01(d) and is
not cured (by improvement in the applicable financial measure by compliance with
the applicable financial covenant in such 40-day period or as provided in
Section 10.01(d)), Borrower shall have no right to receive any additional Loans.
ARTICLE XI.
[INTENTIONALLY DELETED]
ARTICLE XII.
MISCELLANEOUS
12.01 Expenses
(a) Generally. Borrower agrees, within thirty (30) days after receipt
of a written notice from Lender, to pay or reimburse Lender for all of Lender's
reasonable costs and expenses incurred by Lender at any time (whether prior to,
on or after the date of this Agreement) in connection with: (A) the negotiation,
preparation and execution of this Agreement and the other Loan Documents and any
amendments or waivers with respect hereto requested by Borrower, including,
without limitation, the reasonable fees, expenses and disbursements of Lender's
outside counsel incurred in connection therewith; (B) the making of the Loans
and (C) the collection or enforcement by Lender of any of the Obligations,
including, without limitation, reasonable attorneys' fees and costs incurred in
connection therewith.
(b) After Event of Default. Borrower further agrees to pay, or
reimburse Lender, for all reasonable costs and expenses, including without
limitation reasonable attorneys' fees and disbursements incurred by Lender after
the occurrence of an Event of Default (i) in enforcing any Obligation or
exercising or enforcing any other right or remedy available by reason of such
Event of Default; (ii) in connection with any refinancing or restructuring of
the credit arrangements provided under this Agreement in the nature of a
"work-out" or in any insolvency or bankruptcy proceeding; (iii) in commencing,
defending or intervening in any litigation or in filing a petition, complaint,
answer, motion or other pleadings in any legal proceeding relating to Borrower,
the REIT or any Agreement Party and related to or arising out of the
transactions contemplated hereby; (iv) in taking any other action in or with
respect to any suit or proceeding (whether in bankruptcy or otherwise); (v) in
protecting, preserving, collecting,
65
leasing, selling, taking possession of, or liquidating any such collateral; or
(vi) attempting to enforce or enforcing any rights under the Loan Documents.
12.02 Indemnity
(a) Generally. Borrower shall indemnify and defend Lender and its
affiliates, participants, officers, directors, employees and agents (each an
"Indemnitee") against, and shall hold each such Indemnitee harmless from, any
and all losses, damages (whether general, punitive or otherwise), liabilities,
claims, causes of action (whether legal, equitable or administrative),
judgments, court costs and legal or other expenses (including reasonable
attorneys' fees) which such Indemnitee may suffer or incur: (i) in connection
with claims made by third parties against such Indemnitee for losses or damages
suffered by such third party as a result of (A) such Indemnitee's performance of
this Agreement or any of the other Loan Documents, including without limitation
such Indemnitee's exercise or failure to exercise any rights, remedies or powers
in connection with this Agreement or any of the other Loan Documents or (B) the
failure by Borrower, the REIT or any Agreement Party to perform any of their
respective obligations under this Agreement or any of the other Loan Documents
as and when required hereby or thereby, including without limitation any failure
of any representation or warranty of Borrower, the REIT or any Agreement Party
to be true and correct; (ii) in connection with any claim or cause of action of
any kind by any Person to the effect that such Indemnitee is in any way
responsible or liable for any act or omission by Borrower, the REIT or any
Agreement Party, whether on account of any theory of derivative liability or
otherwise, (iii) in connection with the past, present or future environmental
condition of any Property owned by Borrower, the REIT, Subsidiary or any
Agreement Party, the presence of asbestos-containing materials at any such
Property, the presence of Contaminants in groundwater at any such Property, or
the Release or threatened Release of any Contaminant into the environment from
any such Property; or (iv) in connection with any claim or cause of action of
any kind by any Person which would have the effect of denying such Indemnitee
the full benefit or protection of any provision of this Agreement or any of the
other Loan Documents.
(b) ERISA. Without limitation of the provisions of subsection (a)
above, Borrower shall indemnify and hold each Indemnitee free and harmless from
and against all loss, costs (including reasonable attorneys' fees and expenses),
expenses, taxes, and damages (including consequential damages) such Indemnitee
may suffer or incur by reason of the investigation, defense and settlement of
claims and in obtaining any prohibited transaction exemption under ERISA or the
Internal Revenue Code necessary in such Indemnitee's reasonable judgment by
reason of the inaccuracy of the representations and warranties set forth in the
first paragraph of Section 5.01(s) or a breach of the provisions set forth in
the last paragraph of Section 8.01(f).
(c) Exceptions; Limitations. Notwithstanding anything to the contrary
set forth in this Section 12.02, Borrower shall have no obligation to any
Indemnitee hereunder with respect to (i) any intentional tort, fraud or act of
gross negligence or bad faith which any Indemnitee is personally determined by
the judgment of a court of competent jurisdiction (sustained on appeal, if any)
to have committed, (ii) any liability of such Indemnitee to any third party
based upon contractual obligations of such Indemnitee owing to such third party
which are not expressly set forth in the Loan Documents or (iii) violations of
Environmental Laws relating to a Property which are caused by the act or
omission of such Indemnitee after such Indemnitee
66
takes possession of such Property and which would not have occurred if such
Indemnitee had exercised reasonable care under the circumstances. In addition,
the indemnification set forth in this Section 12.02 in favor of any officer,
director, partner, employee or agent of Lender, shall be solely in their
respective capacities as such officer, director, partner, employee or agent.
Such indemnification in favor of any affiliate of Lender shall be solely in its
capacity as the provider of services to Lender in connection with this
Agreement, and such indemnification in favor of any participant of Lender shall
be solely in its capacity as a participant in the Loans.
(d) Payment; Survival. Borrower shall pay any amount owing under this
Section 12.02 within thirty (30) days after written demand therefor by the
applicable Indemnitee together with reasonable supporting documentation
therefor. The indemnity set forth in this Section 12.02 shall survive the
payment of all amounts payable pursuant to, and secured by, this Agreement and
the other Loan Documents. Payment by any Indemnitee shall not be a condition
precedent to the obligations of Borrower under this Section 12.02. To the extent
that any indemnification obligation set forth in this Section 12.02 may be
unenforceable because it is violative of any law or public policy, Borrower
shall contribute the maximum portion which it is permitted to pay and satisfy
under applicable law, to the payment and satisfaction of the applicable
indemnified matter.
12.03 Change in Accounting Principles. Except as otherwise provided
herein, if any changes in accounting principles from those used in the
preparation of the most recent financial statements delivered to Lender pursuant
to the terms hereof are hereafter required or permitted by the rules,
regulations, pronouncements and opinions of the Financial Accounting Standards
Board or the American Institute of Certified Public Accountants (or successors
thereto or agencies with similar functions) and are adopted by the REIT,
Borrower, any Subsidiary, any Investment Affiliate, or any Agreement Party with
the agreement of its independent certified public accountants and such changes
result in a change in the method of calculation of any of the financial
covenants, standards or terms found herein, the parties hereto agree to enter
into negotiations in order to amend such provisions so as to equitably reflect
such changes with the desired result that the criteria for evaluating the
financial condition of the REIT, on a consolidated basis, shall be the same
after such changes as if such changes had not been made; provided, however, that
no change in GAAP that would affect the method of calculation of any of the
financial covenants, standards or terms shall be given effect in such
calculations until such provisions are amended, in a manner satisfactory to
Lender, to so reflect such change in accounting principles.
12.04 Setoff. In addition to any Liens granted to Lender and any
rights now or hereafter granted under applicable law and not by way of
limitation of any such Lien or rights, upon the occurrence and during the
continuance of any Event of Default, Lender is hereby authorized by Borrower at
any time or from time to time, with concurrent notice to Borrower, or to any
other Person (any such notice being hereby expressly waived) to set off and to
appropriate and to apply any and all deposits (general or special, including,
but not limited to, indebtedness evidenced by certificates of deposit, whether
matured or unmatured but not including trust accounts) and any other
indebtedness at any time held or owing by Lender solely to or for the credit or
the account of Borrower against and on account of the Obligations of Borrower to
Lender including but not limited to all Loans and all claims of any nature or
description arising out of or connected with this Agreement or any of the other
Loan Documents, irrespective of whether or not (a) Lender shall have made any
demand hereunder or (b) Lender shall have
67
declared the principal of and interest on the Loans and other amounts due
hereunder to be due and payable as permitted by Article X and although said
obligations and liabilities, or any of them, may be contingent or unmatured.
12.05 Amendments and Waivers. No amendment, modification or waiver of
any provision of this Agreement shall be effective without the written agreement
of Lender and Borrower.
12.06 Independence of Covenants. All covenants hereunder shall be
given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitations of, another covenant shall
not avoid the occurrence of an Event of Default or Unmatured Event of Default if
such action is taken or condition exists.
12.07 Notices and Delivery. Unless otherwise specifically provided
herein, any consent, notice or other communication herein required or permitted
to be given shall be in writing and may be personally served, telecopied or sent
by courier service or United States mail and shall be deemed to have been given
when delivered in person or by courier service, upon receipt of a telecopy or if
deposited in the United States mail (registered or certified, with postage
prepaid and properly addressed) upon receipt or refusal to accept delivery. For
the purposes hereof, the addresses of the parties hereto (until notice of a
change thereof is delivered as provided in this Section 12.07) shall be as set
forth below each party's name on the signature pages hereof, or, as to each
party, at such other address as may be designated by such party in a written
notice to all of the other parties.
12.08 Survival of Warranties, Indemnities and Agreements. All
agreements, representations, warranties and indemnities made or given herein or
pursuant hereto shall survive the execution and delivery of this Agreement and
the other Loan Documents and the making and repayment of the Loans hereunder and
such indemnities shall survive termination hereof.
12.09 Failure or Indulgence Not Waiver; Remedies Cumulative. Except as
otherwise expressly provided in this Agreement or any other Loan Document, no
failure or delay on the part of Lender in the exercise of any power, right or
privilege under any of the Loan Documents shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence therein
nor shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other right, power or
privilege. All rights and remedies existing under the Loan Documents are
cumulative to and not exclusive of any rights or remedies otherwise available.
12.10 Marshalling; Recourse to Security; Payments Set Aside. Lender
shall not be under any obligation to marshal any assets in favor of Borrower or
any other party or against or in payment of any or all of the Obligations.
Recourse to security shall not be required at any time. To the extent that
Borrower makes a payment or payments to Lender or Lender exercises its rights of
set off, and such payment or payments or the proceeds of such enforcement or set
off or any part thereof are subsequently invalidated, declared to be fraudulent
or preferential, set aside and/or required to be repaid to a trustee, receiver
or any other party under any bankruptcy law, state or federal law, common law or
equitable cause, then to the extent of such recovery, the Obligations or part
thereof originally intended to be satisfied, and all Liens, rights and remedies
68
therefor, shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or set off had not occurred.
12.11 Severability. In case any provision in or obligation under this
Agreement or the other Loan Documents shall be invalid, illegal or unenforceable
in any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
12.12 Headings. Section headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
12.13 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS.
12.14 Limitation of Liability. To the extent permitted by applicable
law, no claim may be made by Borrower, MHC Trust, T1000 Trust, the REIT or any
other Person against Lender, or its affiliates, directors, officers, employees,
attorneys or agents of any of them, for any punitive damages in respect of any
claim for breach of contract or any other theory of liability arising out of or
related to the transactions contemplated by this Agreement, or any act, omission
or event occurring in connection therewith; and Borrower, MHC Trust, T1000 Trust
and the REIT hereby waive, release and agree not to xxx upon any claim for any
such damages, whether or not accrued and whether or not known or suspected to
exist in its favor.
12.15 Successors and Assigns. After first obtaining the approval of
Borrower, which approval will not be unreasonably withheld (and which approval
shall not be required upon the occurrence and during the continuance of an Event
of Default or for any assignment to an Affiliate of Lender), Lender may assign
to one or more assignees all or a portion of its rights and obligations under
this Agreement (including without limitation all or a portion of its commitments
hereunder and the Loans owing to it). Borrower's rights or any interest therein
hereunder, and Borrower's duties and obligations hereunder, shall not be
assigned (whether directly, indirectly, by operation of law or otherwise)
without the consent of Lender. This Agreement and the other Loan Documents shall
be binding upon the parties hereto and their respective successors and permitted
assigns and shall inure to the benefit of the parties hereto and the successors
and permitted assigns of Lender. The terms and provisions of this Agreement
shall inure to the benefit of any permitted assignee or transferee of the Loans
and the commitment of Lender under this Agreement, and in the event of such
transfer or assignment, the rights and privileges herein conferred upon Lender
shall automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions hereof.
12.16 Usury Limitation. Each Loan Document is expressly limited so
that in no contingency or event whatsoever, whether by reason of error of fact
or law, payment, prepayment or advancement of the proceeds of the Loans,
acceleration of maturity of the unpaid principal balance of the Loans, or
otherwise, shall the amount paid or agreed to be paid to Lender for the use,
forbearance, or retention of money, including any fees or charges collected or
made in connection with the Loans which may be treated as interest under
applicable law, if any,
69
exceed the maximum legal limit (if any such limit is applicable) under United
States federal laws or state laws (to the extent not preempted by federal law,
if any), now or hereafter governing the interest payable under such Loan
Documents. If, from any circumstances whatsoever, fulfillment of any provision
hereof or any of the other Loan Documents at the time performance of such
provision shall be due, shall involve transcending the limit of validity (if
any) prescribed by law which a court of competent jurisdiction may deem
applicable hereto, then ipso facto, the obligation to be fulfilled shall be
reduced to the limit of such validity, and if from any circumstances Lender
shall ever receive as interest an amount which would exceed the maximum legal
limit (if any such limit is applicable), such amount which would be excessive
interest shall be applied to the reduction of the unpaid principal balance due
under the Loan Documents and not to the payment of interest or, if necessary, to
Borrower. Notwithstanding any other provision of this Agreement or any of the
other Loan Documents, this provision shall control every other provision of all
Loan Documents.
12.17 Confidentiality. Lender shall use reasonable efforts to assure
that any information about Borrower, the REIT, MHC Trust, T1000 Trust,
Subsidiaries and Investment Affiliates (and their respective Properties) not
generally disclosed to the public which is furnished to Lender pursuant to the
provisions of this Agreement or any of the other Loan Documents is used only for
the purposes of this Agreement and the other Loan Documents and shall not be
divulged to any other Person other than Lender and its affiliates, officers,
directors, employees and agents who are actively and directly participating in
the evaluation, administration or enforcement of the Obligations; provided,
however, that nothing herein shall affect the disclosure of any such information
(i) to the extent required by statute, rule, regulation or judicial process,
(ii) to counsel for Lender or to its accountants, (iii) to bank examiners and
auditors, (iv) to any transferee or participant or prospective transferee or
participant hereunder who agrees to be bound by this provision, (v) in
connection with the enforcement of the rights of Lender under this Agreement and
the other Loan Documents, or (vi) in connection with any litigation to which
Lender is a party so long as Lender provides Borrower with prior written notice
of the need for such disclosure and exercises reasonable efforts to obtain a
protective order with respect to such information from the court or other
tribunal before which such litigation is pending.
12.18 Consent to Jurisdiction and Service of Process; Waiver of Jury
Trial; Waiver Of Permissive Counterclaims. ALL JUDICIAL PROCEEDINGS BROUGHT
AGAINST BORROWER, THE REIT, MHC TRUST OR T1000 TRUST WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE AND ALL JUDICIAL PROCEEDINGS BROUGHT
BY BORROWER, THE REIT, MHC TRUST OR T1000 TRUST WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT SHALL BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION HAVING SITUS WITHIN THE BOUNDARIES OF THE FEDERAL COURT
DISTRICT OF THE NORTHERN DISTRICT OF ILLINOIS, AND BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, BORROWER, THE REIT, MHC TRUST AND T1000 TRUST ACCEPT, FOR ITSELF
AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS, AND IRREVOCABLY AGREE TO BE BOUND BY ANY
FINAL JUDGMENT RENDERED THEREBY FROM WHICH NO APPEAL HAS BEEN TAKEN OR IS
AVAILABLE. BORROWER, THE REIT, MHC TRUST AND T1000 TRUST HEREBY DESIGNATE AND
APPOINT XXXXX XXXXXXXX, ESQ., EQUITY LIFESTYLE PROPERTIES, INC., TWO
00
XXXXX XXXXXXXXX XXXXX, XXXXX 000, XXXXXXX, XXXXXXXX 00000, TO RECEIVE ON THEIR
BEHALF SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT, SUCH
SERVICE BEING HEREBY ACKNOWLEDGED BY SUCH PERSON TO BE EFFECTIVE AND BINDING
SERVICE IN EVERY RESPECT. SUCH APPOINTMENT SHALL BE REVOCABLE ONLY WITH LENDER'S
PRIOR WRITTEN APPROVAL. BORROWER, THE REIT, MHC TRUST AND T1000 TRUST
IRREVOCABLY CONSENT TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ITS RESPECTIVE NOTICE ADDRESS
SPECIFIED ON THE SIGNATURE PAGES HEREOF, SUCH SERVICE TO BECOME EFFECTIVE UPON
RECEIPT. BORROWER, THE REIT, MHC TRUST, T1000 TRUST AND LENDER IRREVOCABLY WAIVE
(A) TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT, AND (B) ANY OBJECTION (INCLUDING WITHOUT LIMITATION ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
IN ANY JURISDICTION SET FORTH ABOVE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF
LENDER TO BRING PROCEEDINGS AGAINST BORROWER, THE REIT, MHC TRUST OR T1000 TRUST
IN THE COURTS OF ANY OTHER JURISDICTION. BORROWER, THE REIT, MHC TRUST AND T1000
TRUST AGREE THAT THEY WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIM IN ANY
PROCEEDING BROUGHT BY LENDER WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT.
12.19 Counterparts; Effectiveness; Inconsistencies. This Agreement and
any amendments, waivers, consents or supplements may be executed in
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument. This Agreement and each of the other Loan Documents shall be
construed to the extent reasonable to be consistent one with the other, but to
the extent that the terms and conditions of this Agreement are actually and
directly inconsistent with the terms and conditions of any other Loan Document,
this Agreement shall govern.
12.20 Construction. The parties acknowledge that each party and its
counsel have reviewed and revised this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement or
any amendments or exhibits hereto.
12.21 Entire Agreement. This Agreement, taken together with all of the
other Loan Documents and all certificates and other documents delivered by
Borrower to Lender in connection herewith, embodies the entire agreement and
supersede all prior agreements, written and oral, relating to the subject matter
hereof.
12.22 Lender's Action for Its Own Protection Only The authority herein
conferred upon Lender, and any action taken by Lender, to inspect any Property
will be exercised and taken by Lender for its own protection only and may not be
relied upon by
71
Borrower for any purposes whatsoever, and Lender shall not be deemed to have
assumed any responsibility to Borrower with respect to any such action herein
authorized or taken by Lender. Any review, investigation or inspection conducted
by Lender, any consultants retained by Lender or any agent or representative of
Lender in order to verify independently Borrower's satisfaction of any
conditions precedent to the Loans, Borrower's performance of any of the
covenants, agreements and obligations of Borrower under this Agreement, or the
validity of any representations and warranties made by Borrower hereunder
(regardless of whether or not the party conducting such review, investigation or
inspection should have discovered that any of such conditions precedent were not
satisfied or that any such covenants, agreements or obligations were not
performed or that any such representations or warranties were not true), shall
not affect (or constitute a waiver by Lender of) (i) any of Borrower's
representations and warranties under this Agreement or Lender's reliance thereon
or (ii) Lender's reliance upon any certifications of Borrower required under
this Agreement or any other facts, information or reports furnished to Lender by
Borrower hereunder.
12.23 Lender's ERISA Covenant. Lender hereby agrees (a) that on the
date any Loan is disbursed hereunder no portion of the Loans will constitute
"assets" within the meaning of 29 C.F.R. Section 2510.3-101 of an "employee
benefit plan" within the meaning of Section 3(3) of ERISA or a "plan" within the
meaning of Section 4975(e)(1) of the Internal Revenue Code, and (b) that
following such date Lender shall not allocate the Loans to an account of Lender
if such allocation (i) by itself would cause the Loans to then constitute
"assets" (within the meaning of 29 C.F.R. Section 2510.3-101 or any successor
regulation thereto) of an "employee benefit plan" within the meaning of Section
3(3) of ERISA or a "plan" within the meaning of Section 4975(e)(1) of the
Internal Revenue Code and (ii) by itself would cause the Loans to constitute a
prohibited transaction under ERISA or the Internal Revenue Code (which is not
exempt from the restrictions of Section 406 of ERISA and Section 4975 of the
Internal Revenue Code and the taxes and penalties imposed by Section 4975 of the
Internal Revenue Code and Section 502(i) of ERISA) or Lender being deemed in
violation of Section 404 of ERISA.
12.24 Pledge to Federal Reserve Bank.
Notwithstanding anything to the contrary contained in this Agreement,
Lender may at any time and from time to time pledge and assign all or any
portion of its rights under all or any of the Loan Documents to a Federal
Reserve Bank; provided that no such pledge or assignment shall release Lender
from its obligations thereunder.
12.25 USA Patriot Act Notice; Compliance.
The USA Patriot Act of 2001 (Public Law 107-56) and federal
regulations issued with respect thereto require all financial institutions to
obtain, verify and record certain information that identifies individuals or
business entities which open an "account" with such financial institution.
Consequently, Lender may from time-to-time request, and Borrower shall provide
to Lender, Borrower's name, address, tax identification number and/or such other
identification information as shall be necessary for Lender to comply with
federal law. An "account" for this purpose may include, without limitation, a
deposit account, cash management service, a transaction or asset account, a
credit account, a loan or other extension of credit, and/or other financial
services product.
72
12.26 Tax Shelter Regulations.
None of Borrower, the REIT, MHC Trust, T1000 Trust nor any subsidiary
of any of the foregoing intends to treat the Loan or the transactions
contemplated by this Agreement and the other Loan Documents as being a
"reportable transaction" (within the meaning of Treasury Regulation section
1.6011-4). If Borrower, the REIT, MHC Trust, T1000 Trust or any subsidiary of
any of the foregoing or any other party to the Loan determines to take any
action inconsistent with such intention, Borrower will promptly notify Lender
thereof. If Borrower so notifies Lender, Borrower acknowledges that Lender may
treat the Loan as part of a transaction that is subject to Treasury Regulation
Section 301.6112-1, and Lender will maintain the lists and other records,
including the identity of the applicable party to the Loan as required by such
Treasury Regulation.
12.27 Document Delivery. Documents required to be delivered pursuant
to the Loan Documents shall be delivered by electronic communication and
delivery, including, the Internet, e-mail or intranet websites to which Lender
has access (including a commercial, third-party website such as xxx.Xxxxx.xxx
(xxxx://xxx.Xxxxx.xxx) or a website sponsored or hosted by Lender or Borrower)
provided that the foregoing shall not apply to notices to Lender pursuant to
Article II. Lender or the Borrower may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic delivery pursuant
to procedures previously approved by it in writing for all or particular notices
or communications. Documents delivered electronically in accordance with the
provisions of this Section 12.27 shall be deemed to have been delivered
twenty-four (24) hours after the date and time on which Lender or Borrower posts
such documents or the documents become available on a commercial website and
Borrower notifies Lender of said posting and provides a link thereto, provided
that, if such notice or other communication is not sent during the normal
business hours of the recipient, said posting date and time shall be deemed to
have commenced as of 9:00 a.m. on the opening of business on the next Business
Day for the recipient. Notwithstanding anything contained herein, in every
instance Borrower shall be required to provide paper copies of the certificate
required by Section 6.01(c) to Lender and shall deliver paper copies of any
documents to Lender if Lender requests such paper copies until a written request
to cease delivering paper copies is given by Lender.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
"Borrower"
MHC OPERATING LIMITED PARTNERSHIP,
an Illinois limited partnership
By: MHC Trust, a Maryland real estate
investment trust, its General
Partner
By: Equity LifeStyle Properties, Inc., a
Maryland corporation, its Sole
Voting Shareholder
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address:
Two Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Telecopy: 312/279-1710
S-1
"REIT"
EQUITY LIFESTYLE PROPERTIES, INC.,
a Maryland corporation
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address:
Two Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Telecopy: 312/279-1710
"MHC TRUST"
MHC TRUST, a Maryland real estate
investment trust
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address:
Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Telecopy: 312/279-1710
"T1000 XXXXX"
XXX X0000 Trust, a Maryland real estate
investment trust
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address:
Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Telecopy: 312/279-1710
S-2
"Lender"
XXXXX FARGO BANK, N.A.,
as Lender
By:
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
Address:
000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn.: Xxxxx X. Xxxxx
Telecopy: 312/782-0969
S-3
EXHIBIT C
TRANSFER AUTHORIZER DESIGNATION
(For Disbursement of Loan Proceeds by Funds Transfer)
[ ] NEW [ ] REPLACE PREVIOUS DESIGNATION [ ] ADD [ ] CHANGE
[ ] DELETE LINE NUMBER _____
The following representatives of MHC Operating Limited Partnership, an Illinois
limited partnership ("Borrower") are authorized to request the disbursement of
Loan Proceeds and initiate funds transfers for Loan Number 100762 dated (DATE OF
DOCUMENTS) among Xxxxx Fargo Bank, National Association ("Bank"), Borrower and
certain affiliates of borrower. Bank is authorized to rely on this Transfer
Authorizer Designation until it has received a new Transfer Authorizer
Designation signed by Borrower, even in the event that any or all of the
foregoing information may have changed.
MAXIMUM WIRE
NAME TITLE AMOUNT(1)
----------------------------------- ---------------------- ------------
1.
2.
3.
4.
5.
BENEFICIARY BANK AND ACCOUNT HOLDER INFORMATION
1.
TRANSFER FUNDS TO (RECEIVING PARTY ACCOUNT NAME): ______________________________
RECEIVING PARTY ACCOUNT NUMBER: _______________
RECEIVING BANK NAME, RECEIVING BANK ROUTING
CITY AND STATE: _______________________________ (ABA) NUMBER ___________________
MAXIMUM TRANSFER AMOUNT: ______________________
FURTHER CREDIT INFORMATION/INSTRUCTIONS: _______________________________________
2.
TRANSFER FUNDS TO (RECEIVING PARTY ACCOUNT NAME): ______________________________
RECEIVING PARTY ACCOUNT NUMBER: _______________
RECEIVING BANK NAME, RECEIVING BANK ROUTING
CITY AND STATE: _______________________________ (ABA) NUMBER ___________________
C-1
MAXIMUM TRANSFER AMOUNT: ______________________
FURTHER CREDIT INFORMATION/INSTRUCTIONS: _______________________________________
3.
TRANSFER FUNDS TO (RECEIVING PARTY ACCOUNT NAME): ______________________________
RECEIVING PARTY ACCOUNT NUMBER: _______________
RECEIVING BANK NAME, RECEIVING BANK ROUTING
CITY AND STATE: _______________________________ (ABA) NUMBER ___________________
MAXIMUM TRANSFER AMOUNT: _____________________
FURTHER CREDIT INFORMATION/INSTRUCTIONS: _______________________________________
----------
(1) Maximum Wire Amount may not exceed the Loan Amount.
Date: (DATE OF DOCUMENTS)
"BORROWER"
MHC OPERATING LIMITED PARTNERSHIP,
AN ILLINOIS LIMITED PARTNERSHIP
BY: MHC TRUST, A MARYLAND REAL ESTATE
INVESTMENT TRUST, ITS GENERAL
PARTNER
By:
------------------------------------
Its:
-----------------------------------
C-2
