EXHIBIT 10.2
REVOLVING CREDIT AGREEMENT
DATED AS OF MARCH 29, 1999
AMONG
NATIONAL GOLF OPERATING PARTNERSHIP, L.P.,
AS BORROWER,
NATIONAL GOLF PROPERTIES, INC.,
AS GENERAL PARTNER ANY) GUARANTOR,
THE FIRST NATIONAL BANK OF CHICAGO, AS
ADMINISTRATIVE AGENT AND LENDER,
XXXXXXX XXXXX CAPITAL CORPORATION,
AS SYNDICATION AGENT AND LENDER,
FIRST CHICAGO CAPITAL MARKETS, INC.
AND
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
AS JOINT LEAD ARRANGERS,
AND
THE SEVERAL OTHER LENDERS
FROM TIME TO TIME PARTIES HERETO
TABLE OF CONTENTS
Page
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Table of Contents
REVOLVING CREDIT AGREEMENT ................................................1
RECITALS ..................................................................1
ARTICLE I DEFINITIONS .....................................................1
ARTICLE II THE CREDIT ....................................................15
2.1 Commitment .......................................................15
2.2 Final Principal Payment ..........................................15
2.3 Loans ............................................................15
2.4 Applicable Margins ...............................................16
2.5 Commitment Fee ...................................................16
2.6 Other Fees .......................................................16
2.7 Reserved .........................................................16
2.8 Minimum Amount of Each Advance ...................................16
2.9 Prepayments; Reductions in Commitment ............................16
2.10 Method of Selecting Types and Interest Periods for New Advances ..19
2.11 Conversion and Continuation of Outstanding Advances ..............19
2.12 Changes in Interest Rate, Etc ....................................20
2.13 Rates Applicable Alter Default ...................................20
2.14 Swing Line Loans .................................................20
2.15 Extension of Facility Termination Date ...........................21
2.16 Method of Payment ................................................21
2.17 Notes; Telephonic Notices ........................................22
2.18 Interest Payment Dates; Interest and Fee Basis ...................22
2.19 Notification of Advances, Interest Rates and Prepayments .........22
2.20 Lending Installations ............................................23
2.21 Non-Receipt of Funds by the Administrative Agent .................23
2.22 Withholding Tax Exemption ........................................23
2.23 Usury ............................................................24
2.24 Applications of Moneys Received ..................................24
ARTICLE III THE LETTER OF CREDIT SUBFACILITY .............................25
3.1 Obligations to Issue .............................................25
3.2 Types and Amounts ................................................25
3.3 Conditions .......................................................26
3.4 Procedure for Issuance of Facility Letters of Credit .............26
3.5 Reimbursement Obligations; Duties of Issuing Bank ................27
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3.6 Participation ....................................................28
3.7 Payment of Reimbursement Obligations .............................29
3.8 Compensation for Facility Letters of Credit ......................30
3.9 Letter of Credit Collateral Account ..............................30
ARTICLE IV CHANGE IN CIRCUMSTANCES .......................................30
4.1 Yield Protection .................................................31
4.2 Changes in Capital Adequacy Regulations ..........................32
4.3 Availability of LIBOR Advances ...................................32
4.4 Funding Indemnification ..........................................32
4.5 Lender Statements; Survival of Indemnity .........................32
4.6 Substitutions of Lenders .........................................33
ARTICLE V CONDITIONS PRECEDENT ...........................................33
5.1 Effective Date ...................................................33
5.2 Each Advance .....................................................35
ARTICLE VI REPRESENTATIONS AND WARRANTIES ................................35
6.1 Existence ........................................................35
6.2 Authorization and Validity .......................................36
6.3 No Conflict; Government Consent ..................................36
6.4 Financial Statements; Material Adverse Change ....................36
6.5 Taxes ............................................................36
6.6 Litigation and Guarantee Obligations .............................37
6.7 Subsidiaries .....................................................37
6.8 ERISA ............................................................37
6.9 Accuracy of Information ..........................................37
6.10 Margin Stock .....................................................37
6.11 Material Agreements ..............................................37
6.12 Compliance with Laws .............................................38
6.13 Ownership of Properties ..........................................38
6.14 Investment Company Act ...........................................38
6.15 Public Utility Holding Company Act ...............................38
6.16 Solvency .........................................................38
6.17 Insurance ........................................................39
6.18 REIT Status ......................................................39
6.19 Environmental Matters ............................................39
6.20 Unencumbered Assets ..............................................40
6.21 Year 2000 Representation and Warranty ............................40
ARTICLE VII COVENANTS ....................................................40
7.1 Financial Reporting ..............................................40
7.2 Use of Proceeds ..................................................42
7.3 Notice of Default ................................................42
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7.4 Conduct of Business; Limitations on Investments ..................43
7.5 Taxes ............................................................43
7.6 Insurance ........................................................43
7.7 Compliance with Laws .............................................43
7.8 Maintenance of Properties ........................................43
7.9 Inspection .......................................................44
7.10 Maintenance of Status.............................................44
7.11 Dividends ........................................................44
7.12 Merger; Sale of Assets ...........................................44
7.13 General Partner's Ownership and Control of Borrower ..............45
7.14 Sale and Leaseback ...............................................45
7.15 Liens ............................................................45
7.16 Affiliates .......................................................45
7.17 Interest Rate Hedging ............................................46
7.18 Limitation on Variable Rate Indebtedness .........................46
7.19 Consolidated Net Worth ...........................................46
7.20 indebtedness and Cash Flow Covenants .............................46
7.21 Environmental Matters ............................................47
7.22 Control of the General Partner ...................................48
7.23 Approved Operating Leases ........................................48
7.24 Borrower's Partnership Agreement .................................48
7.25 General Partner's Assets .........................................48
7.26 Notice of Rating Change ..........................................48
7.27 Year 2000 Compliance .............................................48
7.28 Operating Leases .................................................48
7.29 Capital Expenditures .............................................48
7.30 No Negative Pledge ...............................................48
ARTICLE VIII DEFAULTS ....................................................49
8.1 Nonpayment of Principal ..........................................49
8.2 Nonpayment of Other Amounts ......................................49
8.3 Breach of Certain Covenants ......................................49
8.4 Representation of Warranty Untrue ................................49
8.5 Breach of Other Provisions .......................................49
8.6 Material Indebtedness ............................................49
8.7 Voluntary Bankruptcy .............................................50
8.8 Involuntary Bankruptcy ...........................................50
8.9 Condemnation .....................................................50
8.10 Judgments ........................................................49
8.11 AGC ..............................................................50
8.12 Pledge of AGC Ownership Interests ................................50
8.13 Ownership of AGC .................................................50
8.14 Multiemployer Plan Withdrawal Liability ..........................51
8.15 Multiemployer Plan Termination ...................................51
8.16 Environmental Remediation ........................................51
8.17 Revocation of Guaranty ...........................................51
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ARTICLE IX ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES ................51
9.1 Acceleration .....................................................51
9.2 Amendments .......................................................52
9.3 Preservation of Rights ...........................................53
ARTICLE X GENERAL PROVISIONS .............................................53
10.1 Survival of Representations ......................................53
10.2 Governmental Regulation ..........................................53
10.3 Taxes ............................................................53
10.4 Headings .........................................................53
10.5 Entire Agreement .................................................53
10.6 Several Obligations; Benefits of this Agreement ..................53
10.7 Expenses; Indemnification ........................................54
10.8 Reserved .........................................................54
10.9 Accounting .......................................................54
10.10 Severability of Provisions .......................................54
10.11 Nonliability of Lenders ..........................................54
10.12 Publicity ........................................................55
10.13 Choice Of Law ....................................................55
10.14 Consent To Jurisdiction ..........................................55
10.15 Waiver of Jury Trial .............................................55
10.16 Confidentiality ..................................................55
ARTICLE XI THE ADMINISTRATIVE AGENT AND AGREEMENTS AMONG LENDERS .........56
11.1 Appointment ......................................................56
11.2 Powers ...........................................................56
11.3 General Immunity .................................................56
11.4 No Responsibility for Loans, Recitals, etc. ......................56
11.5 Action on Instructions of Lenders ................................56
11.6 Employment of Agents and Counsel .................................57
11.7 Reliance on Documents; Counsel ...................................57
11.8 Administrative Agent's Reimbursement and Indemnification .........57
11.9 Rights as a Lender ...............................................57
11.10 Lender Credit Decision ...........................................58
11.11 Successor Administrative Agent ...................................58
11.12 Notice of Defaults ...............................................59
11.13 Requests for Approval ............................................59
11.14 Copies of Documents ..............................................59
11.15 Defaulting Lenders ...............................................59
ARTICLE XII SETOFF; RATABLE PAYMENTS .....................................60
12.1 Setoff ...........................................................60
12.2 Ratable Payments .................................................60
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(cont'd)
ARTICLE XIII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS ...........60
13.1 Successors and Assigns ...........................................60
13.2 Participations ...................................................60
13.3 Assignments ......................................................61
13.4 Dissemination of Information .....................................62
13.5. Tax Treatment ....................................................62
ARTICLE XIV NOTICES ......................................................63
14.1 Giving Notice ....................................................63
14.2 Change of Address ................................................63
ARTICLE XV COUNTERPARTS ..................................................63
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(cont'd)
Exhibits:
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Exhibit A Pricing Grid
Exhibit B Form of Note
Exhibit C Form of Opinion
Exhibit D Form of Loan/Credit Related Money Transfer Instruction
Exhibit E Form of Compliance Certificate
Exhibit F Minimum Specifications for Environmental Investigations
Exhibit G Form of Assignment Agreement
Schedules:
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Schedule 1 Subsidiaries
Schedule 2 Unencumbered Assets
Schedule 3 Approved Operators
Schedule 4 Jurisdictions from which Good Standing Certificates Must be
Delivered
Schedule 5 Current Financeable Ground Leases
Schedule 6 Golf Courses Involved in the Acquisition
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REVOLVING CREDIT AGREEMENT
This Agreement, dated as of March 29, 1999, is among National Golf
Operating Partnership, L.P., a Delaware limited partnership (the "Borrower").
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National Golf Properties, Inc., a Maryland corporation (the "General Partner"
and the "Guarantor"), First Chicago Capital Markets, Inc. ("FCCM"), Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx") and, collectively
with FCCM, the "Joint Lead Arrangers" or "Arrangers"). The First National Bank
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of Chicago ("First Chicago") as a Lender and as "Administrative Agent", Xxxxxxx
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Xxxxx Capital Corporation ("MLCC"), as a Lender and as Syndication Agent, and
the several banks, financial institutions and other entities from time to time
parties to this Agreement (collectively, with First Chicago and MLCC, the
"Lenders").
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RECITALS
A. The Borrower is primarily engaged in the business of purchasing,
developing, owning, lending upon the security of, and leasing golf course
properties.
B. The General Partner, the Borrower's sole general partner, is listed on
the New York Stock Exchange and is qualified as a real estate investment trust.
The General Partner owns approximately 58.5% of the total partnership units in
the Borrower and various limited partners in the Borrower own approximately
41.5% of such partnership units.
C. The Borrower and the General Partner have requested that the Lenders
make loans to the Borrower in the maximum aggregate amount of $300,000,000 and
the Lenders are willing on the terms and conditions set forth herein to do so.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"ABR Advance" means an Advance which bears interest at the Adjusted ABR
Rate.
"ABR Applicable Margin" means, as of any date, the Applicable Margin in
effect on such date with respect to ABR Advances and ABR Loans.
"ABR Loan" means a Loan which bears interest at the Adjusted ABR Rate.
"Acquisition" means the acquisition by the Borrower of the golf course
properties listed on Schedule 6 (including certain leasehold interests) from
certain subsidiaries of Golf Acquisitions, LLC, a Delaware limited liability
company, which is acquiring ownership of various affiliates of Meditrust
Corporation and Meditrust Operating Company that currently own such golf course
properties.
"Adjusted ABR Rate" means, for any day, a rate per annum equal to (i) the
Alternate Base Rate for such day plus (ii) the ABR Applicable Margin for such
day, in each case changing when and as the Alternate Base Rate changes.
"Administrative Agent" means The First National Bank of Chicago in its
capacity as agent for the Lenders pursuant to Article XI, and not in its
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individual capacity as a Lender, and any successor Administrative Agent
appointed pursuant to Article XI.
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"Advance" means a borrowing hereunder consisting of the aggregate amount
of the several Loans (including Swing Line Loans) made by the Lenders (or, in
the case of Swing Line Loans, the Swing Line Lender) to the Borrower of the same
Type and, in the case of LIBOR Advances, for the same Interest Period.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 50% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person
whether through ownership of stock, by conflict or otherwise.
"AGC" shall mean American Golf Corporation, a California corporation.
"Aggregate Commitment" means the aggregate of the Commitments of all the
Lenders, which shall be $300,000,000.
"Agreement" means this Revolving Credit Agreement as it may be amended or
modified and in effect from time to time.
"Allocated Facility Amount" means, at any time, the sum of all then
outstanding Advances and the then outstanding Facility Letter of Credit
Obligations.
"Alternate Base Rate" for any day means the greater of (i) the Corporate
Base Rate or (ii) the federal funds rate as published by the Federal Reserve
Bank plus one-half percent (0.50%) per annum.
"Applicable Margin" means the applicable margin set forth in the table in
Exhibit A used in calculating the interest rate applicable to the various Types
of Advances which shall vary from dine to time in accordance with Borrower's
Leverage Ratio.
"Approved Operator" means each Person listed on Schedule 3 hereto and each
other tenant under an operating lease for a Project which tenant has been
approved by the Required Lenders, such approval not to be unreasonably withheld
if the proposed tenant is an experienced, reputable operator.
"Approved Operating Lease" means an operating lease for a Project with an
Approved Operator, which lease (i) has been approved by the Required Lenders or
(ii) is in substantially the form of the form operating lease which has
theretofore been approved by the Required Lenders, with no changes thereto tat
would reasonably be anticipated to adversely affect the Borrower in any material
respect.
2
"Arrangers" means Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and
FCCM.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Authorized Officer" means any of the President, Chairman of Finance
Committee, Vice President Controller or Vice President Finance, acting singly.
"Borrower" means National Golf Operating Partnership, L.P., a Delaware
limited partnership, and its successors and permitted assigns.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.10.
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"Business Day" means (i) with respect to any borrowing, payment or rate
selection of LIBOR Advances, a day (other than a Saturday or Sunday) on which
banks generally are open in Los Angeles, California, Chicago, Illinois, and New
York, New York for the conduct of substantially all of their commercial lending
activities and on which dealings in United States dollars are carried on in the
London interbank market and (ii) for all other purposes, a day (other than a
Saturday or Sunday) on which banks generally are open in Los Angeles,
California, Chicago, Illinois and New York, New York for the conduct of
substantially all of their commercial lending activities.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person which is not a corporation
and any and all warrants or options to purchase any of the foregoing.
"Capitalization Value" means the sum of (a) the quotient obtained by
dividing Total Property Operating Income by 10.5% plus (b) art amount equal to
100% of the then-current book value, determined in accordance with GAAP, of all
first mortgage receivables of the Borrower or its Wholly-Owned Subsidiaries on
golf course properties, provided that in no event shall the aggregate amount
added to the amount determined pursuant to the, foregoing clause (a) pursuant to
this clause (b) exceed the lesser of (i) five percent (5%) of the amount
determined pursuant to the foregoing clause (a) and (ii) $50,000,000.00.
"Capitalized Lease" of a Person means any lease of Property imposing
obligations on such Person, as lessee thereunder, which are required in
accordance with GAAP to be capitalized on a balance sheet of such Person.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with GAAP.
"Cash Equivalents" means, as of any date, (i) securities issued or
directly and fully guaranteed or insured by the United States Government or any
agency or instrumentality thereof having maturities of not more than one year
from such date, (ii) time deposits and certificates of deposit having maturities
of nor more than one year from such date and issued by any domestic
3
commercial bank having (A) senior long-term unsecured debt rated at least A or
the equivalent thereof by S&P or A2 or the equivalent thereof by Xxxxx'x and (B)
capital and surplus in excess of $500,000,000, and (iii) commercial paper rated
at least A-1 or the equivalent thereof by S&P or P-1 or the equivalent thereof
by Xxxxx'x and in either ease maturing within 90 days from such date.
"Closing Date" means March 31, 1999.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Commitment" means, for each Lender, the obligation of such Lender to make
Loans not exceeding the amount set forth opposite its signature below or as set
forth in any Notice of Assignment relating to any assignment that has become
effective pursuant to Section 13.3.2, as such amount may be modified from time
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to time pursuant to the terms hereof.
"Commitment Fee" is defined in Section 2.5.
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"Condemnation" is defined in Section 8.9.
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"Consolidated Net Income" means, for any period, consolidated net income
(or loss) of the General Partner, the Borrower and its Subsidiaries for such
period determined on a consolidated basis in accordance with GAAP; provided that
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there shall be excluded (a) the income (or deficit) of any other Person accrued
prior to the date it becomes a Subsidiary of the General Partner or the Borrower
or is merged into or consolidated with the General Partner, the Borrower or any
of their Subsidiaries and (b) the undistributed earnings of any Subsidiary to
the extent that the declaration or payment of dividends or similar distributions
by such Subsidiary is not at the time permitted by the terms of any contractual
obligation or requirement of law applicable to such Subsidiary.
"Consolidated Net Worth" means, as of any date of determination, an amount
equal to (a) Capitalization Value as of such date minus (b) Consolidated Total
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Indebtedness as of such date.
"Consolidated Secured Indebtedness" means, as of any date of
determination, the sum of (a) the aggregate principal amount of all Indebtedness
of the General Partner, the Borrower and their respective Subsidiaries
outstanding at such date which is secured by a Lien on any asset of the General
Partner, the Borrower or any of their respective Subsidiaries and (b) the
excess, if any, of (i) the aggregate principal amount of all Consolidated
Unsecured Indebtedness of those Subsidiaries of the General Partner or the
Borrower which are not Guarantors over (ii) $5,000,000, determined on a
----
consolidated basis in accordance with GAAP and (c) the General Partner's and the
Borrower's pro rata share of any secured debt in Investment Affiliates.
"Consolidated Total Indebtedness" means, as of any date of determination,
all Indebtedness of the General Partner, the Borrower and their respective
Subsidiaries outstanding at such date, determined on a consolidated basis in
accordance with GAAP, plus their pro rata share of all Investment Affiliate
debt.
"Consolidated Unsecured Indebtedness" means, as of any date of
determination, the sum of the aggregate principal amount of all Indebtedness of
the General Partner, the Borrower and
4
their Subsidiaries outstanding at such date, including the Facility Letter of
Credit Obligations, which does not constitute Consolidated Secured Indebtedness.
"Controlled Group" means all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
which, together with the General Partner, the Borrower or any of their
Subsidiaries, are treated as a single employer under Section 414(b) or (c) of
the Code solely for the purposes of potential liability under Section 302(c)(11)
of ERISA and Section 412(c)(11) of the Code and the lien created under Section
302(f) of ERISA and Section 412(n) of the Code, are treated as a single employer
under Section 414(m) or (o) of the Code.
"Conversion/Continuation Notice" is defined in Section 2.11.
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"Corporate Base Rate" means a rate per annum equal to the corporate base
rate of interest announced by Administrative Agent from time to time, changing
when and as such corporate base rate changes.
"Debt Service" means, for any fiscal quarter, Interest Expense plus
scheduled principal amortization payments (excluding balloon payments), provided
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that in the case of amortization payments made less frequently than quarterly,
25% of the aggregate amortization payments for the fiscal year including such
fiscal quarter shall be included in Debt Service for such quarter and provided
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further that Debt Service shall not include any Indebtedness, extension, renewal
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or refinancing of Indebtedness among the General Partner, the Borrower and their
Subsidiaries (or any payments with respect thereto) or any repayment of
revolving credit Advances under the Facility.
"Default" means an event of Default described in Article VIII.
"Defaulting Lender" means my Lender which fails or refuses to perform its
obligations under this Agreement within the time period specified for
performance of such obligation, or, if no time frame is specified, if such
failure or refusal continues for a period of five Business Days after written
notice from the Administrative Agent; provided that if such Lender cures such
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failure or refusal, such Lender shall cease to be a Defaulting Lender.
"EBITDA" means operating income before gains and losses from sales of
Properties, equity in earnings of Investment Affiliates and minority interest in
earnings, as reported by The General Partner, the Borrower and their
Subsidiaries in accordance with GAAP, plus (i) depreciation, amortization and
cash taxes (excluding sales taxes) plus (ii) interest income on mortgage loans
on golf course properties held by the Borrower or any of its Wholly-Owned
Subsidiaries plus (iii) (without redundancy) the General Partner's and the
Borrower's pro rata share of Net Operating Income from Investment Affiliates, in
each case for the most recent four (4) full fiscal quarters for which financial
results have been reported. EBITDA shall be adjusted to include pro forma
earnings (as substantiated to the satisfaction of the Administrative Agent) for
the entire four (4) fiscal quarter period for any property acquired or placed in
service during such period and to exclude earnings during such period from any
property not owned as of the end of such period.
"Environmental Laws" means any and all applicable foreign, federal, state,
local or municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees, requirements of
5
any Governmental Authority or other requirements of law (including common law)
regulating, relating to or imposing liability or standards of conduct concerning
protection of human health or the environment, as now or may at any time
hereafter be in effect, in each case to the extent the foregoing are applicable
to the General Partner, the Borrower or any Subsidiary or any of their
respective assets or Projects.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Facility Letter of Credit" means a Letter of Credit issued hereunder.
"Facility Letter of Credit Obligations" means, as at the time of
determination thereof, all liabilities, whether actual or contingent, of the
Borrower with respect to Facility Letters of Credit, including the sum of (a)
the Reimbursement Obligations and (b) the aggregate undrawn face amount of the
then outstanding Facility Letters of Credit.
"Facility Termination Date" means March 31, 2002, as the same may be
extended pursuant to Section 2.15.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10 a.m. (Chicago
time) on such day on such transactions received by the Administrative Agent from
three Federal funds broken of recognized standing selected by the Administrative
Agent in its sole discretion.
"Financeable Ground Lease" means a Major Ground Lease satisfactory to the
Required Lenders and the Administrative Agent's counsel in their reasonable
discretion, which must provide protections for a potential leasehold mortgagee
("Mortgagee") which include, among other things (i) a remaining term of no less
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than 25 years, (ii) that the lease will not be terminated until the Mortgagee
has received notice of a default and has had a reasonable opportunity to cure or
complete foreclosure, and fails to do so, (iii) provision for a new lease on the
same terms to the Mortgagee as tenant if the ground lease is terminated for any
reason, (iv) non-merger of the fee and leasehold estates, (v) transferability of
the tenant's interest under the ground lease, without the ground lessor's prior
consent except for restrictions based on the satisfaction of certain objective
criteria acceptable to Administrative Agent, and (vi) that insurance proceeds
and condemnation awards (from the fee interest as well as the leasehold
interest) will be applied pursuant to the terms of a leasehold mortgage. The
existing Major Ground Leases described on Schedule 5 attached hereto have been
reviewed and approved for inclusion as "Financeable Ground Leases" by the
Required Lenders as of the Closing Date, notwithstanding any deviations from the
standards set forth in the preceding sentence.
"First Chicago" means The First National Bank of Chicago in its individual
capacity, and its Successors.
"Fixed Charges" means, for any fiscal quarter, (i) Debt Service plus (ii)
cash tax payments (excluding sales taxes) plus (iii) any ground lease rental
(except to the extent it has
6
been deducted from operating income for purposes of determining EBITDA) plus
(iv) required dividends on preferred stock of the General Partner and the
Subsidiaries of the General Partner and the Borrower plus (v) distributions on
account of preferred operating partnership units of the Borrower.
"Funded Debt" means, as of any date, that portion of Consolidated Total
Indebtedness represented by borrowed money.
"Funded Percentage" means, with respect to any Lender at any time, a
percentage equal to a fraction the numerator of which is the amount actually
disbursed and outstanding to Borrower by such Lender at such time (including
Swing Line Loans), and the denominator of which is the total amount disbursed
and outstanding to Borrower by all of the Lenders at such time (including Swing
Line Loans).
"Funds From Operations" means, for any period, Consolidated Net Income for
such period without giving effect to depreciation and amortization, gains or
losses from extraordinary items, gains or losses on sales of real estate, gains
or losses on investments in marketable securities and any provisions for or
benefits from income taxes for such period.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect from time to time and consistently applied.
"General Partner" means National Golf Properties, Inc., a Maryland
corporation, the sole general partner of the Borrower, and its successors and
assigns.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Guarantee Obligation" means, as to any Person (the "guaranteeing
------------
person"), any obligation (determined without duplication) of (a) the
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guaranteeing person or (b) another Person (including, without limitation, any
bank under any Letter of Credit) to induce the creation of which the
guaranteeing person has issued a reimbursement, counter-indemnity or similar
obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary obligations")
of any other third Person (the "primary obligor") in any manner, whether
---------------
directly or indirectly, including, without limitation, any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security therefor,
(ii) to advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the term
-------- -------
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the maximum stated
amount of the primary obligation relating to such Guarantee Obligation (or, if
less, the maximum stated liability set forth in the instrument embodying such
Guarantee Obligation), provided, that in the absence of any such
--------
7
stated amount or stated liability, the amount of such Guarantee Obligation shall
be such guaranteeing person's maximum reasonably anticipated liability in
respect thereof as determined by the Borrower in good faith.
"Guarantor" means the General Partner in its capacity as the guarantor
under the Guaranty and such Subsidiaries as have executed a guaranty of the
Company's Obligations hereunder.
"Guaranty" means (i) that certain Guaranty of even date herewith executed
by the Guarantor in favor of the Administrative Agent for the ratable benefit of
the Lenders, as it may be amended or modified and in effect from time to time
and (ii) any guaranty that may hereafter be executed and delivered by any
Subsidiary which is in form and substance satisfactory to the Administrative
Agent and is accompanied by such evidence of due execution and enforceability
(including, without limitation, lien searches, organizational documents, good
standing certificates, officers' certificates and opinions of counsel) as may be
required by the Administrative Agent.
"Indebtedness" of any Person at any date means without duplication, (a)
all indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of property or services (other than
current trade liabilities incurred in the ordinary course of business and
payable in accordance with customary practices), to the extent such obligations
constitute indebtedness for the purposes of GAAP, (c) any other indebtedness of
such Person which is evidenced by a note, bond, debenture or similar instrument,
(d) all Capitalized Lease Obligations, (e) all obligations of such Person in
respect of acceptances issued or created for the account of such Person, (f) all
Guarantee Obligations of such Person (excluding in any calculation of
consolidated indebtedness of the Borrower and the General Partner, Guarantee
Obligations of the Borrower or the General Partner in respect of primary
obligations of any Subsidiary), (g) all reimbursement obligations of such Person
for letters of credit and other contingent liabilities, (h) all liabilities
secured by any lien (other than liens for taxes not yet due and payable) on any
property owned by such Person even though such Person has not assumed or
otherwise become liable for the payment thereof; provided that, with respect to
liabilities which have not been assumed by such Person, the amount of such
Indebtedness shall be limited to the fair market value of the property
encumbered by such lien, (i) any repurchase obligation or liability of such
Person or any of its Subsidiaries with respect to accounts or notes receivable
sold by such Person or any of its Subsidiaries, (j) any other transaction which
is the functional equivalent of or takes the place of borrowing but which does
not constitute a liability on the consolidated balance sheet of such Person, (k)
such Person's pro rata share of debt in Investment Affiliates and (l) such
Person's pro rata share of any loans where such Person is liable as a general
partner.
"Interest Expense" means all interest expense of the General Partner, the
Borrower and their Subsidiaries determined in accordance with GAAP plus (i) the
General Partner's and the Borrower's pro rata share of interest expense in
Investment Affiliates, (ii) capitalized interest, (iii) 100% of any accrued, or
paid interest incurred on any obligation for which the Borrower or the General
Partner is wholly or partially liable under repayment, interest carry, or
performance guarantees, or other relevant liabilities, provided that no expense
shall be included more than once in such calculation even if it falls within
more than one of the foregoing categories.
8
"Interest Period" means a LIBOR Interest Period.
"Investment" of a Person means any loan, advance (other than commission,
travel and similar advances to officers and employees made in the ordinary
course of business), extension of credit (other than accounts receivable arising
in the ordinary course of business on terms customary in the trade), deposit
account or contribution of capital by such Person to any other Person (other
than a Subsidiary of such Person) or any investment in, or purchase or other
acquisition of, the stock, partnership interests, notes, debentures or other
securities of any other Person (other than a Subsidiary of such Person) made by
such Person.
"Investment Affiliate" means any Person in which the General Partner or
the Borrower, directly or indirectly, has an ownership interest, whose financial
results are not consolidated under GAAP with the financial results of the
General Partner or the Borrower on the consolidated financial statements of the
General Partner or the Borrower.
"Issuing Bank" means, with respect to each Facility Letter of Credit, the
Lender which issues such Facility Letter of Credit.
"Lenders" means the lending institutions listed on the signature pages of
this Agreement, their respective successors and assigns and any other lending
institutions that subsequently become parties to this Agreement pursuant to
Section 13.3.
"Lending Installation" means, with respect to a Lender, any office,
branch, subsidiary or affiliate of such Lender.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Letter of Credit Collateral Account" is defined in Section 3.9.
-----------
"Leverage Ratio" means, as of the date of determination, the ratio of
Funded Debt to Capitalization Value.
"LIBOR Advance" means an Advance which bears interest at a LIBOR Rate.
"LIBOR Applicable Margin" means, as of any date with respect to any LIBOR
Interest Period, the Applicable Margin in effect for such LIBOR Interest Period
as determined in accordance with Section 2.4 hereof.
-----------
"LIBOR Base Rate" means, with respect to a LIBOR Advance for the relevant
LIBOR Interest Period, the rate determined by the Administrative Agent to be the
rate at which deposits in U.S. dollars are offered by First Chicago to
first-class banks in the London interbank market at approximately 11 a.m.
(London time) two Business Days prior to the first day of such LIBOR Interest
Period, in the approximate amount of the relevant LIBOR Advance and having a
maturity approximately equal to such LIBOR Interest Period.
"LIBOR Interest Period" means, with respect to a LIBOR Advance, a period
of one, two, three or six months commencing on a Business Day selected by the
Borrower pursuant to this
9
Agreement. Such LIBOR Interest Period shall end on (but exclude) the day which
corresponds numerically to such date one, two, three or six months thereafter,
provided, however, that if there is no such numerically corresponding day in
such next, second, third or sixth succeeding month, such LIBOR Interest Period
shall end on the last Business Day of such next, second, third or sixth
succeeding month. If a LIBOR Interest Period would otherwise end on a day which
is not a Business Day, such LIBOR Interest Period shall cud on the next
succeeding Business Day, provided, however, that if said next succeeding
Business Day falls in a new calendar month, such LIBOR interest Period shall end
on the immediately preceding Business Day.
"LIBOR Loan" means a Loan which bears interest at a LIBOR Rate.
"LIBOR Rate" means, with respect to a LIBOR Advance for the relevant LIBOR
Interest Period, the sum of (i) the quotient of (a) the LIBOR Base Rate
applicable to such LIBOR Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such LIBOR Interest Period,
plus (ii) the LIBOR Applicable Margin in effect on the day that such LIBOR Base
Rate was determined. The LIBOR Rate shall be rounded to the next higher multiple
of 1/16 of 1%.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement of any kind or nature whatsoever
(including, without limitation, the interest of a vendor or lessor under any
conditional sale. Capitalized Lease or other title retention agreement).
"Loan" means, with respect to a Lender, such Lender's portion of any
Advance.
"Loan Documents" means this Agreement, the Note, the Guaranty, and any
other document from time to time evidencing or securing indebtedness or
obligations incurred by the General Partner or the Borrower under this
Agreement, as any of the foregoing may be amended or modified from time to time.
"Major Ground Lease" means a ground lease demising to the Borrower or a
Guarantor all of the land included in any Project or any portion of such land
which the Administrative Agent, in its reasonable judgement, deems necessary for
the continued operation of a golf course on such Project.
"Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), results of operations,
or prospects of the General Partner, the Borrower and their Subsidiaries taken
as a whole, (ii) the ability of the General Partner or the Borrower to perform
their obligations under the Loan Documents, or (iii) the validity or
enforceability of any of the Loan Documents or the rights or remedies of the
Administrative Agent or the Lenders thereunder.
"Materials of Environmental Concern" means any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including, without limitation, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.
"Maximum Legal Rate" means the maximum nonusurious interest rate, if any,
that at any time or from time to time may be contracted for, taken, reserved,
charged or received on the
10
indebtedness evidenced by the Note and as provided for herein or in the Note or
other Loan Documents, under the laws of such state or states whose laws are held
by any court of competent jurisdiction to govern the interest rate provisions of
the Loan.
"Xxxxxxx Xxxxx" means Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated.
"Moody's" means Xxxxx'x Investors Service, Inc. and its successors.
"Multiemployer Plan" means any "multiemployer plan," as defined in Section
4001(a)(3) of ERISA, which the General Partner, the Borrower or any member of
the Controlled Group maintains, administers, contributes to or is required to
contribute to, or may incur any liability.
"Net Cash Proceeds" means, with respect to any sale, transfer or other
disposition of any asset or the sale or issuance of any Indebtedness or stock,
partnership interests or other ownership interest or warrants, rights or options
to acquire any of the same by any Person, the aggregate amount of cash received
from time to time by or on behalf of such Person in connection with such
transaction after deducting therefrom only (a) reasonable and customary
brokerage commissions, underwriting fees and discounts, legal fees, finder's
fees and other similar fees and commissions and (b) the amount of taxes payable
in connection with or as a direct result of such transaction and, in the case of
a sale or disposition of assets, the amount of any distributions required to be
made in order to avoid the imposition of any corporate level income or excise
tax and (c) the amount of any Indebtedness secured by a Lien on such asset that,
by the terms of such transaction, is required to be repaid upon such
disposition, in each case with respect to the foregoing clauses (a) and (c) to
the extent, but only to the extent, that the amounts so deducted are, at the
time of receipt of such cash, actually paid to a Person that is not an Affiliate
and are properly attributable to such transaction or to the asset that is the
subject thereof.
"Net Operating Income" means, with respect to any Investment Affiliate for
any period, such entity's operating income minus all operating expenses (as
determined in accordance with GAAP) incurred in connection with and directly
attributable to the generation of such operating income but excluding interest
expense and other debt service charges and any non cash charges such as
depreciation or amortization of financing costs.
"Note" means a promissory note, in substantially the form of Exhibit B
hereto, duly executed by the Borrower and payable to the order of a Lender in
the amount of its Commitment, including any amendment, modification, renewal or
replacement of such promissory note.
"Note Purchase Agreements" shall mean, collectively, (i) the Note Purchase
Agreement dated as of December 15, 1994 between National Golf Operating
Partnership and the Purchasers listed therein with respect to Series A
$50,000,000 8.68% Guarantied Senior Promissory Notes due December 15, 2004 and
Series B $50,000,000 8.73% Guarantied Senior Promissory Notes due June 15, 2005
and (ii) the Restated Note Agreement dated as of July 1, 1996 between National
Golf Operating Partnership and the Purchasers listed therein with respect to
Series A-1 $14,758,700 7.9% Guarantied Senior Promissory Notes due June 15,
2006, Series A-2 $13,794,200 7.9% Guarantied Senior Promissory Notes due June
15, 2006, Series A-3 $11,447,100 7.9% Guarantied Senior Promissory Notes due
June 15, 2006 and Series B $35,000,000 8% Guarantied Senior Promissory Notes due
10 years from the date of issuance.
11
"Notice of Assignment" is defined in Section 13.3.2.
--------------
"Obligations" means the Advances, the Facility Letter of Credit
Obligations and all accrued and unpaid fees and all expenses, reimbursements,
indemnities and other obligations of Borrower to the Administrative Agent, the
Lenders or any indemnified party hereunder arising under this Agreement or any
of the other Loan Documents.
"Participants" is defined in Section 13.2.1.
--------------
"Payment Date" means, with respect to the payment of interest accrued on
any ABR Advance, the first day of each calendar month and, with respect to the
payment of interest accrued on any LIBOR Advance, the last day of the Interest
Period relating thereto or, if sooner, the last day of the third month of such
Interest Period.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Percentage" means, for each Lender, the ratio tat such Lender's
Commitment bears to the Aggregate Commitment, expressed as a percentage.
"Permitted Liens" are defined in Section 7.15.
------------
"Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title IV
of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which the General Partner, the Borrower or any member of the
Controlled Group may have any liability.
"Project" means any real estate asset owned or operated by the Borrower or
any Subsidiary and operated or intended to be operated as, or ancillary to, a
golf course.
"Property" of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased or
operated by such Person.
"Purchasers" is defined in Section 13.3.1.
--------------
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
"Reimbursement Obligations" means at any time, the aggregate of the
Obligations of the Borrower to the Lenders, the Issuing Bank and the
Administrative Agent in respect of all unreimbursed payments or disbursements
made by the Lenders, the Issuing Bank and the Administrative Agent under or in
respect of the Facility Letters of Credit.
"Reportable Event" means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events
12
as to which the PBGC by regulation waived the requirement of Section 4043(a) of
ERISA that it be notified within 30 days of the occurrence of such event,
provided, however, that a failure to meet the minimum funding standard of
Section 412 of the Code and of Section 302 of ERISA shall be a Reportable Event
regardless of the issuance of any such waiver of the notice requirement in
accordance with either Section 4043(a) of ERISA or Section 412(d) of the Code.
"Required Lenders" means Lenders in the aggregate having at least 66 2/3%
of the Aggregate Commitment (not held by Defaulting Lenders who are not entitled
to vote) or, if the Aggregate Commitment has been terminated, Lenders in the
aggregate holding at least 66 2/3% of the aggregate unpaid principal amount of
the outstanding Advances (not held by Defaulting Lenders who are not entitled to
vote).
"Reserve Requirement" means, with respect to a LIBOR Interest Period, the
maximum aggregate reserve requirement on Eurocurrency liabilities.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Section 1031 Transaction" means any transaction or series of related
transactions which qualifies as an exchange pursuant to Section 1031 of the
Code.
"Single Employer Plan" means a Plan which is maintained by the General
Partner or the Borrower or any member of the Controlled Group for employees of
the General Partner or the Borrower or any member of the Controlled Group and
which is not a Multiemployer Plan.
"Subsidiary" means, as to any Person, a corporation, partnership or other
entity the financial results of which, in accordance with GAAP, are consolidated
with the financial results of such Person on the consolidated financial
statements of such Person. Unless otherwise qualified, all references to a
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a Subsidiary
or Subsidiaries of the Borrower or the General Partner.
"Substantial Portion" means, at any time of determination, with respect to
the Property of the General Partner, the Borrower or their Subsidiaries,
Property which represents more than 10% of the Capitalization Value for the most
recent four calendar quarters for which results have been reported.
"Super Majority Lenders" means Lenders in the aggregate having at least
80% of the Aggregate Commitment (not held by Defaulting Lenders who are not
entitled to vote) or, if the Aggregate Commitment has been terminated, Lenders
in the aggregate holding at least 80% of the aggregate unpaid principal amount
of the outstanding Advances (not held by Defaulting Lenders who are not entitled
to vote).
"Swing Line Lender" shall mean Administrative Agent, in its capacity as a
Lender.
"Swing Line Loans" means loans of up to $5,000,000 made by the Swing Line
Lender in accordance with Section 2.14 hereof.
------------
"S&P" means Standard & Poor's Ratings Group and its successors.
13
"Total Property Operating Income" means (i) EBITDA less (ii) interest
----
income on mortgage loans on golf course properties held by the Borrower or any
of its wholly-owned Subsidiaries, all for the most recent four (4) fiscal
quarters for which financial results have been reported.
"Transferee" is defined in Section 13.4.
------------
"Type" means, with respect to any Advance, its nature as an ABR Advance or
a LIBOR Advance.
"Unencumbered Asset" means, with respect to any Project which is in
service, at any date of determination, the circumstance that such asset on such
date is wholly owned by the Borrower or a Guarantor holding a fee simple
interest or the tenant's interest under a Financeable Ground Lease and (a) is
not subject to any Liens or claims (including restrictions on transferability or
assignability) of any kind (including any such Lien, claim or restriction
imposed by the organizational documents of any Subsidiary, but excluding
Permitted Liens other than those identified in Sections 7.15(v)), (b) is not
----------------
subject to any agreement (including (i) any agreement governing Indebtedness
incurred in order to finance or refinance the acquisition of such asset, and
(ii) if applicable, the organizational documents of any Subsidiary) which
prohibits or limits the ability of the General Partner, the Borrower or any of
their Subsidiaries to create, incur, assume or suffer to exist any Lien upon any
assets or Capital Stock of the General Partner, the Borrower or any of their
Subsidiaries, and (c) is not subject to any agreement (including any agreement
governing Indebtedness incurred in order to finance or refinance the acquisition
of such asset) which entitles any Person to the benefit of any Lien (but
excluding Permitted Liens other than those identified in Sections 7.15(v)) on
----------------
any assets or Capital Stock of the General Xxxxxx, the Borrower or any of their
Subsidiaries. or would entitle any Person to the benefit of any Lien (but
excluding Permitted Liens (other than those identified in Sections 7.15(v)) on
----------------
such assets or Capital Stock upon the occurrence of any contingency (including,
without limitation, pursuant to an "equal and ratable" clause) and (d) is
located in the United States. Each Unencumbered Asset must be leased to an
Approved Operator pursuant to an Approved Operating Lease. Notwithstanding the
foregoing, any Project which would be an Unencumbered Asset but for the
existence of any "equal and ratable" clause in the Note Purchase Agreements
shall be an Unencumbered Asset for all purposes of this Agreement.
"Unfunded Liabilities" means the amount (if any) by which the present
value of all vested nonforfeitable benefits under all Single Employer Plans
exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Single Employer Plans.
"Unmatured Default" means an event which but for the lapse of time or the
giving of notice, or both, would constitute a Default.
"Unrestricted Cash and Cash Equivalents" means, as of any date of
determination, the sum of (a) the aggregate amount of Unrestricted cash then
held by the Borrower or any of its consolidated Subsidiaries and (b) the
aggregate amount of Unrestricted Cash Equivalents (valued at the lower of cost
and fair market value) then held by the Borrower or any of its consolidated
Subsidiaries. As used in this definition, "Unrestricted" means the specified
asset is not subject to any Liens of any kind in favor of any Person.
14
"Value of Unencumbered Assets" means, as of the end of a quarter, the
value of all Unencumbered Assets owned or leased pursuant to a Financeable
Ground Lease by the Borrower or a Guarantor as of such date, determined by
dividing (a) the result obtained by subtracting from the Total Property
Operating Income (i) the Borrower's and General Partner's share of the Net
Operating income of Investment Affiliates, and (ii) the difference between (A)
gross rental income for the most recent four (4) fiscal quarters for which
financial results have been reported attributable to Properties which are not,
as of the end of such quarter. Unencumbered Assets and (B) an allocation of
general and administrative expense equal to seven percent (7%) of such gross
rental income by (b) 10.5%. The gross rental income of Properties which are not
Unencumbered Assets shall be adjusted to include pro forma gross rental income
(as substantiated to the satisfaction of the Administrative Agent) for such four
(4) fiscal quarter period for any such Property acquired or placed in service
during such period and to exclude gross rental income during such period from
any such Property not owned as of the end of such period, provided that in no
event shall Unencumbered Assets held pursuant to Financeable Ground Leases
exceed 7% of the total Value of Unencumbered Assets.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of the
outstanding voting securities of which shall at the time be owned or controlled,
directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries
of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of
such Person, or (ii) any partnership, association, joint venture or similar
business organization 100% of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled.
The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms.
ARTICLE II
THE CREDIT
2.1 Commitment. From and including the date of this Agreement and prior to
----------
the Facility Termination Date, each Lender severally agrees, subject to the
terms and conditions set forth in this Agreement, to make Loans to the Borrower
from time to time, provided the making of any such Loan will not cause the total
--------
of the outstanding principal balance of all Loans (including Swing Line Loans)
and the Facility Letter of Credit Obligations to exceed the Aggregate
Commitment. Except for Swing Line Loans, each Lender shall fund its Percentage
of each Advance and no Lender will be required to fund any amount, which when
aggregated with such Lender's Percentage of: (i) all other Advances ten
outstanding, (ii) Facility Letter of Credit Obligations, and (iii) all Swing
Line Loans then outstanding (after giving effect to any repayment of Swing Line
Loans to be made with the proceeds of such Advance), would exceed such Lender's
Commitment. Subject to the terms of this Agreement, the Borrower may borrow,
repay and reborrow at any time prior to the Facility Termination Date. The
Commitments of each Lender to lend hereunder shall expire on the Facility
Termination Date.
2.2 Final Principal Payment. Any outstanding Advances and all other unpaid
-----------------------
Obligations shall be paid in full by the Borrower on the Facility Termination
Date.
2.3 Loans. Each Advance hereunder shall consist of Loans made from the
-----
several Lenders ratably in proportion to the ratio that their respective
Commitments bear to the
15
Aggregate Commitment except for Swing Line Loans which shall be made by the
Swing Line Lender in accordance with Section 2.14 The Advances may be ABR
------------
Advances or LIBOR Advances, or a combination thereof, selected by the Borrower
in accordance with Sections 2.10 and 2.11.
------------- ----
2.4 Applicable Margins. The ABR Applicable Margin and the LIBOR Applicable
------------------
Margin (as set forth in Exhibit A) to be used in calculating the interest rate
applicable to different Types of Advances shall vary from time to time in
accordance with the Borrower's Leverage Ratio.
2.5 Commitment Fee. The Borrower agrees to pay to the Administrative Agent
--------------
for the account of each Lender a commitment Fee (the "Commitment Fee")
--------------
calculated on a daily basis at a rate per annum ("Commitment Fee Rate") on the
-------------------
daily unborrowed and unallocated portion of such Lender's Commitment (which is
equal to the difference between such Lender's Commitment and the sum of (i) such
Lender's Percentage of any Facility Letters of Credit then outstanding plus (ii)
all then-outstanding Loans owed to such Lender) for each day from the Closing
Date to and including the Facility Termination Date. The Commitment Fee Rate
shall vary from time to time based on the Borrower's Leverage Ratio as set forth
in the table attached hereto as Exhibit A. The Commitment Fee shall be payable
---------
quarterly in arrears on the last Business Day of each calendar quarter hereafter
beginning June 30, 1999 and on the Facility Termination Date.
2.6 Other Fees. The Borrower will pay to the Arrangers when and as due the
----------
fees specified in that certain Fee Letter among the Borrower, First Chicago,
MLCC and the Arrangers dated March 18, 1999.
2.7 Reserved.
--------
2.8 Minimum Amount of Each Advance. Each LIBOR Advance shall be in the
------------------------------
minimum amount of $5,000,000 (and in multiples of $1,000,000 if in excess
thereof), and each ABR Advance shall be in the minimum amount of $l,000,000 (and
in multiples of $500,000 if in excess thereof), provided, however, that any ABR
Advance may be in the amount of the unused Aggregate Commitment.
2.9 Prepayments: Reductions in Commitment.
-------------------------------------
(a) Voluntary Prepayments. The Borrower may from time to time pay,
---------------------
without penalty or premium, all or any part of outstanding ABR Advances
upon one Business Day's prior notice to the Administrative Agent, provided
that the amount of any such payment shall not be less than $1,000,000. The
Borrower may from time to time pay a LIBOR Advance, provided a LIBOR
Advance may not be paid prior to the last day of the applicable Interest
Period unless accompanied by any amount due pursuant to Section 4.4.
-----------
(b) Mandatory Payments Related to Commitment Reductions.
---------------------------------------------------
(i) Net Cash Proceeds of Equity Offering. On the date of
------------------------------------
receipt by the Borrower, the General Partner or any of
their Subsidiaries of the Net Cash Proceeds from the
sale or issuance of any stock,
16
partnership interest or other equity interest
(including, for purposes of this clause (i), equity-like
securities containing terms and conditions deemed to
approximate an equity interest in the discretion of the
Required Lenders) in Borrower, the General Partner or
any of their Subsidiaries, except for (A) issuance and
exercise of stock or stock options to employees of such
Person as part of their overall compensation package,
(B) capital contributions by General Partner and/or
Borrower to their respective Subsidiaries and (C)
limited partnership interests in Borrower issued in
exchange for the contribution of Properties to Borrower,
the Aggregate Commitment shall be permanently and
irrevocably reduced by 50% of the amount of such Net
Cash Proceeds until the Aggregate Commitment has been
permanently reduced to $225,000,000 and the Borrower
shall, if necessary, prepay an aggregate principal
amount of the Advances sufficient to cause the Allocated
Facility Amount to be equal to or less than the reduced
Aggregate Commitment. Notwithstanding the foregoing, the
Aggregate Commitment shall not be reduced by, and the
Borrower shall not be required to make any prepayment on
account of, the first $50,000,000 of Net Cash Proceeds
from any such sale or issuance of stock, partnership
interest or other equity interest which are received
prior to December 31, 1999.
(ii) Net Cash Proceeds of Property Sales. On the date of
-----------------------------------
receipt by the Borrower, the General Partner or any of
their Subsidiaries of the Net Cash proceeds of the sale,
transfer or other disposition of any assets of Borrower,
the General Partner or any of their Subsidiaries, except
for (A) proceeds of the sale of inventory in the
ordinary course of business, (B) proceeds of sales of
damaged, worn or obsolete equipment to the extent such
proceeds are intended to be (and are) used to purchase
replacements for such equipment within 180 days or sales
of damaged, worn or obsolete equipment made after the
purchase of replacements for such equipment, (C)
proceeds of any sale or disposition of assets which are
used to acquire other property in a Section 1031
Transaction or which are invested in substantially
similar assets within twelve (12) months of such sale or
disposition, and (D) any leases of golf course
properties in the ordinary course of business, the
Aggregate Commitment shall be permanently and
irrevocably reduced by 100% of the amount of such Net
Cash Proceeds and the Borrower shall, if necessary,
prepay an aggregate principal amount of the Advances
sufficient to cause the Allocated Facility Amount to be
equal to or less than the reduced Aggregate Commitment.
The Borrower shall deliver to the Administrative Agent a
certificate regarding its permitted use of such Net Cash
Proceeds not later than three (3) Business Days prior to
the applicable outside date. If Borrower fails to
deliver such a certificate or if such certificate
discloses that any Net Cash Proceeds within the
reinvestment
17
exceptions in the preceding sentence have not been so
used by the applicable date, the Aggregate Commitment
shall be automatically reduced on such date by the full
amount of such Net Cash Proceeds (if no certificate is
delivered) or any unused portion thereof, if such a
certificate is given, and the Borrower shall, if
necessary, prepay an aggregate principal amount of the
Advances sufficient to cause the Allocated Facility
Amount to be equal to or less than the reduced Aggregate
Commitment.
(iii) Net Cash Proceeds of Dept. On the date of receipt by the
-------------------------
Borrower, the General Partner or any of their
Subsidiaries of the Net Cash Proceeds from the
incurrence or issuance by the Borrower, the General
Partner or any of their Subsidiaries of any Indebtedness
except for (A) Indebtedness that constitutes an
equity-like security included as equity under Section
-------
2.9(b)(i) and (B) Indebtedness secured by a real
---------
property mortgage or deed of trust to the extent that
proceeds thereof are used to purchase or refinance (to
the extent only of the existing purchase money debt) the
purchase of the Property that is the security for such
Indebtedness, the Aggregate Commitment shell be
permanently and irrevocably reduced by 100% of the
amount of such Net Cash Proceeds and the Borrower shall,
if necessary, prepay an aggregate principal amount of
the Advances sufficient to cause the Allocated Facility
Amount to be equal to or less than the reduced Aggregate
Commitment.
(iv) Notice and Effect of Reductions. The Borrower shall give
-------------------------------
the Administrative Agent no less than three (3) Business
Days prior written notice of any anticipated receipt of
Net Cash Proceeds. On the first Business Day after
receipt of such Net Cash Proceeds, the Borrower shall
deliver to the Administrative Agent a certificate
showing the source and amount of such Net Cash Proceeds
and, if no reduction is required in the Aggregate
Commitment due to one of the foregoing exceptions,
certifying that all of the conditions to such exception,
have been met. If any such reduction would result in the
reduced Aggregate Commitment being less than the
then-outstanding Facility Letter of Credit Obligations
the Borrower shall deposit the related excess Net Cash
Proceeds not used to repay Advances into the Letter of
Credit Collateral Account.
(c) Voluntary Reduction Aggregate Commitment. Upon at least one (1)
----------------------------------------
Business Day prior irrevocable written notice (or telephonic notice
promptly confirmed in writing) to the Administrative Agent, Borrower shall
have the right, without premium or penalty, to terminate the Aggregate
Commitment in whole or in part provided that (a) Borrower may not reduce
the Aggregate Commitment below the Allocated Facility Amount at the time
of such requested reduction, and (b) any such partial termination shall be
in the minimum aggregate amount of Five Million Dollars ($5,000,000.00) or
any integral multiple of One Million Dollars ($l.000,000.00) in excess
thereof.
18
(d) Effect of Reduction of Commitment. Any reduction in the
---------------------------------
Aggregate Commitment pursuant to this Section 2.9 shall be applied pro
-----------
rata to each Lender's Commitment and any prepayment under this Section 2.9
shall be applied first to repay Swing Line Loans and then to repay other
Advances on a pro rata basis.
2.10 Method of Selecting types and Interest Periods for New Advances. The
---------------------------------------------------------------
Borrower shall select the Type of Advance and, in the case of each LIBOR
Advance, the Interest Period applicable to each Advance from time to time. The
Borrower shall give the Administrative Agent irrevocable notice (a "Borrowing
Notice") (i) not later than noon Chicago time, at least one (1) Business Day
before the Borrowing Date of each ABR Advance? (ii) not later than noon Chicago
time, at least three (3) Business Days before the Borrowing Date for each LIBOR
Advance, and (iii) not later than noon Chicago time on the Borrowing Date for
each Swing Line Loan, specifying:
(a) the Borrowing Date, which shall be a Business Day, of such
Advance,
(b) the aggregate amount of such Advance,
(c) the Type of Advance selected (which must be an ABR Advance in
the case of the Swing Line Loans), and
(d) in the case of each LIBOR Advance, the Interest Period
applicable thereto.
Not later than 10:00 a.m. (Chicago time) on each Borrowing Date, each
Lender shall make available its Loan or Loans, in funds immediately available in
Chicago to the Administrative Agent at its address specified pursuant to Article
-------
XIV. The Lenders shall not be obligated to match fund their LIBOR Advances. The
---
Administrative Agent will make the funds so received from the Lenders available
to the Borrower at the Administrative Agents aforesaid address.
No Interest Period may end after the Facility Termination Date and, unless
all of the Lenders otherwise agree in writing, in no event may there be more
than ten (10) different Interest Periods for LIBOR Advances outstanding at any
one time.
Notwithstanding anything to the contrary set forth herein, for the period
from the date hereof until the earlier to occur of (i) 60 days after the date of
the initial Advance hereunder and (ii) completion of the syndication of the
Facility, LIBOR Advances shall not be available hereunder for an Interest Period
of more than seven (7) days, and then only at any LIBOR Base Rate determined by
Arrangers in their sole discretion.
2.11 Conversion and Continuation of Outstanding Advances. ABR Advances
---------------------------------------------------
shall continue as ABR Advances unless and until such ABR Advances are converted
into LIBOR Advances. Each LIBOR Advance shall continue as a LIBOR Advance until
the end of the then applicable Interest Period therefor, at which time such
LIBOR Advance shall be automatically converted into an ABR Advance unless the
Borrower shall have given the Administrative Agent a Conversion/Continuation
Notice requesting that, at the end of such Interest Period, such LIBOR Advance
continue as a LIBOR Advance for the same or another Interest Period. Subject to
the terms of Section 2.8, the Borrower may elect from time to time to convert
-----------
all or any part of an Advance of any Type into any other Type of Advance;
provided that any conversion of any
19
LIBOR Advance shall be made on, and only on, the last day of the Interest Period
applicable thereto. The Borrower shall give the Administrative Agent irrevocable
notice (a "Conversion/Continuation Notice") of each conversion of an Advance or
continuation of a LIBOR Advance not later than noon (Chicago time) at least one
Business Day, in the case of a conversion into an ABR Advance, or three Business
Days, in the case of a conversion into or continuation of a LIBOR Advance, prior
to the date of the requested conversion or continuation, specifying:
(i) the requested date which shall be a Business Day, of such
conversion or continuation;
(ii) the aggregate amount and Type of the Advance which is to be
convened or continued; and
(iii) the amount and Type(s) of Advance(s) into which such Advance is to
be converted or continued and, in the case of a conversion into or
continuation of a LIBOR Advance, the duration of the Interest
Period applicable thereto.
2.12 Changes in Interest Rate, Etc. Each ABR Advance shall bear interest
-----------------------------
on the outstanding principal amount thereof, for each day from and including the
date such Advance is made or is convened from a LIBOR Advance into an ABR
Advance pursuant to Section 2.11 to but excluding the date it becomes due or is
------------
converted into a LIBOR Advance pursuant to Section 2.11 hereof, at a rate per
------------
annum equal to the Adjusted ABR. Rate for such day. Changes in the rate of
interest on that portion of any Advance maintained as a ABR Advance will take
effect simultaneously with each change in the Alternate Base Rate. Each LIBOR
Advance shall bear interest from and including the first day of the Interest
Period applicable thereto to (but not including) the last day of such interest
Period at the interest rate determined in accordance with the terra, hereof as
applicable to such LIBOR Advance.
2.13 Rates Applicable After Default. Notwithstanding anything to the
------------------------------
contrary contained in Section 2.10 or 2.11, during the continuance of a Default
------------ ----
or Unmatured Default the Required Lenders may, at their option, by notice to the
Borrower (which notice may be revoked at the option of the Required Lenders
notwithstanding any provision of Section 9.2 requiring unanimous consent of the
-----------
Lenders to changes in interest rates), declare that no Advance may be made as,
converted into or continued beyond its current term as a LIBOR Advance. During
the continuance of a Default the Required Lenders may, at their option, by
notice to the Borrower (which notice may be revoked at the option of the
Required Lenders notwithstanding any provision of Section 9.2 requiring
-----------
unanimous consent of the Lenders to changes iii interest rates), declare that
(i) each LIBOR Advance shall bear interest for the remainder of the applicable
Interest Period at the rate otherwise applicable to such Interest Period plus 2%
per annum and (ii) each ABR Advance shall bear interest at a rate per annum
equal to the Adjusted ABR Rate otherwise applicable to the ABR Advance plus 2%
per annum (each such rate being a "Default Rate"); provided that such rates
shall become applicable automatically without notice to the Borrower if a
Default occurs under Section 8.7 or Section 8.8 with respect to the Borrower or
----------- -----------
a Guarantor.
2.14 Swing Line Loans. In addition to the other options available to
----------------
Borrower hereunder, up to $5,000,000 of the Swing Line Lender's Commitment shall
be available for
20
Swing Line Loans subject to the following terms and conditions. Swing Line Loans
shall be made available for same day borrowings provided that notice is given in
accordance with Section 2.10 hereof. All Swing Line Loans shall bear interest at
------------
the Adjusted ABR Rate. In no event shall the Swing Line Lender be required to
fund a Swing Line Loan if it would increase the total aggregate outstanding
Loans by Swing Line Lender hereunder plus its Percentage of Facility Later of
Credit Obligations to an amount in excess of its Commitment. Upon request of the
Swing Line Lender, each Lender irrevocably agrees to purchase its Percentage of
any Swing Line Loan made by the Swing Line Lender regardless of whether the
conditions for disbursement are satisfied at the time of such purchase,
including the existence of a Default hereunder, provided that no Lender shall be
--------
required to have the sum of its total outstanding Loans plus its Percentage of
Facility Letters of Credit be greater than its Commitment. Such purchase shall
take place on the date of the request by Swing Line Lender so long as such
request is made by noon (Chicago time), otherwise on the Business Day following
such request. All requests for purchase shall be in writing. From and after the
date it is so purchased, each such Loan shall be treated as a Loan made by the
purchasing Lender and not by the selling Lender for all purposes under this
Agreement, and shall no longer be considered a Swing Line Loan except that all
interest accruing on or attributable to such Loan for the period prior to the
date of such purchase shall be paid when due by the Borrower to the
Administrative Agent for the benefit of the Swing Line Lender and all such
amounts accruing on or attributable to such Loans for the period from and after
the date of such purchase shall be paid when due by the Borrower to the
Administrative Agent for the benefit of the purchasing Lender. If prior to
purchasing its Percentage in a Swing Line Loan one of the events described in
Section 8.7 or 8.8 shall have occurred and such event prevents the consummation
----------- ---
of the purchase contemplated by preceding provisions, each Lender will purchase
an undivided participating interest in the outstanding Swing Line Loan in an
amount equal to its Percentage of such Swing Line Loan From and after the date
of each Lender's purchase of its participating interest in a Swing Line Loan, if
the Swing Line Lender receives any payment on account thereof the Swing Line
Lender will distribute to such Lender its participating interest in such amount
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Lender's participating interest was outstanding and
funded); provided however that in the event that such payment was received by
-------- -------
the Swing Line Lender and is required to be returned to the Borrower, each
Lender will return to the Swing Line Lender any portion thereof previously
distributed by the Swing Line Lender to it. No Swing Line Loan shall be
outstanding for more than five (5) days at a time and Swing Line Loans shall not
be outstanding for more than a total often (10) days during any month.
2.15 Extension of Facility Termination Date. If the Borrower requests an
--------------------------------------
extension of the Facility Termination Date by written notice to the
Administrative Agent given no later than January 30, 2002, the Administrative
Agent shall promptly submit such request to the Lenders and, if 100% of the
Lenders approve such extension prior to March 31,2002, the Facility Termination
Date shall be extended to March 31, 2002 by written notice to the Borrower from
the Administrative Agent given at the direction of the Lenders.
2.16 Method of Payment. All payments of the Obligations hereunder shall be
-----------------
made, without setoff, deduction, or counterclaim, in immediately available funds
to the Administrative Agent at the Administrative Agent's address specified
pursuant to Article XIV or at any other Lending Installation of the
-----------
Administrative Agent specified in writing by the Administrative Agent to the
Borrower, by noon (local time) on the date when due and shall be applied by the
Administrative Agent among the Lenders in accordance with the class or type of
Obligation
21
being paid. Each payment delivered to the Administrative Agent for the account
of any Lender shall be delivered by the Administrative Agent to such Lender in
the same type of funds that the Administrative Agent received at its address
specified pursuant to Article XIV or at any Lending Installation specified in a
-----------
notice received by the Administrative Agent from such Lender promptly, which is
expected to be by the close of business on the same Business Day received by
Administrative Agent if received by noon (local time) but shall in any event not
be later than the next Business Day, provided that the Administrative Agent
--------
shall pay to such Lenders interest thereon, at the lesser of (i) the Federal
Funds Effective Rate and (ii) the rate of interest applicable to such Loans,
from the Business Day such funds are received by the Administrative Agent in
immediately available funds (provided, if such funds are not received by the
--------
Administrative Agent by noon (local time), such period shall commence on the
Business Day immediately following the day such funds are received) until such
funds are paid to such Lenders. The Administrative Agent is hereby authorized to
charge the account of the Borrower maintained with First Chicago for each
payment of principal interest and fees as it becomes due hereunder if not
otherwise timely made.
2.17 Notes: Telephonic Notices. Each Lender is hereby authorized to record
-------------------------
the principal amount of each of its Loans and each repayment on the schedule
attached to its Note, provided, however that the failure to so record shall not
-------- -------
affect the Borrower's obligations under such Note. Each Lender's books and
records, including without limitation. the information, if any, recorded by the
Lender on the Schedule attached to its Note, shall be deemed to be prima facia
----- -----
correct. The Borrower hereby authorizes the Lenders and the Administrative Agent
to extend, convert or continue Advances, effect selections of Types of Advances
and to transfer funds based on telephonic notices made by any person or persons
the Administrative Agent or any Lender in good faith believes to be acting on
behalf of the Borrower. The Borrower agrees to deliver promptly to the
Administrative Agent a written confirmation signed by an Authorized Officer of
each telephonic notice, if such confirmation is requested by the Administrative
Agent or any Lender. If the written confirmation differs in any maternal respect
from the action taken by the Administrative Agent and the Lenders, the records
of the Administrative Agent and the Lenders shall govern absent manifest error.
2.18 Interest Payment Dates: Interest and Fee Basis. Interest accrued on
----------------------------------------------
each Advance shall be payable on each Payment Date, commencing with the first
such date to occur after the date hereof, and at maturity, whether by
acceleration or otherwise. Interest accrued on each LIBOR Advance shall also be
payable on any date on which the LIBOR Advance is prepaid (provided that nothing
herein stall authorize a prepayment which is not otherwise permitted hereunder).
Interest and Commitment Fees shall be calculated for actual days elapsed on the
basis of a 360-day year; provided that interest on ABR Advances shall be based
on a 365 day year. Interest shall be payable for the day an Advance is made but
not for the day of any payment on the amount paid if payment is received prior
to noon (local time) at the place of payment. If any payment of principal of or
interest on an Advance shall become due on a day which is not a Business Day,
such payment shall be made on the next succeeding Business Day and, in the case
of a principal payment, such extension of time shall be included in computing
interest in connection with such payment.
2.19 Notifications of Advances. Interest Rates and Prepayments. Promptly
---------------------------------------------------------
after receipt thereof (but in no event later than one Business Day prior to the
proposed Borrowing Date for a ABR Advance or three Business Days prior to the
proposed Borrowing Date for a LIBOR
22
Advance), the Administrative Agent will notify each Lender of the contents of
each Borrowing Notice, Conversion/Continuation Notice, and repayment notice
received by it hereunder. The Administrative Agent will notify each Lender of
the interest rate applicable to each LIBOR Advance promptly upon determination
of such interest rate and will give each Lender prompt notice of each change in
the Alternate Base Rate.
2.20 Lending Installations. Each Lender may book its Loans at any Lending
---------------------
Installation selected by such Lender and may change its Lending Installation
from time to time. Each Lender shall use reasonable efforts to select a Lending
Installation that will minimize any payments by Borrower to such Lender that may
become due under Article IV. All terms of this Agreement shall apply to any such
Lending Installation and the Notes shall be deemed held by each Lender for the
benefit of such Lending Installation. Each Lender may, by written or telex
notice to the Administrative Agent and the Borrower, designate a Lending
Installation through which Loans will be made by it and for whose account Loan
payments are to be made.
2.21 Non-Receipt of Funds by the Administrative Agent. Unless the
------------------------------------------------
Borrower or a Lender, as the case may be, notices the Administrative Agent prior
to the date on which it is scheduled to make payment to the Administrative Agent
of (i) in the case of a Lender, the proceeds of a Loan or (ii) in the case of
the Borrower, a payment of principal, interest or fees to the Administrative
Agent for the account of the Lenders, that it does not intend to make such
payment, the Administrative Agent may assume that such payment has been made.
The Administrative Agent may, but shall not be obligated to, make the amount of
such payment available to the intended recipient in reliance upon such
assumption. If such Lender or the Borrower, as the case may be, has not in fact
made such payment to the Administrative Agent, the recipient of such payment
shall, on demand by the Administrative Agent, repay to the Administrative Agent
the amount so made available together with interest thereon in respect of each
day during the period commencing on the date such amount was so made available
by the Administrative Agent until the date the Administrative Agent recovers
such amount at a rate per annum equal to (i) in the case of payment by a Lender,
the Federal Funds Effective Rate for such day or (ii) in the case of payment by
the Borrower, the interest rate applicable to the relevant Loan.
2.22 Withholding Tax Exemption. At least five Business Pays prior to the
-------------------------
first date on which interest or fees are payable hereunder for the account of
any Lender, each Lender that is not incorporated under the laws of the United
States of America, or a state thereof, agrees that it will deliver to each of
the Borrower and the Administrative Agent two duly completed copies of United
States Internal Revenue Service Form 1001 or 4224 or any other required form,
certifying in either case that such Lender is entitled to receive payments under
this Agreement and the Notes without deduction or withholding of any United
States federal income taxes. Each Lender which so delivers a Form 1001 or 4224
or any other required form further undertakes to deliver to each of the Borrower
and the Administrative Agent two additional copies of such form (or a successor
form) on or before the date that such form expires (currently, three successive
calendar years for Form 1001 and one calendar year for Form 4224) or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent forms so delivered by it, and such amendments thereto or extensions or
renewals thereof as may be reasonably requested by the Borrower or the
Administrative Agent, in each case certifying that such Lender is entitled to
receive payments under this Agreement and the Notes without deduction or
withholding of any United States federal income taxes, unless an event
(including without limitation any change in
23
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender advises the Borrower and the
Administrative Agent that it is not capable of receiving payments without any
deduction or withholding of United States federal income tax.
2.23 Usury. This Agreement and each Note are subject to the express
-----
condition that at no time shall the Borrower be obligated or required to pay
interest on the principal balance of the Loan at a rate which could subject any
Lender (including the Swing Line Lender) to either civil or criminal liability
as a result of being in excess of the Maximum Legal Rate. If by the terms of
this Agreement or the Loan Documents, the Borrower is at any time required or
obligated to pay interest on the principal balance due hereunder at a rate in
excess of the Maximum Legal Rate, the interest rate or the Default Rate, as the
case may be, shall be deemed to be immediately reduced to the Maximum Legal Rate
and all previous payments in excess of the Maximum. Legal Rate shall be deemed
to have been payments in reduction of principal and not on account of the
interest due hereunder. All sums paid or agreed to be paid to a Lender for the
use, forbearance, or detention of the sums due under the Loan, shall, to the
extent permitted by applicable law, be amortized, prorated, allocated, and
spread throughout the full stated term of the Loan until payment in full so that
the rate or amount of interest on account of the Loan does not exceed the
Maximum Legal Rate of interest from time to time in effect and applicable to the
Loan for so long as the Loan is outstanding.
2.24 Applications of Moneys Received. All moneys collected or received by
-------------------------------
the Administrative Agent on account of the Facility directly or indirectly,
shall be applied in the following order of priority:
(i) to the payment of all reasonable costs incurred in the
collection of such moneys of which the Administrative Agent
shall have given notice to the Borrower;
(ii) to the reimbursement of any yield protection due to the Lenders
in accordance with Section 4.1;
-----------
(iii) to the payment of any fee due pursuant to Section 3.8(b) in
--------------
connection with the issuance of a Facility Letter of Credit to
the Issuing Bank, to the payment of the Commitment Fee to the
Lenders, if then due, in accordance with their Percentages and
to the payment of the Administrative Agent's Fee to the
Administrative Agent if then due;
(iv) (a) in case the entire unpaid principal of the Loan shall nor
have become due and payable, the whole amount received as
interest and Facility Letter of Credit Fee then due to the
Lenders (other than a Defaulting Lender) as their respective
Percentages appear (except to the extent there are Swing Line
Loans outstanding in which event the full amount of interest
attributable to the Swing Line Loans shall be payable to the
Swing Line Lender unless the Swing Line Lender shall be a
Defaulting Lender), together with the whole amount, if any,
received as principal first to the Swing Line
24
Lender, unless the Swing Line Lender shall be a Defaulting
Lender, to repay any outstanding Swing Line Loans and then to
the Lenders as their respective Funded Percentages appear. or
(b) in case the entire unpaid principal of the Loan shall have
become due and payable, as a result of a Default or otherwise,
to the payment of the whole amount then due and payable on the
Loan for principal, together with interest thereon at the
Default Rate or the interest rate, as applicable, to the Swing
Line Lender, unless the Swing Line Lender shall be a Defaulting
Lender, for all such amounts due in connection with Swing Line
Loans and then to the Lenders (other than a Defaulting Lender)
as their respective Funded Percentages appear until paid in
full and then to the Letter of Credit Collateral Account until
the full amount of Facility Letter of Credit Obligations is on
deposit therein; and
(v) to the payment of any sums due to each Defaulting Lender as
their respective Percentages appear (provided that
Administrative Agent shall have the right to set-off against
such sums any amounts due from such Defaulting Lender).
ARTICLE III
THE LETTER OF CREDIT SUBFACILITY
3.1. Obligations to Issue. Subject to the terms and conditions of this
--------------------
Agreement and in reliance upon the representations and warranties of the
Borrower and the General Partner herein set forth, the Issuing Bank hereby
agrees to issue for the account of Borrower, one or more Facility Letters of
Credit in accordance with this Article III, from time to time during the period
-----------
commencing on the Closing Date and ending on the Business Day prior to the
Facility Termination Date. Any Lender shall have the tight to decline to be the
Issuing Bank for a Facility Letter of Credit provided that if no other Lender
agrees to be the Issuing Bank then Administrative Agent shall agree to do so.
3.2. Types and Amounts. The Issuing Bank shall not have any obligation to:
-----------------
(i) issue any Facility Letter of Credit if the aggregate maximum
amount then available for drawing under Letters of Credit
issued by such Issuing Bank, after giving effect to the
Facility Letter of Credit requested hereunder, shall exceed any
limit imposed by law or regulation upon such Issuing Bank;
(ii) issue any Facility Letter of Credit i, after giving effect
thereto, the Facility Letter of Credit Obligations would exceed
$ 10,000,000 or the Allocated Facility Amount would exceed the
Aggregate Commitment;
(iii) issue any Facility Letter of Credit having an expiration date,
or containing automatic extension provisions to extend such
date, to a date which is after the Facility Termination Date;
or
25
(iv) issue any Facility Letter of Credit having an expiration date,
or containing automatic extension provisions to extend such
date, to a date which is more than fifteen (15) months after
the date of its issuance.
3.3 Conditions. In addition to being subject to the satisfaction of the
----------
conditions contained in Section 5.2 hereof, the obligation of the Issuing Bank
-----------
to issue any Facility Letter of Credit is subject to the satisfaction in full of
the following conditions:
(i) the Borrower shall have delivered to the Issuing Bank at such
times and in such manner as the Issuing Bank may reasonably
prescribe such documents and materials as may be reasonably
required pursuant to the terms of the proposed Facility Letter
of Credit (it being understood that if any inconsistency exists
between such documents and the Loan Documents, the terms of the
Loan Documents shall control) and the proposed Facility Letter
of Credit shall be reasonably satisfactory to the Issuing Bank
as to from and content;
(ii) as of the date of issuance, no order, judgment or decree of any
court, arbitrator or governmental authority shall purport by
its terms to enjoin or restrain the Issuing Bank from issuing
the requested Facility Letter of Credit and no law, rule or
regulation applicable to the Issuing Bank and no request or
directive (whether or not having the force of law) from any
governmental authority with jurisdiction over the Issuing Bank
shall prohibit or request that the Issuing Bank refrain from
the issuance of Letters of Credit generally or the issuance of
the requested Facility Later or Credit in particular; and
(iii) there shall not exist any Default or Unmatured Default.
3.4 Procedure of Issuance of Facility Letters of Credit.
---------------------------------------------------
(a) Borrower shall give the Issuing Bank and the Administrative
Agent at least five (5) Business Days' prior written notice of any
requested issuance of a Facility Letter of Credit under this Agreement (a
"Letter of Credit Request") (except that. in lieu of such written notice,
------------------------
the Borrower may give the Issuing Bank and the Administrative Agent
telephonic notice of such request if confirmed in writing by delivery to
the Issuing Bank and the Administrative Agent (i) immediately (A) of a
telecopy of the written notice required hereunder which has been signed by
an authorized officer, or (B) of a telex containing all information
required to be contained in such written notice and (ii) promptly (but in
no event later than the requested date of issuance) of the written notice
required hereunder containing the original signature. of an authorized
officer); such notice shall specify:
(1) the stated amount of the Facility Letter of Credit requested
(which stated amount shall not be less than $50,000 without
the approval of the Issuing Bank);
26
(2) the effective date (which day shall be a Business Day) of issuance of
such requested Facility Letter of Credit (the "Issuance Date")
-------------
(3) the date on which such requested Facility Letter of Credit is to expire
(which date shall be a Business Day and shall in no event be later than
the earlier of fifteen months after the Issuance Date and the Facility
Termination Date):
(4) the purpose for which such Facility Letter of Credit is to be issued;
and
(5) the Person for whose benefit the requested Facility Letter of Credit is
to be issued.
At the time such request is made, the Borrower shall also provide the
Administrative Agent and the Issuing Bank with a copy of the form of the
Facility Letter of Credit that the Borrower is requesting be issued, which shall
be subject to the approval of the Issuing Bank and Administrative Agent. Such
notice, to be effective, must be received by such Issuing Bank and the
Administrative Agent not later than 2:00 p.m. (Chicago time) on the last
Business Day on which notice can be given under this Section 3.4(a)
--------------
Administrative Agent shall promptly give a copy of the Letter of Credit Request
to the other Lenders.
(b) Subject to the terms and conditions of this Article III and
-----------
provided that the applicable conditions set forth in Section 4.2 hereof
-----------
have been satisfied, such Issuing Bank shall on the Issuance Date, issue a
Facility Letter of Credit on behalf of the Borrower in accordance with the
Letter of Credit Request and the Issuing Bank's usual and customary
business practices unless the Issuing Bank has actually received (i)
written notice from the Borrower specifically revoking the Letter of
Credit Request with respect to such Facility Letter of Credit, (ii)
written notice from a Lender, which complies with the provisions of
Section 3.6(a), or (iii) written or telephonic notice from the
-------------
Administrative Agent stating that the issuance of such Facility Letter of
Credit would violate Section 3.2.
-----------
(c) The Issuing Bank shall give the Administrative Agent and the
Borrower written or telex notice, or telephonic notice confirmed promptly
thereafter in writing, of the issuance of a Facility Letter of Credit (the
"Issuance Notice") and Administrative Agent shall promptly give a copy of
---------------
the Issuance Notice to the other Lenders.
(d) The Issuing Bank shall not extend or amend any Facility Letter
of Credit unless the requirements of this Section 3.4 are met as though a
-----------
new Facility Letter of Credit was being requested and issued.
3.5 Reimbursement Obligations; Duties of Issuing Bank.
-------------------------------------------------
(a) The Issuing Bank shall promptly notify the Borrower and the
Administrative Agent of any draw under a Facility Letter of Credit, and
the Administrative Agent shall promptly notify the other Lenders that such
draw has occurred. any such draw shall constitute an Advance of the
Facility in the amount of the Reimbursement Obligation with respect to
such Facility Letter of Credit and shall bear interest from the date of
the relevant drawing(s) under the pertinent Facility Letter of Credit at a
rate selected by Borrower in accordance with Section 2.10 hereof; provided
------------
27
that if a Default or an Unmatured Default involving the payment of money
exists at the time of any such drawing(s), then the Borrower shall
reimburse the Issuing Bank for drawings under a Facility Letter of Credit
issued by the Issuing Bank no lacer than the next succeeding Business Day
after the payment by the Issuing Bank and until repaid such Reimbursement
Obligation shall bear interest from the date funded at the Default Rate.
(b) Any action taken or omitted to be taken by the Issuing Bank
under or in connection with any Facility Loner of Credit, if taken or
omitted in the absence of willful misconduct or gross negligence, shall
not put the Issuing Bank under any resulting liability to Borrower or any
Lender or, provided that such issuing Bank has complied with the
procedures specified in Section 3.4 and such Lender has not given a notice
-----------
contemplated by Section 3.6(a) that continues in full force and effect,
--------------
relieve a Lender of its obligations hereunder to the Issuing Bank. In
determining whether to pay under any Facility Letter of Credit, the
Issuing Bank shall have no obligation relative to the Lenders other than
to confirm that any documents requited to be delivered under such Letter
of Credit appear to have been delivered in compliance, and that they
appear to comply on their face, with the requirements of such Letter of
Credit.
3.6 Participation
-------------
(a) Immediately upon issuance by the Issuing Bank of any Facility
Letter of Credit in accordance with the procedures set forth in Section
-------
3.4 each Lender shall be deemed to have irrevocably and unconditionally
---
purchased and received from the Issuing Bank, without recourse,
representation or warranty, an undivided interest and participation equal
to such Lender's Percentage in such Facility Letter of Credit (including,
without limitation, all obligations of the Borrower with respect thereto)
and any security therefor or guaranty pertaining thereto; provided that a
--------
Letter of Credit issued by the Issuing Bank shall not be deemed to be a
Facility Letter of Credit for purposes of this Section 3.6 if the Issuing
-----------
Bank shall have received written notice from any Lender on or before the
Business Day prior to the date of its issuance of such Letter of Credit
that one or more of the conditions contained in Section 5.2 is nor then
-----------
satisfied, and in the event the Issuing Bank receives such a notice it
shall have no further obligation to issue any Facility Letter of Credit
until such notice is withdrawn by that Lender or the Issuing Bank receives
a notice from the Administrative Agent that such condition has been
effectively waived in accordance with the provisions of this Agreement.
Each Lender's obligation to make further Loans to the Borrower (other than
any payments such Lender is required to make under subparagraph (b) below)
or issue any letters of credit on behalf of Borrower shall be reduced by
such Lender's pro rata share of each Facility Letter of Credit
outstanding.
(b) In the event that the Issuing Bank makes any payment under any
Facility Letter of Credit and the Borrower shall not have repaid such
amount to the Issuing Bank pursuant to Section 3.7 hereof, the Issuing
-----------
Bank shall promptly notify the Administrative Agent, which shall promptly
notify each Lender of such failure, and each Lender shall promptly and
unconditionally pay to the Administrative Agent for the account of the
Issuing Bank the amount of such Lender's Percentage of the unreimbursed
amount of such payment, and the Administrative Agent shall promptly pay
such amount to the
28
Issuing Bank. The failure of any Lender to make available to the
Administrative Agent for the account of any Issuing Bank its Percentage of
the unreimbursed amount of any such payment shall not relieve any other
Lender of its obligation hereunder to make available to the Administrative
Agent for the account of such Issuing Bank its Percentage of the
unreimbursed amount of any payment on the date such payment is to be made,
but no Lender shall be responsible for the failure of any other Lender to
make available to the Administrative Agent its Percentage of the
unreimbursed amount of any payment on the date such payment is to be made.
Any Lender which fails to make any payment required pursuant to this
Section 3.6(b) shall be deemed to be a Defaulting Lender hereunder.
--------------
(c) Whenever the Issuing Bank receives a payment on account of a
Reimbursement Obligation, including any interest thereon, the Issuing Bank
shall promptly pay to the Administrative Agent and the Administrative
Agent shall promptly pay to each Lender which has funded its participating
interest therein, in immediately available funds, an amount equal to such
Lender's Percentage thereof.
(d) Upon the request of the Administrative Agent or any Lender, an
Issuing Bank shall furnish to such Administrative Agent or Lender copies
of any Facility Letter of Credit to which that Issuing Bank is party and
such other documentation as may reasonably be requested by the
Administrative Agent or Lender.
(e) The obligations of a Lender to make payments to the
Administrative Agent for the account of each Issuing Bank with respect to
a Facility Letter of Credit shall be absolute, unconditional and
irrevocable, not subject to any counterclaim, set-off, qualification or
exception whatsoever other than a failure of any such Issuing Bank to
comply with the terms of this Agreement relating to the issuance of such
Facility Letter of Credit and shall be made in accordance with the terms
and conditions of this Agreement under all circumstances.
3.7 Payment of Reimbursement Obligations.
------------------------------------
(a) The Borrower agrees to pay to each Issuing Bank the amount of
all Reimbursement Obligations, interest and other amounts payable to such
Issuing Bank under or in connection with any Facility Letter of Credit
when due in accordance with Section 3.5(a) above, irrespective of any
--------------
claim, set-off, defense or other right which the Borrower may have at any
time against any Issuing Bank or any other Person, under all
circumstances, including without limitation any of the following
circumstances:
(i) any lack of validity or enforceability of this Agreement or
any of the other Loan Documents;
(ii) the existence of any claim, setoff, defense or other right which
the Borrower may have at any time against a beneficiary named in a
Facility Letter of Credit or any transferee of any Facility Letter of
Credit (or any Person for whom any such transferee may be acting),
the Administrative Agent, the Issuing Bank, any Lender, or any other
Person, whether in connection with this Agreement, any Facility
Letter of Credit, the transactions contemplated herein or any
unrelated transactions (including
29
any underlying transactions between the Borrower and the beneficiary
named in any Facility Letter of Credit);
(iii) any draft, certificate or any other document presented under the
Facility Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect of any statement therein being untrue
or inaccurate in any respect;
(iv) the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Loan Documents; or
(v) the occurrence of any Default or Unmatured Default.
(b) In the event any payment by the Borrower received by the Issuing
Bank with respect to a Facility Letter of Credit and distributed by the
Administrative Agent to the Lenders on account of their participations is
thereafter set aside, avoided or recovered from the Issuing Bank in
connection with any receivership, liquidation, reorganization or
bankruptcy proceeding, each Lender which received such distribution shall,
upon demand by the Issuing Bank, contribute such Lender's Percentage of
the amount set aside, avoided or recovered together wit interest at the
rate required to be paid by the Issuing Bank upon the amount required to
be repaid by the Issuing Bank.
3.8 Compensation for Facility Letters of Credit.
-------------------------------------------
(a) The Borrower shall pay to the Administrative Agent, for the
ratable account of the Lenders, based upon the Lenders' respective
Percentages, a per annum fee (the "Facility Letter of Credit Fee") with
-----------------------------
respect to each Facility Letter of Credit that is equal to the LIBOR
Applicable Margin in effect from time to time. The Facility Letter of
Credit Fee relating to any Facility Letter of Credit shall be due and
payable monthly in arrears in equal installments on the last Business Day
of each month following the issuance or extension, as applicable, of such
Facility Letter of Credit and, to the extent any such fees are then due
and unpaid, on the Facility Termination Date. The Administrative Agent
shall promptly remit such Facility Letter of Credit Fees, when paid, to
the other Lenders in accordance with their Percentages thereof
(b) The Issuing Bank also shall have the right to receive solely for
its own account an issuance fee of 0.15% of the face amount of each
Facility Letter of Credit, payable by the Borrower on the Issuance Date
for each such Facility Letter of Credit. The Issuing Bank shall also be
entitled to receive its reasonable out-of-pocket costs and the Issuing
Bank's standard charges of issuing, amending and servicing Facility
Letters of Credit and processing draws thereunder.
3.9 Letter of Credit Collateral Account. The Borrower hereby agrees that it
-----------------------------------
will, until the Facility Termination Date, maintain a special collateral account
(the "Letter Credit Collateral Account") at the Administrative Agent's office at
--------------------------------
the address specified pursuant to Article XIV, in the name of the Borrower but
-----------
under the sole dominion and control of the Administrative Agent, for the benefit
of the Lenders, and in which the Borrower shall have no interest other than as
set forth in Section 9.1. Such Letter of Credit Collateral Account shall be
-----------
funded to the extent required by Section 9.1. In addition to the foregoing, the
-----------
Borrower
30
hereby grants to the Administrative Agent, for the benefit of the Lenders, a
properly perfected security interest in and to the Letter of Credit Collateral
Account, any funds that may hereafter be on deposit in such account and the
proceeds thereof.
ARTICLE IV
CHANGE IN CIRCUMSTANCES
4.1 Yield Protection. If after the date hereof there is any change in any
----------------
law or any governmental or quasi-governmental rule, regulation, policy,
guideline or directive (whether or not having the force of law), or any
interpretation thereof, or the compliance of any Lender therewith and such law,
rule, regulation, policy, guideline, directive or interpretation, as changed,
(i) subjects any Lender or any applicable Lending Installation to any
tax, duty, charge or withholding on or from payments due from the
Borrower (excluding federal, state and local income or franchise
taxes on the overall income of any Lender or applicable Lending
Installation,) or changes the basis of taxation of payments to any
Lender in respect of its Loans, Facility Letters of Credit or other
amounts due it hereunder, or
(ii) imposes or increases or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against
assets of, deposits with or for the account of, or credit extended
by, any Lender or any applicable Lending Installation (other than
reserves and assessments taken into account in determining the
interest rare applicable to LIBOR Advances), or
(iii) imposes any other condition the result of which is to increase the
cost to any Lender or any applicable Lending Installation of making,
funding or maintaining loans or reduces any amount receivable by any
Lender or any applicable Lending Installation in connection with
loans, or requires any Lender or any applicable Lending Installation
to make any payment calculated by reference to the amount of loans
held, Letters of Credit issued or participated in or interest
received by it, by an amount deemed material by such Lender,
then, within 15 days of demand by such Lender, the Borrower shall pay
such Lender that portion of such increased expense incurred or reduction
in an amount received which such Lender determines is attributable to
making, funding and maintaining its Loans and its Commitment.
4.2 Changes in Capital Adequacy Regulations. If a Lender determines the
---------------------------------------
amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such Lender or any corporation controlling such Lender
is increased as a result of a Change (as hereinafter defined), then, within
fifteen days of demand by such Lender, the Borrower shall pay such Lender the
amount necessary to compensate for any shortfall in the late of return on the
portion on such increased capital which such Lender determines is attributable
to this Agreement, its Loans, its interest in the Facility Letters of Credit, or
its obligation to make Loans hereunder or participate in or issue Facility
Letters of Credit (after taking into account such
31
Lender's policies as to capital adequacy). "Change" means (i) any change after
------
the date of this Agreement in the Risk-Based Capital Guidelines or (ii) any
adoption of or change in any other law, governmental or quasi-governmental rule,
regulation, policy, guideline, interpretation, or directive (whether or not
having the force of law) after the date of this Agreement which affects the
amount of capital required or expected to be maintained by any Lender or any
Lending Installation or any corporation controlling any Lender. "Risk-Based
----------
Capital Guidelines" means (i) the risk-based capital guidelines in effect in the
------------------
United States on the date of this Agreement, including transition rules, and
(ii) the corresponding capital regulations promulgated by regulatory authorities
outside the United States implementing the July 1988 report of the Basle
Committee on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital Standards,"
including transition rules, and any amendments to such regulations adopted prior
to the date of this Agreement.
4.3 Availability of LIBOR Advances. If any Lender determines that
------------------------------
maintenance of any of its LIBOR Loans at a suitable Lending Installation would
violate any applicable law, rule, regulation or directive, whether or not having
the force of law, the Administrative Agent shall suspend the availability of
LIBOR Advances and require any LIBOR Advances to be repaid; or if the Required
Lenders determine that (i) deposits of a type or maturity appropriate to match
fund LIBOR Advances are not available, the Administrative Agent shall suspend
the availability of LIBOR Advances with respect to any LIBOR Advances made after
the date of any such determination, or (ii) an interest rate applicable to a
LIBOR. Advance does not accurately reflect the cost of making a LIBOR Advance,
then, if for any reason whatsoever the provisions of Section 4.1. are
inapplicable, the Administrative Agent shall suspend the availability of LIBOR
Advances with respect to any LIBOR Advances made after the date of any such
determination.
4.4 Funding Indemnification. If any payment of a LIBOR Advance occurs on a
-----------------------
dare which is not the last day of the applicable Interest Period, whether
because of acceleration, prepayment or otherwise, or a LIBOR Advance is not made
on the date specified by the Borrower for any reason other than default by the
Lenders, the Borrower will indemnify each Lender for any loss or cost incurred
by it resulting therefrom, including, without limitation, any loss or cost in
liquidating or employing deposits acquired to fund or maintain the LIBOR
Advance.
4.5 Lender Statements: Survival of Indemnity. To the extent reasonably
----------------------------------------
possible, each Lender shall designate an alternate Lending Installation with
respect to its LIBOR Loans to reduce any liability of the Borrower to such
Lender under Sections 4.1. and 4.2 or to avoid the unavailability of a Type of a
------------ ---
LIBOR Advance under Section 4.3, so long as such designation is not
-----------
disadvantageous to such Lender. Each Lender shall deliver a written statement of
such Lender as to the amount due, if any, under Sections 4.1, 4.2 or 4.4;
------------ --- ---
provided, however, that the Borrower shall not be obligated to compensate any
-------- -------
Lender for any amounts which accrue prior to a date which is 180 days before
such notice is given. Such written statement shall set forth in reasonable
detail the calculations upon which such Lender determined such amount and shall
be final, conclusive and binding on the Borrower in the absence of manifest
error. Determination of amounts payable under such Sections in connection wit a
LIBOR Loan shall be calculated as though each Lender funded its LIBOR Loan
through the purchase of a deposit of the type and maturity corresponding to the
deposit used as a reference in determining the LIBOR Rate applicable to such
Loan, whether in fact that is the ease or nor. Unless otherwise provided herein,
the amount specified in the written statement shall be payable within 10 days
after receipt
32
by the Borrower of the written statement. The obligations of the Borrower under
Sections 4.1, 4.2 and 4.4 shall survive payment of the Obligations and
------------ --- ---
termination of this Agreement.
4.6 Substitutions of Lenders. Upon the receipt by the Borrower from any
------------------------
Lender (an "Affected Lender") of a claim for compensation under any of Sections
--------------- --------
4.1 or 4.2, or upon the inability of a Lender to make LIBOR Advances pursuant to
--- ---
Section 4.3, in either case, based upon circumstances not generally applicable
-----------
to all Lenders the Borrower may: (i) request one or more of the other Lenders to
acquire and assume all or part of such Affected Lender's Loans and Commitment
(provided that no Lender will be required to increase its Commitment); or (ii)
designate a replacement bank or financial institution (a "Replacement Lender")
to acquire and assume all or a ratable part of all of such Affected Lender's
Loans and Commitments. Any such designation of a Replacement Lender under clause
(ii) shall be subject to the prior written consent of the Administrative Agent,
not to be unreasonably withheld.
ARTICLE V
CONDITIONS PRECEDENT
5.1 Effective Date. This Agreement shall not become effective, and the
--------------
Lenders shall not be required to make the initial Advance hereunder unless (a)
the Borrower shall have paid all fees due and payable to the Lenders and the
Administrative Agent hereunder, and (b) the Borrower shall have furnished to the
Administrative Agent, in form and substance satisfactory to the Lenders and
their counsel and with sufficient copies for the Lenders, the following:
(i) The duly executed originals of the Loan Documents, including the
Notes, payable to the order of each of the Lenders, the Guaranty and
this Agreement;
(ii) Certified copies of the articles of incorporation of the General
Partner and AGC and the certificate of limited partnership of the
Borrower, both with all amendments and certified by the appropriate
governmental officer of the State of Maryland, the State of
Delaware, or other jurisdiction, as applicable, as of a recent date;
(iii) Certificates of good standing for the General Partner, AGC and the
Borrower, certified by the appropriate governmental officer of the
State of Maryland, State of Delaware, or other jurisdiction, as
applicable, and foreign qualification certificates for the General
Partner and the Borrower, certified by the appropriate governmental
officer, for each jurisdiction listed on Schedule 4;
(iv) Copies, certified by an officer of the General Partner, of (l) its
by-laws, together with all amendments thereto and (2) the
Partnership Agreement of the Borrower, together with all amendments
thereto;
(v) An incumbency certificate, executed by an officer of the General
Partner, which shall identity by name and title and bear the
signature of the Persons authorized to sign the Loan Documents and
to make borrowings hereunder on behalf of the General Partner and
the Borrower, upon which
33
certificate the Administrative Agent and the Lenders shall be
entitled to rely until informed of any change in writing by the
Borrower;
(vi) Copies, certified by the Secretary or Assistant Secretary, of the
General Partner's Board of Directors' resolutions authorizing the
Advances provided for herein and the execution, delivery and
performance of the Loan Documents to be executed and delivered by
the General Partner and the Borrower hereunder,
(vii) A written opinion of the General Partner's and the Borrower's
counsel, addressed to the Lenders in substantially the form of
Exhibit C hereto;
---------
(viii) A certificate, signed by an officer of the General Partner on
behalf of the Borrower and for itself stating that on the initial
Borrowing Date no Default or Unmatured Default has occurred and is
continuing and that all representations and warranties of the
General Partner and the Borrower are true and correct as of the
initial Borrowing Date;
(ix) The most recent financial statements of AGC, the General Partner
and the Borrower and a certificate from an officer of the such
entity that no material adverse change in such entity's financial
condition has occurred since the date of such statements;
(x) UCC financing statement, judgment, and tax lien searches with
respect to the General Partner and the Borrower from the State of
Maryland, the State of Delaware (with respect to the Borrower only)
and the State of California;
(xi) A certificate from the Borrower's principal financial officer or
principal accounting officer regarding the Unencumbered Assets
including such calculations as may be necessary to determine the
Borrower's compliance with the covenant set forth in Section
-------
7.20(iv) herein;
--------
(xii) A schedule detailing the economic terms of each Approved Operating
Lease, certified as true and correct by the General Partner,
together with an estoppel certificate from AGC with respect thereto
in a form satisfactory to the Administrative Agent, which
certificate shall also confirm that AGC is not then in default
under any material agreements;
(xiii) Written money transfer instructions, in substantially the form of
Exhibit D hereto, addressed to the Administrative Agent and signed
---------
by an Authorized Officer, together with such other related money
transfer authorizations as the Administrative Agent may have
reasonably requested,
(xiv) Evidence thats all panics whose consent is required for Borrower or
General Partner to execute the Loan Documents have provided such
consents;
34
(xv) Evidence that the Acquisition has been completed in accordance with
the pertinent documentation regarding the Acquisition heretofore
furnished to the Lenders; and
(xvi) Such other documents as the Agent or the Arrangers or their counsel
may have reasonably requested, the form and substance of which
documents shall be acceptable to the parties and their respective
counsel.
5.2 Each Advance. The Lenders shall not be required to make any Advance
------------
(including Swing Line Loans) other than an Advance or Swing Line Loan that,
after giving effect thereto and to the application of the proceeds thereof, does
not increase the aggregate amount of outstanding Advances (including Swing Line
Loans), unless on the applicable Borrowing Date:
(i) There exists no Default or Unmatured Default; and
(ii) The representations and warranties contained in Article VI are true
----------
and correct as of such Borrowing Date with respect to the General
Partner, the Borrower and to any Subsidiary in existence (as
applicable) on such Borrowing Date, except to the extent any such
representation or warranty is stated to relate solely to an earlier
date, in which case such representation or warranty shall be true
and correct on and as of such earlier date.
Each Borrowing Notice with respect to each such Advance (including Swing
Line Loans) shall constitute a representation and warranty by the Borrower that
the conditions contained in Sections 5.2(i) and (ii) have been satisfied. At the
--------------- ----
request of the Required Lenders Borrower shall also furnish a duly completed
compliance certificate in substantially the form of Exhibit E hereto (including
---------
all schedules or exhibits) as a condition (which may be satisfied as a condition
subsequent provided it is delivered within the time set forth below) to making
an Advance (including Swing Line Loans); provided that the Borrower shall not be
required to provide such compliance certificate sooner than five (5) business
days following the request therefor and provided further that the calculations
contained therein shall be based on the most recent quarterly information
available.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
The General Partner and the Borrower each respectively (unless otherwise
noted) represents and warrants to the Lenders that:
6.1 Existence. General Partner is a corporation duly organized, validly
---------
existing and in good standing under the laws of the State of Maryland, with its
principal place of business in Santa Monica, California and is duly qualified as
a foreign corporation, properly licensed (if required), in good standing and has
all requisite authority to conduct its business in each jurisdiction in which
its business is conducted, except where the failure to be so qualified or in
good standing would not have a Material Adverse Effect. The Borrower is a
limited partnership duly organized, validly existing and in good standing under
the laws of the State of Delaware, with its principal place of business in Santa
Monica, California and is duly qualified as a foreign
35
limited partnership, properly licensed (if required), in good standing and has
all requisite authority to conduct its business in each jurisdiction in which
its business is conducted, except where the failure to be so qualified or in
good standing would not have a Material Adverse Effect. Each of the Subsidiaries
of the General Partner and the Borrower is duly organized, validly existing and
in good standing under the laws of its jurisdiction of organization and has all
requisite authority to conduct its business in each jurisdiction in which its
business is conducted, except where the failure to be so qualified or in good
standing would not have a Material Adverse Effect.
6.2 Authorization and Validity. It has the power and authority and legal
--------------------------
right to execute and deliver the Loan Documents to which it is a party and to
perform its obligations thereunder. The execution and delivery by it of the Loan
Documents to which it is a party and the performance of its obligations
thereunder have been duly authorized by proper proceedings, and the Loan
Documents to which it is a party constitute legal, valid and binding obligations
of, respectively, the General Partner or the Borrower enforceable against such
entity in accordance with their terms, except as enforceability may be limited
by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally and general principles of equity.
6.3 No Conflict; Government Consent. Neither the execution and delivery by
-------------------------------
it of the Loan Documents to which it is a party, nor the consummation of the
transactions therein contemplated, nor compliance with the provisions thereof
will violate any law, rule, regulation, order, writ, judgment, injunction,
decree or award binding on, respectively, the General Partner or the Borrower
or any of such entity's Subsidiaries or such entity's or any Subsidiary's
articles of incorporation, by-laws, certificate of limited partnership or
partnership agreement or the provisions of any indenture, instrument or
agreement to which such entity or any of its Subsidiaries is a party or is
subject, or by which it, or its Property, is bound, or conflict with or
constitute a default thereunder in any manner that could be reasonably expected
to have a Material Adverse Effect, or result in the creation or imposition of
any Lien in, of or on the Property of such entity or a Subsidiary pursuant to
the terms of any such indenture, instrument or agreement. No order, consent,
approval, license, authorization, or validation of, or filing, recording or
registration with, or exemption by, any governmental or public body or
authority, or any subdivision thereof, is required to authorize, or is required
in connection with the execution, delivery and performance of, or the legality,
validity, binding effect or enforceability of, any of the Loan Documents.
6.4 Financial Statements; Material Adverse Change. The December 31, 1998
---------------------------------------------
consolidated financial statements of the General Partner, the Borrower and their
Subsidiaries heretofore delivered to the Lenders were prepared in accordance
with GAAP in effect on the date such statements were prepared and fairly present
the consolidated financial condition and operations of the General Partner, the
Borrower and their Subsidiaries at such date and the consolidated results of
their operations for the period then ended. Since December 31, 1998, there has
been no change in the business, Property, prospects, condition (financial or
otherwise) or results of operations of the General Partner, the Borrower and
their Subsidiaries which could reasonably be expected to have a Material Adverse
Effect.
6.5 Taxes. It and its Subsidiaries have filed all United States federal
-----
tax returns and all other material tax returns which are required to be filed
and have paid all taxes due pursuant to said returns or pursuant to any
assessment received by, respectively, the General Partner or the
36
Borrower or any of its Subsidiaries except such taxes, if any, as are being
contested in good faith and as to which adequate reserves have been provided. No
tax liens have been filed and no claims are being asserted with respect to any
such taxes (other than Permitted Liens). The charges, accruals and reserves on
the books of the General Partner, the Borrower and their respective Subsidiaries
in respect of my taxes or other governmental charges are adequate.
6.6 Litigation and Guarantee Obligations. There is no litigation,
------------------------------------
arbitration, governmental investigation, proceeding or inquiry pending or, to
the knowledge of any of its officers, threatened against or affecting the
General Partner, the Borrower or any of their Subsidiaries which could
reasonably be expected to have a Material Adverse Effect. It has no material
contingent obligations not provided for or disclosed in the financial statements
referred to in Section 7.1 other than contingent obligations incurred since the
date of such financial statements which are not prohibited hereunder.
6.7 Subsidiaries. Schedule I hereto contains an accurate list of all of
------------
the presently existing Subsidiaries of such entity, setting forth their
respective jurisdictions of incorporation and the percentage of their respective
capital stock owned, as of the date hereof, by it or its Subsidiaries. All of
the issued and outstanding shares of capital stock of such Subsidiaries have
been duly authorized and issued and are fully paid and non-assessable.
6.8 ERISA. The Unfunded Liabilities of all Single Employer Plans do not in
-----
the aggregate exceed $1,000,000. Neither it nor any other member of the
Controlled Group has incurred, or is reasonably expected to incur, any
withdrawal liability to Multiemployer Plans in excess of $250,000 in the
aggregate. Each Single Employer Plan complies in all material respects with all
applicable requirements of law and regulations, no Reportable Event has occurred
with respect to any Single Employer Plan, neither it nor any other members of
the Controlled Group has withdrawn from any Plan or initiated steps to do so,
and no steps have been taken to reorganize or terminate any Single Employer
Plan.
6.9 Accuracy of Information. All factual information heretofore or
-----------------------
contemporaneously furnished by or on behalf of such entity or any of its
Subsidiaries to the Administrative Agent or any Lender for purposes of or in
connection with this Agreement or any transaction contemplated hereby is, and
all other such factual information hereafter furnished by or on behalf of such
entity or any of its Subsidiaries to the Administrative Agent or any Lender will
be, true and accurate in all material respects (taken as a whole) on the date
as of which such information is dated or certified and not incomplete by
omitting to state any material fact necessary to make such information (taken as
a whole) not materially misleading at such time.
6.10 Margin Stock. It does not hold any margin stock (as defined in
------------
Regulation U), nor is it engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying margin stock.
6.11 Material Agreements. Neither it nor any Subsidiary is a party to any
-------------------
agreement or instrument or subject to any charter or other corporate restriction
which could reasonably be expected to have a Material Adverse Effect. Neither it
nor any Subsidiary is in default in the performance, observance or fulfillment
of any of the obligations, covenants or conditions contained in (i) any
agreement to which it is a party, which default could reasonably be expected to
have a Material Adverse Effect or (ii) any agreement or instrument evidencing or
governing Indebtedness, which in each case would constitute a Default hereunder.
37
6.12 Compliance with Laws. It and its Subsidiaries have complied, to the
--------------------
best of their knowledge, with all applicable statutes, rules, regulations,
orders and restrictions of any domestic or foreign government or any
instrumentality or agency thereof, having jurisdiction over the conduct of their
respective businesses or the ownership of their respective Property, except for
any non-compliance which could not reasonably be expected to have a Material
Adverse Effect. Neither it nor any Subsidiary has received any notice to the
effect that its operations are not in material compliance with any of the
requirements of applicable federal, state and local environmental, health and
safety statutes and regulations or the subject of any federal or state
investigation evaluating whether any remedial action is needed to respond to a
release of any toxic or hazardous waste or substance into the environment, which
non-compliance or remedial action could reasonably be expected to have a
Material Adverse Effect.
6.13 Ownership of Properties. On the date of this Agreement, it and its
-----------------------
Subsidiaries will have good title, free of all Liens other than those permitted
by Section 7.15, to all of the Property and assets reflected in the financial
------------
statements as owned by it.
6.14 Investment Company Act. Neither it nor any Subsidiary is an
----------------------
"investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
6.15 Public Utility Holding Company Act. Neither it nor any Subsidiary is
----------------------------------
a "holding company" or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company", within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
6.16 Solvency. (i) Immediately after the Closing Date and immediately
--------
following the making of each Loan and after giving effect to the application of
the proceeds of such Loans, (a) the fair value of the assets of the General
Partner, the Borrower and their Subsidiaries on a consolidated basis, at a fair
valuation, will exceed the debts and liabilities, subordinated, contingent or
otherwise, of the General Partner, the Borrower and their Subsidiaries on a
consolidated basis; (b) the present fair saleable value of the Property of the
General Partner, the Borrower and their Subsidiaries on a consolidated basis
will be greater than the amount that will be required to pay the probable
liability of the General Partner, the Borrower and their Subsidiaries on a
consolidated basis on their debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities become absolute and
matured; (c) the General Partner, the Borrower and their Subsidiaries on a
consolidated basis will be able to pay their debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured; and (d) the General Partner, the Borrower and their
Subsidiaries on a consolidated basis will not have unreasonably small capital
with which to conduct the businesses in which they are engaged as such
businesses are now conducted and are proposed to be conducted after the date
hereof.
(ii) It does not intend to, or to permit any of its Subsidiaries to, and
does not believe that it or any of its Subsidiaries will, incur debts
beyond its ability to pay such debts as they mature, taking into
account the timing of and amounts of cash to be received by it or any
such Subsidiary and the timing of the amounts of cash to be payable
on or in respect of its Indebtedness or the Indebtedness of any such
Subsidiary.
38
6.17 Insurance. It and its Subsidiaries carry, or cause a tenant under a
---------
lease of a golf course property to carry (with it or its Subsidiaries, as
appropriate, named as an additional insured), insurance on their Projects with
financially sound and reputable insurance companies. in such amounts, with such
deductibles and covering such risks as are, to the best of its knowledge,
customarily carried by companies engaged in similar businesses and owning
similar projects in localities where it and its Subsidiaries operate, including,
without limitation:
(i) Property and casualty insurance (including coverage for flood and
other water damage for any improvements at any Project located
within a 100-year flood plain) in the amount of the replacement
cost of the improvements at such Project; and
(ii) Comprehensive general liability insurance in the amount of
$20,000,000 per occurrence.
6.18 REIT Status. The General Partner is in good standing on the New York
-----------
Stock Exchange, is qualified as a real estate investment trust and currently is
in compliance with all applicable provisions of the Code.
6.19 Environmental Matters. Each of the following representations and
---------------------
warranties is true and correct on and as of the Closing Date except to the
extent that the facts and circumstances giving rise to any such failure to be so
true and correct, in the aggregate, could not reasonably be expected to have a
Material Adverse Effect:
(i) To the best knowledge of, respectively, the General Partner or the
Borrower, the Projects of such entity and its Subsidiaries do not
contain, and have not previously contained, any Materials of
Environmental Concern in amounts or concentrations which constitute
or constituted a violation of, or could reasonably be expected to
give rise to liability under, Environmental Laws. In making this
statement, General Partner and Borrower are assuming (except to the
extent that either of them has actual knowledge to the contrary)
that any Person handling any Materials of Environmental Concern at
any Project will do so in a reasonable manner and in accordance with
all legal requirements.
(ii) To the best knowledge of such entity, the Projects of such entity
and its Subsidiaries and all operations at the Projects are in
material compliance, and have in the last two years been in material
compliance, with all applicable Environmental Laws, and there is no
material contamination at, under or about the Projects of such
entity and its Subsidiaries, or violation of any Environmental Law
with respect to the Projects of such entity and its Subsidiaries.
(iii) Neither it nor any of its Subsidiaries has received any written
notice of violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters or compliance
with Environmental Laws with regard to any of the Projects, nor does
it have knowledge or reason to believe that any such notice will be
received or is being threatened.
39
(iv) To the best knowledge of such entity, Materials of Environmental
Concern have not been transported or disposed of from the Projects of
such entity and its Subsidiaries in violation of, or in a manner or
to a location which could reasonably be expected to give rise to
liability under, Environmental Laws, nor have any Materials of
Environmental Concern been generated, treated, stored or disposed of
at, on or under any of the Projects of such entity and its
Subsidiaries in violation of, or in a manner that could reasonably be
expected to give rise to liability under, any applicable
Environmental Laws.
(v) No judicial proceedings or governmental or administrative action is
pending, or, to the knowledge of such entity, threatened, under any
Environmental Law to which such entity or any of its Subsidiaries is
or will be named as a party with respect to the Projects of such
entity and its Subsidiaries, nor are there any consent decrees or
other decrees, consent orders, administrative order or other orders,
or other administrative or judicial requirements outstanding under
any Environmental Law with respect to the Projects of such entity and
its Subsidiaries.
(vi) To the best knowledge of such entity, there has been no release or
threat of release of Materials of Environmental Concern at or from
the Projects of such entity and its Subsidiaries, or arising from or
related to the operations of such entity and its Subsidiaries in
connection with the Projects in violation of or in amounts or in a
manner that could reasonably be expected to give rise to liability
under Environmental Laws.
6.20 Unencumbered Assets. Schedule 2 hereto contains a complete and
-------------------
accurate description of Unencumbered Assets as of the Closing Date.
6.21 Year 2000 Representation and Warranty. The Borrower has conducted a
-------------------------------------
comprehensive review and assessment of the Borrower's computer applications and
made inquiry of the Borrower's key tenants and lessees with respect to the "year
2000 problem" (that is, the risk that computer applications may not be able to
properly perform date-sensitive functions after December 31, 1999) and, based on
that review and inquiry, the Borrower does not believe the year 2000 problem
will result in a material adverse change in the Borrower's business condition
(financial or otherwise), operations, properties or prospects, or ability to
repay the Loan.
ARTICLE VII
COVENANTS
During the term of this Agreement, unless with respect to clauses (i),
(iii) and (iv) of Section 7.20 all of the Lenders or with respect to all other
------------
Sections in this Article VII the Required Lenders, shall otherwise consent in
-----------
writing:
7.1 Financial Reporting. The General Partner and the Borrower will
-------------------
maintain, for themselves and each Subsidiary, a system of accounting established
and administered in accordance with GAAP, and furnish to the Lenders:
40
(i) As soon as available, but in any event not later than 50 days after the
close of each of the first three fiscal quarters, for the General
Partner (consolidated with the Borrower and their Subsidiaries) and for
AGC, an unaudited consolidated balance sheet as of the close of each
such period and the related unaudited consolidated statements of income
and retained earnings and of cash flows of such party for such period
and the portion of the fiscal year through the end of such period,
setting forth in each case in comparative form the figures for the
previous year, all certified by the General Partner's or AGC's (as the
case may be) chief financial officer or chief accounting officer,
(ii) As soon as available, but in any event not later than 50 days after the
close of each of the first three fiscal quarters, for the General
Partner, the Borrower and their Subsidiaries, related reports in form
and substance satisfactory to the Required Lenders, all certified by the
entity's chief financial officer or chief accounting officer, including
a statement of Funds From Operations (for the General Partner only), a
description of Unencumbered Assets, a listing of capital expenditures
and a pro-forma acquisition report for newly acquired Projects in the
form previously approved by Administrative Agent;
(iii) As soon as available, but in any event not later than 100 days after the
close of each fiscal year, for the General Partner (consolidated with
the Borrower and their Subsidiaries) and for AGC, audited financial
statements, including a consolidated balance sheet as at the end of such
year and the related consolidated statements of income and retained
earnings and of cash flows for such year, setting forth in each case in
comparative form the figures for the previous year, reported on by
PriceWaterhouseCoopers LLP (or other independent certified public
accountants of nationally recognized standing acceptable to
Administrative Agent) without a "going concern" or like qualification or
exception, or qualification arising out of the scope of the audit;
(iv) As soon as available, but in any event not Later than 100 days after the
close of each fiscal year, for the General Partner, the Borrower and
their Subsidiaries, related reports in form and substance satisfactory
to the Required Lenders, certified by the entity's chief financial
officer or chief accounting officer, including reports containing
information regarding each individual property in the form described in
Section 5.1(xii);
----------------
(v) Together with the quarterly and annual financial statements required
hereunder, a compliance certificate in substantially the form of Exhibit
-------
D hereto signed by the General Partner's and the Borrower's chief
-
financial officers or chief accounting officers showing the calculations
and computations necessary to determine compliance with this Agreement
and stating that no Default or Unmatured Default exists, or if any
Default or Unmatured Default exists, stating the nature and status
thereof;
41
(vi) As soon as possible and in any event within 10 days as the General
Partner or the Borrower knows that any Reportable Event has
occurred with respect to any Plan, a statement, signed by the chief
financial officer of such entity, describing said Reportable Event
and the action which such entity proposes to take with respect
thereto;
(vii) As soon as possible and in any event within 10 days after receipt
by the General Partner or the Borrower, a copy of (a) any notice or
claim to the effect that the General Partner, the Borrower or any
of their Subsidiaries is or may be liable to any Person as a result
of the release by such entity, any of its Subsidiaries, or any
other Person of any toxic or hazardous waste or substance into the
environment, and (b) any notice alleging any violation of any
federal, state or local environmental, health or safety law or
regulation by the General Partner or the Borrower or any of their
Subsidiaries, which, in either case, could reasonably be expected
to have a Material Adverse Effect;
(viii) Promptly upon the furnishing thereof to the shareholders of the
General Partner or the partners of the Borrower, copies of all
financial statements, reports, proxy statements and other materials
so furnished;
(ix) Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other reports and any
other public information which the General Partner, the Borrower or
any of their Subsidiaries files with the Securities Exchange
Commission;
(x) Promptly upon the distribution thereof to the press or the public,
copies of all press releases; and
(xi) Such other information (including, without limitation, financial
statements for the Borrower and non-financial information) as the
Administrative Agent or any Lender may from time to time reasonably
request.
7.2 Use of Proceeds. The General Partner and the Borrower will, and will
---------------
cause each of their Subsidiaries to, use the proceeds of the Advances for the
Acquisition, for the general business purposes of the Borrower, including
working capital needs and interim financing for property acquisitions of new
Projects, and to refinance existing debt. The General Partner and the Borrower
will not, nor will they permit any Subsidiary to, use any of the proceeds of the
Advances (i) to purchase or carry any "margin stock" (as defined in Regulation
U) or (ii) to fund any purchase of, or offer for, any Capital Stock of any
Person, unless such Person has consented to such offer prior any public
announcements relating thereto and the Required Lenders have consented to such
use of the proceeds of such Advance (if such consent of the Required Lenders is
required hereunder).
7.3 Notice of Default. The General Partner and the Borrower will give, and
-----------------
will cause each of their Subsidiaries to give, prompt (and in any event within
five Business Days of such Person's learning of such event) notice in writing to
the Lenders of the occurrence of (i) any Default or Unmatured Default and (ii)
of any other development, financial or otherwise, which could reasonably be
expected to have a Material Adverse Effect.
42
7.4 Conduct of Business: Limitations on Investments. The General Partner
-----------------------------------------------
and the Borrower will do, and will cause each of their Subsidiaries to do, all
things necessary to remain duly incorporated and/or duly qualified, validly
existing and in good standing as a real estate investment trust, corporation,
general partnership or limited partnership, as the case may be, in its
jurisdiction of incorporation/formation and maintain all requisite authority to
conduct its business in each jurisdiction in which its business is conducted and
to carry on and conduct its businesses in substantially the same manner as it is
presently conducted. Neither the General Partner, the Borrower nor any of their
respective Subsidiaries will undertake any business other than the acquisition,
development, ownership and leasing of golf course properties and ancillary
businesses specifically related thereto, except that the Borrower and its
Subsidiaries may invest in (i) undeveloped or non-golf course land, (ii)
non-golf property holdings, (iii) stock holdings, (iv) mortgages on golf course
properties and (v) joint ventures and partnerships, provided that the total
investment in any one of the first three of the foregoing categories (excluding
cash and Cash Equivalents) does not exceed five percent (5%) of Capitalization
Value, the total investment in either of the fourth or fifth categories
(mortgages on golf course properties and joint ventures and partnerships)
(excluding cash and Cash Equivalents) does not exceed ten percent (10%) of
Capitalization Value, and the total investment in all of the foregoing
investment categories (excluding cash and Cash Equivalents) in the aggregate is
less than or equal to fifteen percent (15%) of Capitalization Value (such
determination to be made in each case at the time such investment is made). In
addition, the aggregate amount invested by the Borrower and its Subsidiaries at
any time in the development of golf course properties which are not yet open for
business (including the acquisition cost of the land therefor) shall not exceed
ten percent (10%) of Capitalization Value For the purposes of this Section 7.4,
all assets shall be valued in accordance with GAAP except that non-revenue
generating investments such as land and stock holdings shall be valued at the
lower of acquisition cost or market value. In the event of any disagreement as
to how to value an investment, the reasonable judgment of the Administrative
Agent shall prevail.
7.5 Taxes. The General Partner and the Borrower will pay, and will cause
-----
each of their Subsidiaries to pay, when due all material taxes, assessments and
governmental charges and levies upon them or their income, profits or Projects,
except those which are being contested in good faith by appropriate proceedings
and with respect to which adequate reserves have been set aside.
7.6 Insurance. The General Partner and the Borrower will maintain, and
---------
will cause each of their Subsidiaries to maintain (or cause the tenant under a
lease of a golf course property to maintain (with the General Partner, the
Borrower or their Subsidiaries, as applicable, named as an additional insured),
with financially sound and reputable insurance companies insurance on all their
Property in such amounts and covering such risks as is consistent with sound
business practice, and the General Partner and the Borrower will furnish to any
Lender upon request full information as to the insurance carried.
7.7 Compliance with Laws. The General Partner and the Borrower will pay
--------------------
and will cause each of their Subsidiaries to, comply with all laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
they may be subject.
7.8 Maintenance of Properties. The General Partner and the Borrower
-------------------------
will, and will cause each of their Subsidiaries to (or cause the tenant under a
lease of a golf course property to),
43
do all things necessary to maintain, preserve, protect and keep its Property in
good repair, working order and condition (ordinary wear and tear excepted), and
make all necessary and proper repairs, renewals and replacements so that their
businesses carried on in connection therewith may be properly conducted at all
times.
7.9 Inspection. The General Partner and the Borrower will, and will
----------
cause each of their Subsidiaries to, permit the Lenders, by their respective
representatives and agents, to inspect any of the Projects, corporate books and
financial records of the General Partner, the Borrower and each of their
Subsidiaries, to examine and make copies of the books of accounts and other
financial records of the General Partner, the Borrower and each of their
Subsidiaries, and to discuss the affairs, finances and accounts of the General
Partner, the Borrower and each of their Subsidiaries, and to be advised as to
the same by, their respective officers at such reasonable times during normal
business hours and intervals as the Lenders may designate, all with reasonable
notice. Such inspections and examinations shall be at the Lenders' sole cost and
expense unless a Default has occurred and is continuing at the time thereof.
7.10 Maintenance of Status. The General Partner shall at all times (i)
---------------------
remain a corporation listed and in good standing on the New York Stock Exchange,
and (ii) maintain its status as a real estate investment trust in compliance
with all applicable provisions of the Code.
7.11 Dividends. Provided there is not a continuing Default under Section
--------- -------
8.1 or Section 8.2 and there is not a continuing Default under Section 8.3
--- ----------- ------------
relating to a breach of any of the covenants contained in Section 7.20 the
------------
General Partner shall be permitted to declare and pay dividends on its Capital
Stock from time to time in amounts determined by the General Partner, provided,
--------
however, that subject to the terms of the next sentence, in no event shall the
-------
General Partner declare or pay dividends on its Capital Stock if dividends paid
in any period of four fiscal quarters, in the aggregate, would exceed 90% of
Funds from Operations for such period. Notwithstanding the foregoing, the
General Partner shall be permitted to distribute whatever amount of dividends is
necessary to maintain its tax status as a real estate investment trust, provided
there is not a continuing Default under Section 8.1 or Section 8.2.
----------- -----------
7.12 Merger; Sale of Assets. The General Partner and the Borrower will
----------------------
not, nor will they permit any of their Subsidiaries to, enter into any merger,
consolidation, reorganization or liquidation or transfer or otherwise dispose of
all or a Substantial Portion of their Property, except for such transactions
that occur between Wholly-Owned Subsidiaries, provided, however, the General
-------- -------
Partner or the Borrower may merge with or acquire other companies or
partnerships so long as:
(i) After giving effect to such merger or acquisition. no
provision of this Agreement will have been violated;
(ii) the General Partner or the Borrower will be the surviving
entity; and
(iii) such merger is not accomplished through a hostile takeover.
The Borrower will notify all of the Lenders of all material acquisitions,
dispositions, mergers or asset purchases regardless of whether or not the
Required Lenders must first give their written consent.
44
7.13 General Partner's Ownership and Control of Borrower. The General
---------------------------------------------------
Partner will not allow its percentage ownership interest in or voting control of
the Borrower to be less than fifty-one percent (51%) and shall remain the sole
general partner of Borrower. The General Partner will not allow or suffer to
exist any pledge, other encumbrance or the conversion to limited partnership
interests of any of the general partnership interests in the Borrower.
7.14 Sale and Leaseback. The General Partner and the Borrower will not,
------------------
nor will they permit any of their Subsidiaries to, sell or transfer any of its
Projects in order to concurrently or subsequently lease as lessee such Projects.
7.15 Liens. The General Partner and the Borrower will not, nor will they
-----
permit any of their Subsidiaries to, create, incur, or suffer to exist any Lien
in, of or on the Property of the General Partner, the Borrower or any of their
Subsidiaries, except:
(i) Liens for taxes, assessments or governmental charges or levies
on their Property if the same shall not at the time be
delinquent or thereafter can be paid without penalty, or are
being contested in good faith and by appropriate proceedings
and for which adequate reserves shall have been set aside on
their books;
(ii) Liens imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the
ordinary course of business which secure payment of
obligations not more than 90 days past due or which are being
contested in good faith by appropriate proceedings and for
which adequate reserves shall have been set aside on its
books;
(iii) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions.
or other social security or retirement benefits, or similar
legislation;
(iv) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a
nature generally existing with respect to properties of a
similar character and which do not in any material way affect
the marketability of the same or interfere with the use
thereof in the business of the General Partner, the Borrower
or their Subsidiaries; and
(v) Liens arising in connection with any Indebtedness permitted
hereunder to the extent such Liens will not result in a
violation of Section 7.20(v) or any of the other provisions of
this Agreement.
Liens permitted pursuant to clauses (i) through (iv) of this Section 7.15 shall
------------
be deemed to be "Permitted Liens".
---------------
7.16 Affiliates. The General Partner and the Borrower will not, nor will
----------
they permit any of their Subsidiaries to, enter into any transaction (including,
without limitation, the purchase or sale of any Property or service) with, or
make any payment or transfer to, any Affiliate except in the ordinary course of
business and pursuant to the reasonable requirements of the General Partner's,
the Borrower's or such Subsidiary's business and upon fair and reasonable terms
no
45
less favorable to the General Partner, the Borrower or such Subsidiary than the
General Partner, the Borrower or such Subsidiary would obtain in a comparable
arms-length transaction.
7.17 Interest Rate Hedging. The General Partner and the Borrower will not
---------------------
enter into or remain liable upon, nor will they permit any Subsidiary to enter
into or remain liable upon. any agreements, devices or arrangements designed to
protect at least one of the parties thereto from the fluctuations of interest
rates, exchange rates or forward rates applicable to such party's assets,
liabilities or exchange transactions, including, but not limited to, interest
rate exchange agreements, forward currency exchange agreements, interest rate
cap or collar protection agreements, forward rate currency or interest rate
options unless such agreement, device or arrangement was entered into by the
General Partner or the Borrower in the ordinary course of its business for the
purpose of hedging interest rate risk to the General Partner or the Borrower.
7.18 Limitation on Variable Rate Indebtedness. The General Partner and the
----------------------------------------
Borrower shall, at the request of the Required Lenders, enter into such interest
rate protection agreements as may be required to maintain at all times all
Funded Debt which bears interest at a rate that is not fixed for the full period
through the Facility Termination Date at fifty percent (50%) or less of total
Funded Debt, provided that the Required Lenders shall not require the General
Partner or the Borrower to enter into a specific interest rate protection
agreement that would cause the General Partner to lose its REIT status.
7.19 Consolidated Net Worth. The General Partner, as of the last day of
----------------------
any fiscal quarter, shall maintain a Consolidated Net Worth of not less than the
sum of (i) $450,000,000 plus (ii) seventy-five percent (75%) of the net proceeds
received by the General Partner (net of customary related fees and expenses) in
connection with any offering of stock or other ownership interest in the General
Partner after the Closing Date.
7.20 Indebtedness and Cash Flow Covenants. The General Partner on a
------------------------------------
consolidated basis with the Borrower and their Subsidiaries shall not permit:
(i) as of the last day of any fiscal quarter, the ratio of (A)
EBITDA to (B) Interest Expense for the four (4) fiscal
quarters then ended to be less than, from the Closing Date
through December 31, 1999, 2.5 to 1.0 and thereafter, 2.75 to
1.0; provided, however, that until four (4) full fiscal
quarters have elapsed after the Closing Date, Interest Expense
will be calculated by annualizing the Interest Expense for
those full fiscal quarters that have elapsed since the Closing
Date;
(ii) as of the last day of any fiscal quarter, the ratio of (A)
EBITDA to (B) Fixed Charges for the four (4) fiscal quarters
then ended to be less than, from the Closing Date through
December 31, 1999, 1.85 to 1.0 and thereafter, 2.0 to 1.0;
provided, however, that until four (4) full fiscal quarters
have elapsed after the Closing Date, Fixed Charges will be
calculated by annualizing the Fixed Charges for those full
fiscal quarters that have elapsed since the Closing Date;
(iii) as of any day, Consolidated Total Indebtedness to exceed fifty
percent (50%) of Capitalization Value;
46
(iv) as of any day, the Value of Unencumbered Assets to be less
than 2.0 times the Consolidated Unsecured Indebtedness; or
(v) as of any day, Consolidated Secured Indebtedness to exceed
twenty percent (20%) of Capitalization Value.
7.21 Environmental Matters. The General Partner and the Borrower will and
---------------------
will cause each of their Subsidiaries to:
7.21.1 comply with, and use its best efforts to ensure
compliance by all tenants and subtenants, if any, with, all
applicable Environmental Laws and obtain and comply with and
maintain, and use its best efforts to ensure that all tenants and
subtenants obtain and comply with and maintain, any and all
licenses, approvals, notifications, registrations or permits
required by applicable Environmental Laws, except to the extent that
failure to do so could not be reasonably expected to have a Material
Adverse Effect;
7.21.2 conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal and other actions
required under Environmental Laws and promptly comply in all
material respects with all lawful orders and directives of all
Governmental Authorities regarding Environmental Laws, except to the
extent that (a) the same are being contested in good faith by
appropriate proceedings and the pendency of such proceedings could
not be reasonably expected to have a Material Adverse Effect, or (b)
the General Partner has determined in good faith that contesting the
same is not in the best interests of the General Partner, the
Borrower and their Subsidiaries and the failure to contest the same
could not be reasonably expected to have a Material Adverse Effect;
or
7.21.3 defend, indemnify and hold harmless the Administrative
Agent and each Lender, and their respective employees, agents,
officers and directors, from and against any claims, demands,
penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature known or unknown, contingent or
otherwise, arising out of, or in any way relating to the violation
of, noncompliance with or liability under any Environmental Laws
applicable to the operations of the General Partner, the Borrower,
their Subsidiaries or the Projects, or any orders, requirements or
demands of Governmental Authorities related thereto, including,
without limitation, attorney's and consultant's fees, investigation
and laboratory fees, response costs, court costs and litigation
expenses, except to the extent that any of the foregoing arise out
of the gross negligence or willful misconduct of the party seeking
indemnification therefor. This indemnity shall continue in full
force and effect regardless of the termination of this Agreement;
and
7.21.4 prior to the acquisition of a new Project after the
Closing Date, perform or cause to be performed an environmental
investigation, which investigation shall at a minimum comply with
the specifications and procedures attached hereto as Exhibit E. In
connection with any such investigation, Borrower shall cause to be
prepared a report of such investigation, to be made available to
47
any Lender upon request, for informational purposes and to assure
compliance with the specifications and procedures.
7.22 Control of the General Partner. The General Partner and the Borrower
------------------------------
will not suffer or permit to occur a "DGP Change of Control" (as such term is
defined in the Note Purchase Agreements (as in effect on the date hereof).
7.23 Approved Operating Leases. The Borrower shall lease at least 90%
-------------------------
(by Capitalization Value) of its Projects to Approved Operators under Approved
Operating Leases.
7.24 Borrower's Partnership Agreement. The General Partner shall not
--------------------------------
consent to any changes to Borrower's partnership agreement without the prior
written consent of the Required Lenders, provided that the General Partner may
consent to (i) immaterial changes that do not adversely affect the Lenders and
(ii) any changes necessary to maintain General Partner's status as a real estate
investment trust, without such prior consent.
7.25 General Partner's Assets. The General Partner shall not invest in or
------------------------
own any material assets directly other than its partnership interest in
Borrower.
7.26 Notice of Rating Change. The Borrower shall notify the Administrative
-----------------------
Agent promptly if there is any change in the long term unsecured debt rating
from Xxxxx'x, S&P or the National Association of Insurance Commissioners of
either the General Partner or the Borrower.
7.27 Year 2000 Compliance. The Borrower will promptly notify the
--------------------
Administrative Agent in the event the Borrower discovers or determines that any
computer application (including those of its suppliers and vendors) that is
material to its or any of its Subsidiaries' business and operations will not be
Year 2000 compliant on a timely basis, except to the extent that such failure
could not reasonably be expected to have a Material Adverse Effect.
7.28 Operating Leases. The Borrower shall not, without the prior written
----------------
consent of the Required Lenders, modify, amend, or terminate any Approved
Operating Lease if such modification, amendment or termination is reasonably
anticipated to be adverse to the Borrower in any material respect.
7.29 Capital Expenditures. The Borrower shall not make any capital
--------------------
expenditures with respect to any Property unless an Approved Operator under an
Approved Operating Lease or the tenant under a lease otherwise permitted
hereunder has agreed in writing to compensate Borrower for the cost of such
capital expenditure through the payment of increased rental under such Approved
Operating Lease or lease, provided Approved Operator or tenant shall maintain,
at its sole expense, such capital expenditure in a manner consistent with its
original condition, subject to normal wear and tear, throughout the term of the
Approved Operating Lease or lease.
7.30 No Negative Pledge. The General Partner and the Borrower will not,
------------------
and they will not permit their Subsidiaries to, enter into any agreement with
any Person after the date hereof which prohibits the ability of the General
Partner, the Borrower or any of their Subsidiaries to create, incur, assume or
suffer to exist any lien on the assets of the General Partner, the Borrower or
any of their Subsidiaries other than any agreement in favor of the
Administrative Agent and the Lenders, provided, however, that this Section 7.30
-------- ------- ------------
shall not apply to restrictions under capitalized leases with respect to the
property subject thereto or to
48
Indebtedness secured by Liens permitted hereunder, provided such restrictions
are by their terms effective only against the assets subject to such Liens.
ARTICLE VIII
DEFAULTS
The occurrence of any one or more of the following events shall constitute
a Default:
8.1 Nonpayment of Principal. Nonpayment of any principal payment on any
-----------------------
Note when due.
8.2 Nonpayment of Other Amounts. Nonpayment of interest upon any Note or
---------------------------
of any Commitment Fee or other payment Obligations under any of the Loan
Documents within five (5) Business Days after the same becomes due.
8.3 Breach of Certain Covenants. The breach of any of the terms or
---------------------------
provisions of Sections 7.2, 7.10 through 7.20, 7.22, 7.24 and 7.25.
------------ ---- ---- ---- ----
8.4 Representation of Warranty Untrue. Any representation or warranty
---------------------------------
made or deemed made by or on behalf of the General Partner, the Borrower or any
of their Subsidiaries to the Lenders or the Administrative Agent under or in
connection with this Agreement, any Loan, or any certificate or information
delivered in connection with this Agreement or any other Loan Document shall be
materially false on the date as of which made.
8.5 Breach of Other Provisions. The breach (other than a breach which
--------------------------
constitutes a Default under Section 8.1, 8.2, 8.3 or 8.4 of any of the terms or
----------- --- --- ---
provisions of this Agreement or any other Loan Document which is not remedied
within thirty (30) days after written notice from the Administrative Agent or
any Lender.
8.6 Material Indebtedness. (i) Any failure of the General Partner, the
---------------------
Borrower or any of their Subsidiaries or of AGC to pay when due any payment due
under any Funded Debt or lease obligations aggregating in excess of $5,000,000
("Material Indebtedness") after giving effect to any applicable grace period
thereunder; or (ii) any default in the performance of any term, provision or
condition contained in any agreement under which any such Material Indebtedness
was created or is governed, or any other event shall occur or condition exist,
the effect of which is to cause, or to permit the holder or holders of such
Material Indebtedness to cause, such Material Indebtedness to become due prior
to its stated maturity or (iii) any Material Indebtedness of the General
Partner, the Borrower, any of their Subsidiaries shall or of AGC shall be
declared to be due and payable or required to be prepaid or repurchased (other
than by a regularly scheduled payment) prior to the stared maturity thereof.
8.7 Voluntary Bankruptcy. The General Partner, the Borrower or any of
-- -----------------
their Subsidiaries or AGC shall (i) have an order for relief entered with
respect to it under the Federal bankruptcy laws as now or hereafter in effect,
(ii) make an assignment for the benefit of creditors, (iii) apply for, seek,
consent to, or acquiesce in, the appointment of a receiver, custodian, trustee,
examiner, liquidator or similar official for it or any Substantial Portion of
its Property, (iv) institute any proceeding seeking an order for relief under
the Federal bankruptcy laws as now or hereafter in effect or seeking to
adjudicate it as a bankrupt or insolvent, or
49
seeking dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, (v) take any
corporate action to authorize or effect any of the foregoing actions set forth
in this Section 8.7, (vi) not pay, or admit in writing its inability to pay, its
-----------
debts generally as they become due.
8.8 Involuntary Bankruptcy. A receiver, trustee, examiner, liquidator or
----------------------
similar official shall be appointed for the General Partner, the Borrower or any
of their Subsidiaries or for AGC, or for, or a proceeding described in Section
-------
8.7(iv) shall be instituted against the General Partner, the Borrower or any
-------
such Subsidiary or AGC and such appointment continues undischarged or such
proceeding continues undismissed or unstayed for a period of sixty (60)
consecutive days.
8.9 Condemnation. Any court, government or governmental agency shall
------------
condemn, seize or otherwise appropriate, or take custody or control of (each a
"Condemnation"), all or any portion of the Projects of the Borrower and its
------------
Subsidiaries which, when taken together with all other Property of the Borrower
and its Subsidiaries so condemned, seized, appropriated, or taken custody or
control of, during the twelve-month period ending with the month in which any
such Condemnation occurs, constitutes a Substantial Portion of their Property.
8.10 Judgments. The General Partner, the Borrower or any of their
---------
Subsidiaries or AGC shall fail within sixty (60) days to pay, bond or otherwise
discharge any judgments or orders for the payment of money in an amount which,
when added to all other judgments or orders outstanding against the General
Partner, the Borrower or any Subsidiary or AGC would exceed $10,000,000 in the
aggregate, which have not been stayed on appeal or otherwise appropriately
contested in good faith.
8.11 AGC. AGC shall (i) have failed by December 31, 1999 to have extended
---
the termination and maturity dates of all of its existing credit facilities to
match or extend beyond the Facility Termination Date hereunder, (ii) have failed
to maintain at all times prior to the Facility Termination Date hereunder,
calculated at the end of each fiscal quarter of AGC, a ratio of (A) EBITDA plus
GAAP rental expense, in each case for the most recent four (4) fiscal quarters
for which financial results have been reported to (B) GAAP rental expense plus
GAAP interest expense of at least 1.1 to 1.0, in each case for the most recent
four (4) fiscal quarters for which financial results have been reported, (iii)
have failed to make any payment of rent or other material monetary obligation
under any Approved Operating Lease with the Borrower within thirty (30) days
after the due date thereof or (iv) enter into any merger, consolidation
reorganization or liquidation or transfer or otherwise dispose of all or
Substantial Portion of its assets, except for such transactions that occur
between wholly-owned Subsidiaries of AGC and the merger of Golf Enterprises,
Inc. into AGC.
8.12 Pledge of AGC Ownership Interests. Less than sixty-five percent (65%)
---------------------------------
of the total ownership interests in AGC shall be unencumbered by any pledge or
other security interest therein.
8.13 Ownership of AGC. Less than sixty-five percent (65%) of the total
----------------
ownership interests in AGC or of the total voting power shall be held, in the
aggregate, by Xxxxx X. Xxxxx, Dallas Price and/or their children and
grandchildren or by trusts in which such Persons hold the entire beneficial
interest or other entities wholly owned and controlled by such Persons.
50
8.14 Multiemployer Plan Withdrawal Liability. The General Partner, the
---------------------------------------
Borrower or any other member of the Controlled Group shall have been notified by
the sponsor of a Multiemployer Plan that it has incurred withdrawal liability to
such Multiemployer Plan in an amount which, when aggregated with all other
amounts required to be paid to Multiemployer Plans by the General Partner, the
Borrower or any other member of the Controlled Group as withdrawal liability
(determined as of the date of such notification), exceeds $1,000,000 or requires
payments exceeding $250,000 per annum.
8.15 Multiemployer Plan Termination. The General Partner, the Borrower or
------------------------------
any other member of the Controlled Group shall have been notified by the sponsor
of a Multiemployer Plan that such Multiemployer Plan is in reorganization or is
being terminated, within the meaning of Title IV of ERISA, if as a result of
such reorganization or termination the aggregate annual contributions of the
General Partner, the Borrower and the other members of the Controlled Group
(taken as a whole) to all Multiemployer Plans which are then in reorganization
or being terminated have been or will be increased over the amounts contributed
to such Multiemployer Plans for the respective plan years of each such
Multiemployer Plan immediately preceding the plan year in which the
reorganization or termination occurs by art amount exceeding $250,000.
8.16 Environmental Remediation. Failure to remediate within the time
-------------------------
period permitted by law or governmental order, after all administrative hearings
and appeals have been concluded (or within a reasonable time in light of the
nature of the problem if no specific rime period is so established), material
environmental problems related to Projects of the Borrower and its Subsidiaries
if the affected Projects have an aggregate book value in excess of $10,000,000.
8.17 Revocation of Guaranty. The revocation or attempted revocation of any
----------------------
Guaranty.
ARTICLE IX
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
9.1 Acceleration. If any Default described in Section 8.7 or Section 8.8
------------ ----------- -----------
occurs with respect to the General Partner or the Borrower, the obligations of
the Lenders to make Loans and of the Issuing Bank to issue Facility Letters of
Credit hereunder shall automatically terminate and the Obligations shall
immediately become due and payable without any election or action on the part of
the Administrative Agent or any Lender. If any other Default occurs, the
Required Lenders may terminate or suspend the obligations of the Lenders to make
Loans hereunder and to issue Facility Letters of Credit, or declare the
Obligations to be due and payable, or both, whereupon the Obligations shall
become immediately due and payable, without presentment, demand, protest or
notice of any kind, all of which the Borrower hereby expressly waives.
In addition to the foregoing, following the occurrence of a Default and so
long as any Facility Letter of Credit has not been fully drawn and has not been
cancelled or expired by its terms, upon demand by the Administrative Agent the
Borrower shall deposit in the Letter of Credit Collateral Account cash in an
amount equal to the aggregate undrawn face amount of all outstanding Facility
Letters of Credit and all fees and other amounts due or which may become due
with respect thereto. The Borrower shall have no control over funds in the
Letter of Credit
51
Collateral Account, which funds will be invested by the Administrative Agent
from time to time at its discretion in certificates of deposit of First Chicago
having a maturity not exceeding 30 days. Such funds shall be promptly applied by
the Administrative Agent to reimburse any Issuing Bank for drafts drawn from
time to time under the Facility Letters of Credit. Such funds, if any, remaining
in the Letter of Credit Collateral Account following the payment of all
Obligations in full shall, unless Administrative Agent is otherwise directed by
a court of competent jurisdiction, be promptly paid over to the Borrower.
If, within ten (10) days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Loans
hereunder or to issue Facility Letters of Credit as a result of any Default
(other than any Default as described in Section 8.7 or 8.8 with respect to the
----------- ---
Borrower) and before any judgment or decree for the payment of the Obligations
shall have been obtained or entered, the Required Lenders (in their sole
discretion) shall so direct, the Administrative Agent shall, by notice to the
Borrower, rescind and annul such acceleration and/or termination.
9.2 Amendments. Subject to the provisions of this Article IX, the Required
----------
Lenders (or the Administrative Agent with the consent in writing of the Required
Lenders) and the Borrower may enter into agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Lenders or the Borrower hereunder or waiving any
Default hereunder; provided, however, that no such supplemental agreement shall,
-------- -------
without the consent of all Lenders:
(i) Extend the Facility Termination Date or forgive all or any
portion of the principal amount of any Loan or accrued
interest thereon or the Facility Fee, reduce the Applicable
Margins on the underlying interest rate options or otherwise
modify or add to such interest rate options, or extend the
time of payment of any of the Obligations, subject to the last
paragraph of Section 9.1.
-----------
(ii) Release the General Partner from the Guaranty.
(iii) Reduce the percentage specified in the definition of Required
Lenders.
(iv) Increase the amount of the Aggregate Commitment.
(v) Permit the Borrower to assign or allow another Person to
assume its rights under this Agreement, other than pursuant to
a merger or other transaction permitted or consented to
hereunder.
(vi) Amend this Section 9.2.
-----------
(vii) Amend clause (iv) Section 7.20 or any of the defined terms
------------
contained therein;
and provided further that no such supplemental agreement shall, without the
-------- -------
consent of the Super Majority Lenders, amend any of clauses (i) or (iii) of
Section 7.20 or any of the defined terms contained therein.
------------
52
No amendment of any provision of this Agreement relating to the Administrative
Agent shall be effective without the written consent of the Administrative
Agent, and no amendment increasing the Commitment of any Lender shall be
effective without the written consent of such Lender.
9.3 Preservation of Rights. No delay or omission of the Lenders or the
----------------------
Administrative Agent to exercise any right under the Loan Documents shall impair
such right or be construed to be a waiver of any Default or an acquiescence
therein, and the making of a Loan notwithstanding the existence of a Default or
the inability of the Borrower to satisfy the conditions precedent to such Loan
shall not constitute any waiver or acquiescence. Any single or partial exercise
of any such right shall not preclude other or further exercise thereof or the
exercise of any other right, and no waiver, amendment or other variation of the
terms, conditions or provisions of the Loan Documents whatsoever shall be valid
unless in writing signed by the Lenders required pursuant to Section 9.2, and
-----------
then only to the extent in such writing specifically set forth. All remedies
contained in the Loan Documents or by law afforded shall be cumulative and all
shall be available to the Administrative Agent and the Lenders until the
Obligations have been paid in full.
ARTICLE X
GENERAL PROVISIONS
10.1 Survival of Representations. All representations and warranties of
---------------------------
the Borrower contained in this Agreement shall survive delivery of the Notes and
the making of the Loans herein contemplated.
10.2 Governmental Regulation. Anything contained in this Agreement to the
-----------------------
contrary notwithstanding, no Lender shall be obligated to extend credit to the
Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
10.3 Taxes. Any taxes (excluding federal, state and local income or
-----
franchise or other taxes on the overall net income of any Lender) or other
similar assessments or charges made by any governmental or revenue authority in
respect of the Loan Documents shall be paid by the Borrower, together with
interest and penalties, if any (to the extent such interest and penalties do not
result from delay by any Lender).
10.4 Headings. Section headings in the Loan Documents are for convenience
--------
of reference only, and shall not govern the interpretation of any of the
provisions of the Loan Documents.
10.5 Entire Agreement. The Loan Documents embody the entire agreement and
----------------
understanding among the Borrower, the General Partner, the Administrative Agent
and the Lenders and supersede all prior commitments, agreements and
understandings among the Borrower, the Administrative Agent and the Lenders
relating to the subject matter thereof, except for the agreement of the Borrower
to pay certain fees to the Administrative Agent and the agreement of the
Administrative Agent to pay certain fees to the Lenders.
10.6 Several Obligations; Benefits of this Agreement. The respective
-----------------------------------------------
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the patter or agent of any other (except to the extent to which the
Administrative Agent is authorized to act as such). The
53
failure of any Lender to perform any of its obligations hereunder shall not
relieve any other Lender from any of its obligations hereunder. This Agreement
shall not be construed so as to confer any right or benefit upon any Person
other than the parties to this Agreement and their respective successors and
assigns.
10.7 Expenses; Indemnification. The Borrower shall reimburse the Arrangers
-------------------------
on demand for any reasonable costs, internal charges and reasonable
out-of-pocket expenses (including, without limitation, all reasonable fees for
consultants and reasonable fees and expenses for attorneys for the Arrangers,
which attorneys may be employees of the Arrangers) paid or incurred by the
Arrangers (whether in their capacity as arrangers, or, in the case of First
Chicago, in its capacity as Administrative Agent) in connection with the
preparation, negotiation. execution, delivery, review, amendment, modification,
and administration of the Loan Documents. The Borrower also agrees to reimburse
the Arrangers and the Lenders for any reasonable costs, internal charges and
reasonable out-of-pocket expenses (including, without limitation, all reasonable
fees and expenses for attorneys for the Arrangers and the Lenders, which
attorneys may be employees of the Arrangers or the Lenders) paid or incurred by
the Arrangers (whether in their capacity as arrangers, or, to the case of First
Chicago, in its capacity as Administrative Agent) or any Lender in connection
with the collection and enforcement of the Loan Documents or the Obligations
(including, without limitation, any negotiation of any restructuring or workout
whether or not consummated). The Borrower further agrees to indemnify the
Administrative Agent, the Arrangers and each Lender and their directors,
officers and employees against all losses, claims, damages, penalties,
judgments, liabilities and reasonable expenses (including, without limitation,
all expenses of litigation or preparation therefor whether or not such entity is
a party thereto) which any of them may pay or incur arising out of or relating
to this Agreement, the other Loan Documents, the Projects, the transactions
contemplated hereby or the direct or indirect application or proposed
application of the proceeds of any Loan hereunder, except to the extent arising
from the gross negligence or wilful misconduct of any of the Lenders, the
Administrative Agent, the Arrangers or such other indemnified persons. The
obligations of the Borrower under this Section 10.7 shall survive the
------------
termination of this Agreement.
10.8 Reserved.
--------
10.9 Accounting. Except as provided to the contrary herein, all accounting
----------
terms used herein shall be interpreted and all accounting determinations
hereunder shall be made in accordance with GAAP.
10.10 Severability of Provisions. Any provision in any Loan Document that
--------------------------
is held to be inoperative, unenforceable, or invalid in any jurisdiction shall,
as to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
10.11 Nonliability of Lenders. The relationship between the General
-----------------------
Partner and the Borrower, on the one hand, and the Lenders, the Arrangers and
the Administrative Agent, on the other, shall be solely that of borrower and
lender. Neither the Administrative Agent, the Arrangers nor any Lender shall
have any fiduciary responsibilities to the General Partner and the Borrower.
Neither the Administrative Agent, the Arrangers nor any Lender undertakes any
54
responsibility to the Borrower to review or inform the Borrower of any matter in
connection with any phase of the Borrower's business or operations.
10.12 Publicity. The Lenders shall have the right to publish a tombstone
---------
publicizing the transaction contemplated hereby without the consent of the
Borrower or General Partner, provided, however, that the Lenders shall first
-------- -------
provide the Borrower and the General Partner the opportunity to review the
proposed tombstone.
10.13 CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
-------------
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
10.14 CONSENT TO JURISDICTION. THE GENERAL PARTNER AND THE BORROWER EACH
-----------------------
HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF (i) ANY UNITED
STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO AND (ii) ANY UNITED
STATES FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK CITY IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS AND THE
GENERAL PARTNER AND THE BORROWER EACH HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS
IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO
THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT
SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE
ADMINISTRATIVE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE GENERAL
PARTNER OR THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL
PROCEEDING BY THE GENERAL PARTNER OF THE BORROWER AGAINST THE ADMINISTRATIVE
AGENT OR ANY LENDER OR ANY AFFILIATE OF THE ADMINISTRATIVE AGENT OR ANY LENDER
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED
TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN
CHICAGO, ILLINOIS OR NEW YORK, NEW YORK.
10.15 WAIVER OF JURY TRIAL. THE GENERAL PARTNER, THE BORROWER, THE
---------------------
ADMINISTRATIVE AGENT AND EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
10.16 Confidentiality. Each Lender agrees to hold any non-public
---------------
confidential information which it may receive from the Borrower pursuant to this
Agreement in confidence, except for disclosure (i) to its affiliates and to
other Lenders and their respective affiliates, (ii) to legal counsel,
accountants, and other professional advisors to such Lender or to a Transferee,
(iii) to regulatory officials, (iv) as required by law, regulation, or legal
process, (v) to such Lender's
55
direct or indirect contractual counterparts in swap agreements or to legal
counsel, accountants and other professional advisors to such counterparts, (vi)
permitted by Section 13.4 (vii) of information that was or becomes generally
------------
available to the public other than by disclosure by such Lender, or (viii) to
the extent reasonably required in connection with the enforcement of this
Agreement or any other Loan Documents.
ARTICLE XI
THE ADMINISTRATIVE AGENT AND AGREEMENTS AMONG LENDERS
11.1 Appointment. Subject to the provisions of Section 11.11, The First
----------- -------------
National Bank of Chicago is hereby appointed Administrative Agent hereunder and
under each other Loan Document, and each of the Lenders irrevocably authorizes
the Administrative Agent to act as the agent of such Lender. The Administrative
Agent agrees to act as such upon the express conditions contained in this
Article XI. The Administrative Agent shall not have a fiduciary relationship in
respect of the Borrower or any Lender by reason of this Agreement.
11.2 Powers. The Administrative Agent shall have and may exercise such
------
powers under the Loan Documents as are specifically delegated to the
Administrative Agent by the terms of each thereof, together with such powers as
are reasonably incidental thereto. The Administrative Agent shall have no
implied duties to the Lenders, or any obligation to the Lenders to take any
action thereunder except any action specifically provided by the Loan Documents
to be taken by the Administrative Agent.
11.3 General Immunity. Neither the Administrative Agent nor any of its
----------------
directors, officers, agents or employees shall be liable to the Borrower, the
Lenders or any Lender for any action taken or omitted to be taken by it or them
hereunder or under any other Loan Document or in connection herewith or
therewith except for its or their own gross negligence or willful misconduct.
11.4 No Responsibility for Loans, Recitals, etc. Neither the
-----------------
Administrative Agent nor any of its directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire into, or verify
(i) any statement, warranty or representation made in connection with any Loan
Document or any borrowing hereunder, (ii) the performance or observance of any
of the covenants or agreements of any obligor under any Loan Document,
including, without limitation, any agreement by an obligor to furnish
information directly to each Lender; (iii) the satisfaction of any condition
specified in Article V, except receipt of items required to be delivered to the
---------
Administrative Agent; (iv) the validity, effectiveness or genuineness of any
Loan Document or any other instrument or writing furnished in connection
therewith; or (v) the value, sufficiency, creation, perfection or priority of
any interest in any collateral security. The Administrative Agent shall have no
duty to disclose to the Lenders information that is not required to be furnished
by the Borrower to the Administrative Agent at such time, but is voluntarily
furnished by the Borrower to the Administrative Agent (either in its capacity as
Administrative Agent or in its individual capacity).
11.5 Action on Instructions of Lenders. The Administrative Agent shall in
---------------------------------
all cases be fully protected in acting, or in refraining from acting, hereunder
and under any other Loan Document in accordance with written instructions signed
by the Required Lenders, and such instructions and any action taken or failure
to act pursuant thereto shall be binding on all of the
56
Lenders and on all holders of Notes. The Administrative Agent shall be fully
justified in failing or refusing to take any action hereunder and under any
other Loan Document unless it shall first be indemnified to its satisfaction by
the Lenders pro rata against any and all liability, cost and expense that it may
incur by reason of taking or continuing to take any such action.
11.6 Employment of Agents and Counsel. The Administrative Agent may
--------------------------------
execute any of its duties as Administrative Agent hereunder and under any other
Loan Document by or through employees, agents, and attorneys-in-fact and so long
as it exercises reasonable care in the selection of such parties, the
Administrative Agent shall nor be answerable to the Lenders, except as to money
or securities received by it or its authorized agents, for the default or
misconduct of any such parties. The Administrative Agent shall be entitled to
advice of counsel concerning all matters pertaining to the agency hereby created
and its duties hereunder and under any other Loan Document.
11.7 Reliance on Documents; Counsel. The Administrative Agent shall be
------------------------------
entitled to rely upon any Note, notice, consent, certificate, affidavit, letter,
telegram, statement, paper or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and, in respect
to legal matters, upon the opinion of counsel selected by the Administrative
Agent, which counsel may be employees of the Administrative Agent.
11.8 Administrative Agent's Reimbursement and Indemnification. The Lenders
--------------------------------------------------------
agree to reimburse and indemnify the Administrative Agent ratably in proportion
to their respective Commitments (i) for any reasonable amounts not reimbursed by
the Borrower for which the Administrative Agent is entitled to reimbursement by
the Borrower under the Loan Documents including reasonable out-of-pocket
expenses in connection with the preparation, execution, delivery of the Loan
Documents, (ii) for any other reasonable out-of-pocket expenses incurred by the
Administrative Agent on behalf of the Lenders, in connection with the
administration and enforcement of the Loan Documents and (iii) for any
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind and nature whatsoever which may be
imposed on, incurred by or asserted against the Administrative Agent in any way
relating to or arising out of the Loan Documents or any other document delivered
in connection therewith or the transactions contemplated thereby, or the
enforcement of any of the terms thereof or of any such other documents, provided
--------
that no Lender shall be liable for any of the foregoing to the extent they arise
from the gross negligence or willful misconduct of the Administrative Agent. The
obligations of the Lenders under this Section 11.8 shall survive payment of the
------------
Obligations and termination of this Agreement.
11.9 Rights as a Lender. In the event the Administrative Agent is a
------------------
Lender, the Administrative Agent shall have the same rights and powers and the
same duties and obligations hereunder and under any other Loan Document as any
Lender and may exercise the same as though it were not the Administrative Agent,
and the term "Lender" or "Lenders" shall, at any time when the Administrative
Agent is a Lender, unless the context otherwise indicates, include the
Administrative Agent in its individual capacity. The Administrative Agent may
accept deposits from, lend money to, and generally engage in any kind of trust,
debt, equity or other transaction, in addition to those contemplated by this
Agreement or any other Loan Document, with the Borrower or any of its
Subsidiaries in which the Borrower or such Subsidiary is not restricted hereby
from engaging with any other Person.
57
11.10 Lender Credit Decision. Each Lender acknowledges that it has,
----------------------
independently and without reliance upon the Administrative Agent or any other
Lender and based on the financial statements prepared by the Borrower and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement and the other Loan Documents.
11.11 Successor Administrative Agent. The Administrative Agent may resign
------------------------------
at any time by giving written notice thereof to the Lenders and the Borrower,
and the Administrative Agent shall be deemed to have automatically resigned if
it is no longer a Lender, such resignation in either case to be effective upon
the appointment of a successor Administrative Agent or, if no successor
Administrative Agent has been appointed, forty-five days after the retiring
Administrative Agent gives notice of its intention to resign or ceases to be a
Lender, as the case may be. The Administrative Agent may be removed at any time
with good cause by written notice received by the Administrative Agent from the
Required Lenders, such removal to be effective on the date specified by the
Required Lenders. Upon any such resignation or removal, the Required Lenders
shall have the right to appoint, on behalf of the Borrower and the Lenders and,
provided there exists no Default or Unmatured Default hereunder, with the
consent (nor to be unreasonably withheld) of the Borrower, a successor
Administrative Agent. If no successor Administrative Agent shall have been so
appointed by the Required Lenders within thirty days after the resigning
Administrative Agent's giving notice of its intention to resign, then the
resigning Administrative Agent may appoint, on behalf of the Borrower and the
Lenders and, provided there exists no Default or Unmatured Default hereunder,
with the consent (not to be unreasonably withheld) of the Borrower, a successor
Administrative Agent. If the Administrative Agent has resigned or been removed
and no successor Administrative Agent has been appointed within 45 days, the
Lenders shall perform all the duties of the Administrative Agent hereunder and
the Borrower shall make all payments in respect of the Obligations to the
applicable Lender and for all other purposes shall deal directly with the
Lenders. No successor Administrative Agent shall be deemed to be appointed
hereunder until such successor Administrative Agent has accepted the
appointment. Any such successor Administrative Agent shall be a commercial bank
(or a subsidiary thereof) having capital and retained earnings of at least
$500,000,000, except that if the successor Administrative Agent is a subsidiary
of a bank, such capital and retained earnings requirement shall apply only to
the parent bank. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the resigning or removed Administrative Agent. Upon the
effectiveness of the resignation or removal of the Administrative Agent, the
resigning or removed Administrative Agent and the successor Administrative Agent
shall pro rate any agency fees, and the resigning or removed Administrative
Agent shall be discharged from its duties and obligations hereunder and under
the Loan Documents. After the effectiveness of the resignation or removal of an
Administrative Agent, the provisions of this Article XI shall continue in effect
----------
for the benefit of such Administrative Agent in respect of any actions taken or
omitted to be taken by it while it was acting as the Administrative Agent
hereunder and under the other Loan Documents.
58
11.12 Notice of Defaults. If a Lender becomes aware of a Default or
------------------
Unmatured Default, such Lender shall notify the Administrative Agent of such
fact. Upon receipt of such notice that a Default or Unmatured Default has
occurred, the Administrative Agent shall notify each of the Lenders of such
fact.
11.13 Requests for Approval. If the Administrative Agent requests in
---------------------
writing the consent or approval of a Lender, such Lender shall respond and
either approve or disapprove definitively in writing to the Administrative Agent
within ten Business Days (or sooner if such notice specifies a shorter period
for responses based on Administrative Agent's good faith determination that
circumstances exist warranting its request for an earlier response) after such
written request from the Administrative Agent. If the Lender does not so
respond, that Lender shall be deemed to have approved the request.
11.14 Copies of Documents. Within fifteen Business Days after a request by
-------------------
a Lender to the Administrative Agent for documents furnished to the
Administrative Agent by the Borrower, the Administrative Agent shall provide
copies of such documents to such Lender.
11.15 Defaulting Lenders. At such time as a Lender becomes a Defaulting
Lender, such Defaulting Lender's right to vote on matters which are subject to
the consent or approval of the Required Lenders, each affected Lender or all
Lenders shall be immediately suspended until such time as the Lender is no
longer a Defaulting Lender. If a Defaulting Lender has failed to fund its pro
rata share of any Advance and until such time as such Defaulting Lender
subsequently funds its pro rata share of such Advance, all Obligations owing to
such Defaulting Lender hereunder shall be subordinated in right of payment, as
provided in the following sentence, to the prior payment in full of all
principal of, interest on and fees relating to the Loans funded by the other
Lenders in connection with any such Advance in which the Defaulting Lender has
not funded its pro rata share (such principal, interest and fees being referred
to as "Senior Loans" for the purposes of this section). All amounts paid by the
Borrower and otherwise due to be applied to the Obligations owing to such
Defaulting Lender pursuant to the terms hereof shall be distributed by the
Administrative Agent to the other Lenders in accordance with their respective
pro rata shares (recalculated for the purposes hereof to exclude the Defaulting
Lender) until all Senior Loans have been paid in full. After the Senior Loans
have been paid in full equitable adjustments will be made in connection with
future payments by the Borrower to the extent a portion of the Senior Loans had
been repaid with amounts that otherwise would have been distributed to a
Defaulting Lender but for the operation of this Section 11.15. This provision
-------------
governs only the relationship among the Administrative Agent, each Defaulting
Lender and the other Lenders; nothing hereunder shall limit the obligation of
the Borrower to repay all Loans in accordance with the terms of this Agreement.
The provisions of this section shall apply and be effective regardless of
whether a Default occurs and is continuing, and notwithstanding (i) any other
provision of this Agreement to the contrary, (ii) any instruction of the
Borrower as to its desired application of payments or (iii) the suspension of
such Defaulting Lender's right to vote on matters which are subject to the
consent or approval of the Required Lenders or all Lenders.
59
ARTICLE XII
SETOFF; RATABLE PAYMENTS
12.1 Setoff. In addition to, and without limitation of, any rights of the
------
Lenders under applicable law, if the Borrower becomes insolvent, however
evidenced, or any Default occurs, any and all deposits (including all account
balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by any Lender to
or for the credit or account of the Borrower may be offset and applied toward
the payment of the Obligations owing to such Lender, whether or not the
Obligations, or any part hereof, shall then be due. The Lenders agree for the
benefit of each other Lender (but not the Borrower) that any set-off shall first
be applied to the Obligations before being applied to any other Indebtedness
owing to such Lender.
12.2 Ratable Payments. If any Lender, whether by setoff or otherwise, has
----------------
payment made to it upon its Loans (other than payments received pursuant to
Sections 4.1, 4.2 or 4.4) in a greater proportion than that received by any
------------------------
other Lender, such Lender agrees, promptly upon demand, to purchase a portion of
the Loans held by the other Lenders so that after such purchase each Lender will
hold its ratable proportion of Loans. If any Lender, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligations or such amounts which may be
subject to setoff such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to their Loans. In case any such payment is distorted by legal
process, or otherwise, appropriate further adjustments shall be made.
ARTICLE XIII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
13.1 Successors and Assigns. The terms and provisions of the Loan
----------------------
Documents shall be binding upon and inure to the benefit of the Borrower and the
Lenders and their respective successors and assigns, except that (i) the
Borrower shall not have the right to assign its rights or obligations under the
Loan Documents and (ii) any assignment by any Lender must be made in compliance
with Section 13.3. Notwithstanding clause (ii) of this Section 13.1, any Lender
------------ ------------
may at any time, without the consent of the Borrower or the Administrative
Agent, assign all or any portion of its rights under this Agreement and its
Notes to a Federal Reserve Bank; provided, however, that no such assignment
shall release the transferor Lender from its obligations hereunder. The
Administrative Agent may treat the payee of any Note as the owner thereof for
all purposes hereof unless and until such payee complies with Section 13.3 in
------------
the case of an assignment thereof or, in the case of any other transfer, a
written notice of the transfer is filed with the Administrative Agent. Any
assignee or transferee of a Note agrees by acceptance thereof to be bound by all
the terms and provisions of the Loan Documents. Any request, authority or
consent of any Person, who at the time of making such request or giving such
authority or consent is the holder of any Note, shall be conclusive and binding
on any subsequent holder, transferee or assignee of such Note or of any Note or
Notes issued in exchange therefor.
13.2 Participations.
--------------
60
13.2.1 Permitted Participants; Effect. Any Lender, in the
------------------------------
ordinary course of its business and in accordance with applicable
law, at any time, may sell participating interests in any Loan owing
to such Lender, any Note held by such Lender, any Commitment of such
Lender or any other interest of such Lender under the Loan
Documents. Any Person to whom such a participating interest is sold
is a "Participant". In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's obligations
under the Loan Documents shall remain unchanged, such Lender shall
remain solely responsible to the other parties hereto for the
performance of such obligations, such Lender shall remain the holder
of any such Note for all purposes under the Loan Documents, all
amounts payable by the Borrower under this Agreement shall be
determined as if such Lender had not sold such participating
interests, and the Borrower and the Administrative Agent shall
continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under the Loan Documents.
13.2.2 Voting Rights. Each Lender shall retain the sole right
-------------
to approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other
than any amendment, modification or waiver with respect to any Loan
or Commitment in which such Participant has an interest which
forgives principal, interest or fees or reduces the interest rate or
fees payable with respect to any such Loan or Commitment or
postpones any date fixed for any regularly-scheduled payment of
principal of, or interest or fees on, any such Loan or Commitment or
releases any guarantor of any such Loan or releases any substantial
portion of collateral, if any, securing such Loan.
13.2.3 Benefit of Setoff. The General Partner and the Borrower
-----------------
each agrees that each Participant shall be deemed to have the right
of setoff provided in Section 12.1 in respect of its participating
------------
interest in amounts owing under the Loan Documents to the same
extent as if the amount of its participating interest were owing
directly to it as a Lender under the Loan Documents, provided that
each Lender shall retain the right of setoff provided in Section
-------
12.1 with respect to the amount of participating interests sold to
----
each Participant. The Lenders agree to share with each Participant,
and each Participant, by exercising the right of setoff provided in
Section 12.1, agrees to share with each Lender, any amount received
------------
pursuant to the exercise of its right of setoff, such amounts to be
shared in accordance with Section 12.2 as if each Participant were a
------------
Lender.
13.3 Assignments
-----------
13.3.1 Permitted Assignments. Any Lender, in the ordinary course
---------------------
of its business and in accordance with applicable law, at any time, may
assign all or any portion (greater than or equal to $5,000,000 per
assignee) of its rights and obligations under Loan Documents. Any Person to
whom such rights and obligations are assigned is a "Purchaser". Such
assignment shall be substantially in the form of Exhibit F hereto or in
---------
such other form as may be agreed to by the parties thereto. Any such
assignment made after the initial syndication of the Facility has been
completed by the Arrangers shall also require the consent of the
61
Borrower, which consent shall not be unreasonably withheld, provided
that no consent of the Borrower shall be required if a Default has
occurred and is continuing. If this Facility has been divided into a
revolving credit portion and a term loan portion as provided above,
Lenders may hold and assign different percentages in each such
portion. The consent of the Administrative Agent shall be required
prior to an assignment becoming effective with respect to a
Purchaser which is not a Lender or an Affiliate thereof, which
consent shall not be unreasonably withheld.
13.3.2 Effect; Effective Date. Upon (i) delivery to the
----------------------
Administrative Agent of a notice of assignment, substantially in the
form attached as Exhibit I to Exhibit G hereto (a "Notice of
--------- --------- ---------
Assignment"), together with any consents required by Section 13.3.1,
---------- --------------
and (ii) payment by the assigning Lender of a $3,500 fee to the
Administrative Agent for processing such assignment (unless the
assignment is to an affiliate of the Lender in which case no fee
shall be charged), such assignment shall become effective on the
effective date specified in such Notice of Assignment. The Notice of
Assignment shall contain a representation by the Purchaser to the
effect that none of the consideration used to make the purchase of
the Commitment and Loans under the applicable assignment agreement
are "plan assets" as defined under ERISA and that the rights and
interests of the Purchaser in and under the Loan Documents will not
be "plan assets" under ERISA. On and after the effective date of
such assignment, such Purchaser shall for all purposes be a Lender
party to this Agreement and any other Loan Document executed by the
Lenders and shall have all the rights and obligations of a Lender
under the Loan Documents, to the same extent as if it were an
original party hereto, and no further consent or action by the
Borrower, the Lenders or the Administrative Agent shall be required
to release the transferor Lender with respect to the percentage of
the Aggregate Commitment and Loans assigned to such Purchaser.
Upon the consummation of any assignment to a Purchaser pursuant to
this Section 13.3.2, the transferor Lender, the Administrative Agent
--------------
and the Borrower shall make appropriate arrangements so that
replacement Notes are issued to such transferor Lender and new Notes
or, as appropriate, replacement Notes, are issued to such Purchaser,
in each case in principal amounts reflecting their Commitment, as
adjusted pursuant to such assignment.
13.4 Dissemination of Information. The General Partner and the Borrower
----------------------------
authorize each Lender to disclose to any Participant or Purchaser or any other
Person acquiring an interest in the Loan Documents by operation of law (each a
"Transferee") and any prospective Transferee any and all information in such
----------
Lender's possession concerning the creditworthiness of the General Partner, the
Borrower and their Subsidiaries.
13.5 Tax Treatment. If any interest in any Loan Document is transferred to
-------------
any Transferee which is organized under the laws of any jurisdiction other than
the United States or any State thereof the transferor Lender shall cause such
Transferee, concurrently with the effectiveness of such transfer, to comply with
the provisions of Section 2.22.
------------
62
ARTICLE XIV
NOTICES
14.1 Giving Notice. Except as otherwise permitted by Section 2.17 with
------------- ------------
respect to borrowing notices, all notices and other communications provided to
any party hereto under this Agreement or any other Loan Document shall be in
writing or by telex or by facsimile and addressed or delivered to such party at
its address set forth below its signature hereto or at such other address as may
be designated by such party in a notice to the other parties, and, in the case
of a notice to the General Partner or the Borrower, shall be directed to the
attention of its principal accounting officer. Any notice, if mailed and
properly addressed with postage prepaid, shall be deemed given when received;
any notice, if transmitted by telex or facsimile, shall be deemed given when
transmitted (answerback confirmed in the case of telexes).
14.2 Change of Address. The General Partner, the Borrower, the
-----------------
Administrative Agent and any Lender may each change the address for service of
notice upon it by a notice in writing to the other parties hereto.
ARTICLE XV
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart. This Agreement shall be
effective when it has been executed by the Borrower, the Administrative Agent
and the Lenders and each party has notified the Administrative Agent by telex or
telephone that it has taken such action.
[REMAINDER OF PAGE LEFT BLANK]
63
IN WITNESS WHEREOF, the Borrower, the General Partner, the Lenders and the
Administrative Agent have executed this Agreement as of the date first above
written.
NATIONAL GOLF OPERATING
PARTNERSHIP, LP.
By: National Golf Properties, Inc.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------
Print Name: Xxxxx X. Xxxxxxxx
---------------------------
Title: Vice President - General Counsel
--------------------------------
c/o National Golf Properties, Inc.
0000 00xx Xxxxxx, Xxxxx 0000
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Principal Accounting Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
NATIONAL GOLF PROPERTIES, INC.
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------------------
Print Name: Xxxxx X. Xxxxxxxx
------------------------------
Title: Vice President - General Counsel
------------------------------------
0000 00xx Xxxxxx, Xxxxx 0000
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Principal Accounting Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
64
Commitments:
-----------
$150,000,000 THE FIRST NATIONAL BANK OF CHICAGO,
Individually and as Administrative Agent
By: /s/ Xxx Xxxxxxxx
---------------------------------------
Print Name: Xxx Xxxxxxxx
----------------------------
Title: Managing Director
---------------------------------
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention:
--------------------------------
Telephone: (312) 732-
--------------------
Facsimile: (312) 732-
--------------------
$150,000,000 XXXXXXX XXXXX CAPITAL CORPORATION.
Individually and as Syndication Agent
By: /s/ Xxxxx Xxxxxxxxx
--------------------------------------
Print Name: Xxxxx Xxxxxxxxx
------------------------------
Title: Vice President
-----------------------------------
World Financial Center
North Tower
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
65
