SECURED LINE OF CREDIT LOAN AGREEMENT
By and Between
FRANKLIN SELECT REALTY TRUST,
as Borrower
and
BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION,
as Lender
Dated as of December 10, 1996
LINE OF CREDIT LOAN AGREEMENT
(Secured)
This Line of Credit Loan Agreement (the "Agreement") dated as of
December 10, 1996, is between BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION (the "Bank") and FRANKLIN SELECT REALTY TRUST, a California
corporation (the "Borrower").
WHEREAS, Bank has agreed to provide a line of credit to Borrower
on the terms and conditions set forth herein. Subject to the terms and
conditions of this Agreement, the line of credit is to be revolving and is to
be secured by collateral.
NOW, THEREFORE, in consideration for the mutual covenants and
agreements contained herein, the parties hereto agree as follows:
1. DEFINITIONS
1.1 CERTAIN DEFINED TERMS. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined; other terms are defined
elsewhere in this Agreement):
"ACCOUNTANTS" means Coopers & Xxxxxxx LLP, or any other "big six"
accounting firm or other firm of certified public accountants of national
standing selected by Borrower and acceptable to the Bank.
"AFFILIATE" means, as to any Person, (a) any other Person which,
directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person; or (b) any Person five percent (5%) or
more of the equity interest of which is held beneficially or of record by
such Person. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management
and policies of the other Person, whether through the ownership of voting
securities, partnership or membership interests, by contract, by family
relationship or otherwise.
"APPRAISAL" means a written appraisal of the market value of a Real
Property in its condition existing as of the date of such appraisal
prepared by an independent MAI appraiser acceptable to the Bank in its sole
discretion (which may be the Bank's in-house appraisal department), subject
to the Bank's customary independent appraisal requirements and prepared in
compliance with all Requirements of Law applicable to the Bank, including
FIRREA.
"APPRAISED VALUE" means, as to any Real Property, the market value of
such Real Property as reflected in the then most recent Appraisal of such
Real Property, as the same may have been adjusted by the Bank based upon
its internal review of such Appraisal.
"BANKING DAY" has the meaning given to such term in the Note.
"CLOSING DATE" means the date on which all conditions precedent to the
Bank's obligations set forth in Section 6 shall have been satisfied as
determined by the Bank in its sole distinction.
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time.
"COLLATERAL" means, collectively, the Real Property, the Personal
Property and any other real or personal property in or upon which a Lien is
granted in favor of the Bank, or as to which an assignment for security
purposes is made in favor of the Bank, under this Agreement, the Deeds of
Trust or any other Loan Document.
"COMMITMENT" means the Bank's agreement to make advances to the
Borrower under the Loan in accordance with the terms and conditions of this
Agreement in an aggregate outstanding amount not to exceed the Commitment
Amount.
"COMMITMENT AMOUNT" means Twenty-Five Million Dollars ($25,000,000).
"COMPLIANCE CERTIFICATE" means a certificate in the form of EXHIBIT C
to this Agreement duly completed and executed by a Responsible Officer in
accordance with this Agreement.
"CONTRACTUAL OBLIGATION," as applied to any Person, means any
provision of any securities issued by that Person or any indenture,
mortgage, deed of trust, lease, contract, undertaking, document or
instrument to which that Person is a party or by which it or any of its
properties is bound, or to which it or any of its properties is subject.
"DEBT SERVICE" means, for any period, Interest Expense for such period
PLUS all regularly scheduled principal payments due and payable during such
period on all of the Borrower's Indebtedness.
"DEEDS OF TRUST" means, collectively, the Deeds of Trust with
Assignments of Rents, Security Agreements and Fixture Filings executed,
acknowledged and delivered by the Borrower in favor of the Bank pursuant to
this Agreement and encumbering the Real Property.
"EBITDA" means, for any period, (a) the sum of (i) net income, (ii)
depreciation and amortization expense as shown on the Borrower's financial
statements, (iii) Interest Expense, (iv) taxes imposed by any jurisdiction
upon the Borrower's net income, (v) losses on sales of assets and other
non-recurring expenses, LESS (b) (i) interest income, (ii) dividend income,
and (iii) gains on sales of assets and other non-recurring income, all as
determined on a consolidated basis for the Borrower in accordance with
GAAP.
"EVENT OF DEFAULT" means those events so designated in Section 11 of
this Agreement.
"EXCESS BORROWING CONDITION" has the meaning given to such term in
Section 2.5 of this Agreement.
"EXTENSION OPTION" means the Borrower's right to extend the Maturity
Date in accordance with the provisions of Section 8.1 of this Agreement.
"FAIRWAY CENTER PROPERTY" means that certain improved real property
owned by the Borrower, commonly known as 0000 Xxxx Xxxxxxxx Xxxxxxx, Xxxx,
Xxxxxxxxxx, and more particularly described in EXHIBIT A to this Agreement.
"FIRREA" means the Financial Institutions Recovery, Reform and
Enforcement Act of 1989, as amended from time to time.
"FUNDS FROM OPERATIONS" means, for any period, the Borrower's net
income (computed in accordance with GAAP), excluding gains (or losses) from
debt restructuring and sales of property, PLUS depreciation and
amortization expense, and after adjustments for unconsolidated partnerships
and joint ventures, if any. (Adjustments for unconsolidated partnerships
and joint ventures shall be calculated to reflect funds from operations on
the same basis.)
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board, or in such
other statements by such other entity as may be in general use by
significant segments of the accounting profession, which are applicable to
the circumstances as of the date of determination.
"GOVERNMENTAL AUTHORITY" means any federal, state or local
governmental or quasi-governmental agency, authority, board, bureau,
commission, department, instrumentality or public body, court,
administrative tribunal or public utility.
"GUARANTEED OBLIGATIONS" means, as applied to any Person, any
Indebtedness or other Contractual Obligation or liability, contingent or
otherwise, of another Person in respect of which that Person is liable,
including, without limitation, any such indebtedness, obligation or
liability directly or indirectly guaranteed, endorsed (otherwise than for
collection or deposit in the ordinary course of business), co-made,
discounted or sold with recourse by that Person, or in respect of which
that Person is otherwise directly or indirectly liable, including in
respect of any partnership in which that Person is a general partner,
Contractual Obligations (contingent or otherwise) arising through any
agreement to purchase, repurchase or otherwise acquire such indebtedness,
obligation or liability or any security therefor, or to provide funds for
the payment or discharge thereof (whether in the form of loans, advances,
stock purchases, capital contributions or otherwise), or to maintain
solvency, assets, level of income, or other financial condition, or to make
payment other than for value received.
"HAZARDOUS MATERIALS" means (a) any chemical, material or substance
defined as or included in the definition of "hazardous substances",
"hazardous wastes", "hazardous materials", "extremely hazardous waste",
"restricted hazardous waste" or "toxic substances" or words of similar
import under any applicable local, state or federal law or under the
regulations adopted or publications promulgated pursuant thereto,
including, without limitation, Hazardous Materials Laws; (b) any oil,
petroleum, petroleum derived substance or petroleum products; any flammable
substances or explosives; any radioactive materials; any hazardous wastes
or substances; any toxic wastes or substances or any other similar
materials or pollutants; (c) asbestos, urea formaldehyde or polychlorinated
biphenyls; and (d) any other chemical, material or substance, exposure to
which is prohibited, limited or regulated by any Governmental Authority or
which poses a hazard to the health and safety of the owners, occupants or
any other Persons occupying affected property or any property abutting any
affected property.
"HAZARDOUS MATERIALS LAWS" means all federal, state and local
statutes, ordinances, rules and regulations relating to environmental
matters, including, without limitation, those relating to fines, orders,
injunctions, penalties, damages, contribution, cost recovery, compensation,
losses or injuries resulting from the release of Hazardous Materials and to
the generation, use, storage, transportation or disposal of Hazardous
Materials, in any manner applicable to Borrowers or any of the Properties,
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act (49 U.S.C. ss. 9601 ET SEQ.), the Hazardous
Material Transportation Act (49 U.S.C. ss. 1801 ET SEQ.), the Resource
Conservation and Recovery Act (42 U.S.C. ss. 6901 ET SEQ.), the Federal
Water Pollution Control Act (33 U.S.C. ss. 1251 ET SEQ.), the Clean Air Act
(42 U.S.C. ss. 7401 ET SEQ.), the Toxic Substances Control Act (15 U.S.C.
ss. 2601 ET SEQ.), the Occupational Safety and Health Act (29 U.S.C. ss.
651 ET SEQ.), and the Emergency Planning and Community Right-to-Know Act
(42 U.S.C. ss. 11001 ET SEQ.), each as amended or supplemented, and any
analogous future or present local, state and federal statutes, ordinances,
rules and regulations promulgated pursuant thereto, each as in effect as of
the date of determination.
"IMPUTED LOAN MAXIMUM AMOUNT" means the principal amount of the loan
for which the ratio of the Net Operating Income from all Real Property for
the twelve (12) month period immediately preceding the Closing Date or any
other date for which the Bank shall make such determination to Annual Debt
Service would be equal to 1.35:1, where (a) the per annum interest rate on
such loan were equal to the greater of (i) nine percent (9%) per annum, or
(ii) two and fifty one-hundredths percent (2.50%) per annum, plus the
interest rate as of or about the Closing Date or any other date for which
the Bank shall make such determination on U.S. Treasury securities having a
maturity of ten (10) years, as determined by the Bank in its sole
discretion; (b) such loan provided for monthly principal and interest
payments based upon an amortization of the principal amount thereof over a
twenty-five (25) year period, with interest thereon at the interest rate
specified in the foregoing clause (a); and (c) "Annual Debt Service" means
the principal and interest payments required under such loan for a twelve
(12) month period. The determination of the Imputed Loan Maximum Amount
shall be made by the Bank in its sole discretion as of the Closing Date, as
of each of the dates provided for in Section 9.4(f) below and upon the
occurrence of a Reappraisal Event (as defined below).
"INDEBTEDNESS", as applied to any Person means (a) all indebtedness,
obligations or other liabilities for borrowed money, (b) all indebtedness,
obligations or other liabilities evidenced by notes, bonds, debentures or
other similar instruments, (c) all reimbursement obligations and other
liabilities with respect to letters of credit, banker's acceptances, surety
bonds or similar instruments issued for such Person's account, (d) all
obligations to pay the deferred purchase price of property or services, (e)
all obligations in respect of capital leases, (f) all Guaranteed
Obligations, and (g) all indebtedness, obligations or other liabilities of
such Person or others secured by a Lien on any asset of such Person,
whether or not such indebtedness, obligations or liabilities are assumed
by, or are a personal liability of, such Person (including, without
limitation, the principal amount of any assessment or similar indebtedness
encumbering any asset).
"INTEREST EXPENSE" means, for any period, total interest expense of
the Borrower calculated in accordance with GAAP.
"LEASE" means any lease, rental agreement, occupancy agreement or
other agreement pursuant to which any Person is provided with a right to
occupy or possess all or any portion of a Real Property.
"LEVERAGE" means, at any time, the ratio of (a) Total Liabilities as
of such date, to (b) Total Capital as of such date.
"LIBOR SPREAD" means, with respect to any amount outstanding under the
Loan which bears interest at a rate based upon LIBOR, (a) if the ratio of
the Commitment Amount to the aggregate Appraised Value of the Real Property
as of the Closing Date shall exceed fifty percent (50%), 1.90%, and (b) if
the ratio of the Commitment Amount to the aggregate Appraised Value of the
Real Property as of the Closing Date shall be equal to or less than fifty
percent (50%), 1.75%.
"LIEN" means any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, security interest, encumbrance,
preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever, including without limitation
any conditional sale or other title retention agreement, the interest of a
lessor under a capital lease, any financing lease having substantially the
same economic effect as any of the foregoing, and the filing of any
financing statement or document having similar effect (other than a
financing statement filed by a "true" lessor pursuant to Section 9408 of
the Uniform Commercial Code) naming the owner of the asset to which such
Lien relates as debtor, under the Uniform Commercial Code or other
comparable law of any jurisdiction.
"LOAN" means the secured revolving credit facility and, if the
Borrower exercises the Term Out Option in accordance with this Agreement,
term loan in the Commitment Amount which the Bank has agreed to provide to
the Borrower pursuant to this Agreement.
"LOAN AVAILABILITY" means, at any time, (a) the lowest of (i) the
Commitment Amount, (ii) the Real Property Collateral Value, and (iii) the
Imputed Loan Maximum Amount, less (b) the sum of any Termed Loan Amounts.
"MAJOR LEASE" means any Lease covering twenty-five percent (25%) or
more of the net rentable area of the improvements included in any Real
Property.
"MATERIAL ADVERSE EFFECT" means, with respect to a Person, a material
adverse effect upon the condition (financial or otherwise), operations,
performance or properties of such Person. The phrase "has a Material
Adverse Effect" or "will result in a Material Adverse Effect" or words
substantially similar thereto shall in all cases be intended to mean "has
resulted, or will or could reasonably be anticipated to result, in a
Material Adverse Effect", and the phrase "has no (or does not have a)
Material Adverse Effect" or "will not result in a Material Adverse Effect"
or words substantially similar thereto shall in all cases be intended to
mean "does not or will not or could not reasonably be anticipated to result
in a Material Adverse Effect".
"MATURITY DATE" means December 1, 1998, as the same may be extended in
accordance with this Agreement.
"MINORITY INTEREST" means the interests held by other Persons and
shown as minority interest on the Borrower's financial statements prepared
in accordance with GAAP.
"NDA AGREEMENTS" means the Non-Disturbance and Attornment Agreements
to be executed by the tenants under the Required Leases as a condition to
the Bank's obligations, as provided in this Agreement.
"NET OPERATING INCOME" means, for any Real Property at any time, the
actual cash-basis net operating income of such Real Property for the period
in question, determined on a basis consistent with the operating statements
provided by the Borrower to the Bank prior to the Closing Date, LESS an
amount equal to three percent (3%) of gross rental revenue for such period
for capital expense.
"NORTHPORT PROPERTY" means the improved real property owned by the
Borrower, commonly known as 0000 Xxxxxxx Xxxx, 00000 Xxxxxxxxx Xxxx Xxxx
and 00000 Xxxxxxxxx Xxxx Xxxx, Xxxxxxx, Xxxxxxxxxx, and more particularly
described in EXHIBIT A attached hereto.
"NOTE" means the Promissory Note (Secured by Deeds of Trust) executed
and delivered by the Borrower to the Bank pursuant to this Agreement.
"PERSON" means any natural person, corporation, limited partnership,
general partnership, joint stock company, limited liability company, joint
venture, association, company, trust, bank, trust company, land trust,
business trust or other organization, whether or not a legal entity, or any
Governmental Authority.
"PERSONAL PROPERTY" means any tangible and intangible personal
property of the Borrower in which the Bank shall be granted a Lien pursuant
to the Deeds of Trust or any of the other Loan Documents.
"POTENTIAL DEFAULT" means an event or condition which, with the giving
of notice or the lapse of time, or both, would constitute an Event of
Default if that event or condition were not cured within any applicable
cure period.
"REAL PROPERTY" means, collectively, the Fairway Center Property, the
Northport Property and the Shores Property, all of which, if accepted by
the Bank in its sole discretion, shall be subject to the Lien of a Deed of
Trust granted by Borrower in favor of the Bank pursuant to this Agreement.
"REAL PROPERTY COLLATERAL VALUE" means an amount equal to sixty
percent (60%) multiplied by the aggregate Appraised Value of all Real
Property as of the Closing Date or any other date for which the Bank shall
make such determination.
"REQUIRED LEASES" means each Lease for which the Bank shall require
the tenant thereunder to execute an NDA Agreement as a condition to the
Bank's obligations as provided in this Agreement, which Leases are listed
on EXHIBIT D hereto.
"REQUIREMENTS OF LAW" mean, as any Person, all statutes, ordinances,
rules and regulations of any Governmental Authority applicable to such
Person or its property; any development agreement, subdivision agreement,
improvement agreement, loan agreement, indenture or other agreement or
undertaking with a Governmental Authority to which such Person is a party
or otherwise binding upon such Person; and the provisions of any license,
permit or approval issued by a Governmental Authority and applicable to
such Person or its properties.
"RESPONSIBLE OFFICER" means (a) the chief executive officer or the
president of the Borrower; (b) with respect to compliance with financial
covenants, the chief financial officer of the Borrower; or (c) any other
officer of the Borrower approved as a "Responsible Officer" by the Bank.
"SHORES PROPERTY" means the improved real property owned by the
Borrower, commonly known as 1 and 0 Xxxx Xxxxxxx Xxxxx and 000 Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxx Xxxx, Xxxxxxxxxx, and more particularly described in
EXHIBIT A attached hereto.
"TANGIBLE NET WORTH" means, at any time, shareholders' equity, as
shown on the Borrower's financial statements prepared in accordance with
GAAP, MINUS intangible assets.
"TERM OUT OPTION" means the Borrower's right to convert all or a
portion or portions of the line of credit into a term loan in accordance
with the provisions of Section 8.2 of this Agreement.
"TERMED LOAN AMOUNT" means each portion of the Loan for which the
Borrower shall exercise the Term Out Option in accordance with the
provisions of Section 8.2 of this Agreement.
"TOTAL ASSETS" means, at any time, the book value (net of any
applicable reserves) of all tangible assets of the Borrower as shown on its
most recent quarterly financial statements prepared in accordance with
GAAP.
"TOTAL CAPITAL" means, at any time, an amount equal to the sum of (a)
Total Liabilities as of such date, PLUS (b) Tangible Net Worth as of such
date, PLUS (c) Minority Interest as of such date.
"TOTAL LIABILITIES" means (a) all liabilities of the Borrower shown on
the balance sheet of the Borrower prepared in accordance with GAAP, PLUS
(b) all Guaranteed Obligations and all contingent liabilities of the
Borrower that would be disclosed in accordance with GAAP.
"UNSECURED INDEMNITY AGREEMENT" means the Indemnity Agreement
(Borrower) to be executed by the Borrower in favor of the Bank pursuant to
this Agreement.
"UPREIT" means any limited partnership formed by the Borrower as
general partner and other Persons to own and operate the Real Property, and
to which the Borrower shall have the right to transfer title to the Real
Property in accordance with the provisions of Section 8.3 of this
Agreement.
1.2 COMPUTATION OF TIME PERIODS. In this Agreement, in the computation of
periods of time from a specified date to a later specified date, the word "from"
means "from and including" and the words "to" and "until" shall mean "to and not
including." Periods of days referred to in this Agreement shall be counted in
calendar days unless Banking Days are expressly prescribed.
1.3 ACCOUNTING TERMS. Any accounting terms used in this Agreement which are
not specifically defined herein shall have the meanings customarily given to
such terms in accordance with GAAP.
2. LINE OF CREDIT AMOUNT AND TERMS
2.1 LINE OF CREDIT AMOUNT.
(a) Subject to the terms and conditions contained in this
Agreement, the Bank hereby agrees to make advances under the Loan to the
Borrower from time to time during the Availability Period (as defined below)
in an aggregate principal amount not to exceed at any time the Loan
Availability.
(b) Except as otherwise provided in this Agreement, the Loan is
a revolving line of credit. During the Availability Period, subject to the
provisions of this Agreement and the other Loan Documents (as defined below),
the Borrower may from time to time repay principal amounts and reborrow such
principal amounts.
(c) Each advance must be for at least One Million Dollars
($1,000,000), or for the amount of the remaining available under the line of
credit, if less.
2.2 AVAILABILITY PERIOD.
The line of credit is available (the "Availability Period")
between the Closing Date and the Maturity Date. The Bank shall have no
obligation to make advances under the line of credit following the occurrence
and during the continuance of an Event of Default or Potential Default.
2.3 INTEREST RATE.
Borrower is executing the Note in the Commitment Amount
evidencing the Loan and payable to the Bank. The Note sets forth the
interest rates, the payment terms and certain other terms and conditions
applicable to the Loan.
2.4 LOAN DOCUMENTS.
The "Loan Documents" are the documents indicated below, each
dated as of the date of this Agreement unless indicated otherwise. A
capitalized term used in this Agreement but not defined herein has the
meaning given in the other Loan Documents.
(a) This Agreement;
(b) The Note;
(c) The Deeds of Trust;
(d) State of California Uniform Commercial Code Financing
Statement Form UCC-1, executed by Borrower as debtor;
(e) Unsecured Indemnity Agreement;
(f) NDA Agreements executed by the tenants under the Required
Leases; and
(g) Corporate Resolution to borrow certified by the Corporate
Secretary of the Borrower. The Corporate Resolution shall also contain a
Certificate of Incumbency for the authorized signing officers, containing
their specimen signatures and certified by the Corporate Secretary.
2.5 EXCESS BORROWING CONDITION.
The Borrower agrees not to permit the outstanding principal
balance of the Loan to exceed the lowest of (i) the Commitment Amount, (ii)
the Real Property Collateral Value or (iii) the Imputed Loan Maximum Amount.
If at any time and for any reason the outstanding principal balance of the
Loan shall exceed such amount ("Excess Borrowing Condition"), the Borrower
shall cause such Excess Borrowing Condition to be eliminated not later than
three (3) days following the date of written notice thereof from the Bank to
the Borrower, by repaying to the Bank an amount on account of the Loan
sufficient to eliminate such Excess Borrowing Condition. The failure by the
Borrower to do so shall constitute an Event of Default without further notice
or opportunity to cure hereunder. No further advances under the line of
credit shall be permitted so long as such Excess Borrowing Condition shall
continue to exist. Nothing contained in this section shall excuse the
Borrower's compliance with all terms, conditions, covenants and other
obligations imposed upon the Borrower under this Agreement or the other Loan
Documents during the period of any Excess Borrowing Condition, nor in any
manner condition or impair the Bank's rights with respect to any such breach
thereof by the Borrower.
3. FEES, EXPENSES
3.1 FEES.
(a) COMMITMENT FEE. The Borrower agrees to pay to the Bank a
fee equal to 0.5% of the Commitment Amount, payable in advance. This fee is
due on the Closing Date and shall be nonrefundable.
(b) UNUSED COMMITMENT FEE. The Borrower agrees to pay to the
Bank a fee on any difference between the Commitment Amount and the amount of
credit it actually uses, determined by the weighted average Loan balance
maintained during the specified period. The fee will be calculated at 0.25%
per year. This fee is due quarterly in arrears and on the date of the
expiration of the Availability Period.
3.2 EXPENSES AND COSTS.
(a) Borrower shall pay all reasonable costs and expenses
incurred by Bank in connection with the making, disbursement and
administration of the Loan, and in the exercise of any of Bank's rights or
remedies under the Loan Documents. Such costs and expenses include title
insurance, recording and escrow charges, fees for Appraisals, environmental
services, legal fees and expenses of Bank's counsel and any other reasonable
fees and costs for services, regardless of whether such services are
furnished by Bank's employees or by independent contractors. Borrower
acknowledges that the fees payable to Bank as provided above do not include
amounts payable by Borrower under this Section 3.2.
(b) The Borrower agrees to indemnify the Bank from and hold it
harmless against any transfer taxes, documentary and mortgage taxes,
assessments or charges imposed by any governmental authority by reason of the
execution, delivery and performance of the Loan Documents, the Loan and
security therefor. Borrower's obligations under this Section 3.2 shall
survive payment of the Loan and assignment of any rights hereunder.
4. REAL PROPERTY VALUE
4.1 ACCEPTANCE, DETERMINATIONS.
(a) The decision of whether or not the Bank will accept any
Real Property as Collateral shall be made by the Bank in its sole
discretion. The Borrower shall have the right from time to time to propose
additional real property as collateral for the Loan. The decision of whether
to accept such additional real property, and, if the Bank decides to accept
such additional real property, the terms and conditions of the Bank's
acceptance, shall be made by the Bank in its sole discretion.
(b) All other determinations to be made with respect to the
Real Property, including, without limitation, the determinations of the Real
Property Collateral Value, the Imputed Loan Maximum Amount, the Appraised
Values and the LIBOR Spread, shall be made by the Bank in its sole
discretion. Without limiting the foregoing, the Real Property Collateral
Value as of the Closing Date or any other date shall be established on the
basis of the Appraised Value of the Real Property as of such date, as
determined by the Bank in its sole discretion.
4.2 ADDITIONAL VALUE DETERMINATIONS.
(a) In addition to the Bank's determination of the Appraised
Value of the Real Property as of the Closing Date as provided above, the Bank
shall have the right to redetermine the Appraised Value of the Real Property
on the basis of new Appraisals of the Real Property or any portion thereof
obtained by the Bank under each of the following circumstances: (i) upon any
exercise by Borrower of the Term Out Option, if the value date used in any of
the most recent Appraisals of the Real Property is more than twelve (12)
months prior to such date; (ii) upon the Borrower's exercise of the Extension
Option, if the value date used in any of the most recent Appraisals of the
Real Property is more than twelve (12) months prior to such date; (iii) if
necessary in order to enable the Bank to comply with any Requirements of Law
applicable to the Bank, including, without limitation, FIRREA; or (iv) upon
the occurrence of a Reappraisal Event (as defined below), provided that in
such event, the Bank shall have the right to obtain new Appraisals only on
(A) the Real Property subject to the Reappraisal Event, and (B) any other
Real Property if the value date used in the most recent Appraisal of such
Real Property is more than twelve (12) months prior to the date the Bank
receives written notice of the Reappraisal Event.
(b) Subject to subparagraph (c) below, upon the Bank's
redetermination of the Appraised Value of the Real Property under
subparagraph (a) above, the Loan Availability shall be adjusted, if
necessary, on the basis of the resulting Real Property Collateral Value. If
any change in the Real Property Collateral Value shall cause the occurrence
of an Excess Borrowing Condition, the Borrower shall cause such excess
Borrowing Condition to be eliminated as provided in Section 2.5 above.
(c) Upon the occurrence of a Reappraisal Event with respect to
any Real Property, if the Bank shall require that the Appraised Value of such
Real Property and/or any other Real Property be redetermined under
subparagraph (a) above, and if the Bank shall be prevented from causing such
Appraised Value to be redetermined within forty-five (45) days following the
Bank's notice thereof to the Borrower through no fault of the Bank, then
effective as of the expiration of such 45-day period and until the date on
which such Appraised Value shall have been redetermined by the Bank in its
sole discretion, (i) for purposes of the Real Property Collateral Value, the
Real Property subject to the Reappraisal Event shall have an Appraised Value
of zero, and (ii) for purposes of the Imputed Loan Maximum Amount, the Net
Operating Income from the Real Property subject to the Reappraisal Event
shall not be included. The Bank shall redetermine the Real Property
Collateral Value and the Imputed Loan Maximum Amount as of the date of such
notice by the Bank to the Borrower, and the Loan Availability shall be
adjusted, if necessary, to account for any change in the Real Property
Collateral Value and/or the Imputed Loan Maximum Amount. The Borrower shall
continue to have the right to request advances under the Loan following a
Reappraisal Event, subject to the adjusted Loan Availability. If any change
in the Real Property Collateral Value and/or Imputed Loan Maximum Amount
shall cause the occurrence of an Excess Borrowing Condition, the Borrower
shall cause such Excess Borrowing Condition to be eliminated as provided in
Section 2.5 above. Upon the Bank's redetermination of the Appraised Value of
the Real Property subject to the Reappraisal Event and, if applicable, other
Real Property under subparagraph (a) above, the Bank shall also redetermine
the Real Property Collateral Value by using the new Appraised Value, and the
Imputed Loan Maximum Amount by including the Net Operating Income from the
Real Property subject to the Reappraisal Event. The Loan Availability shall
then be adjusted again, if necessary, and the Borrower shall be entitled to
request advances under the Loan, subject to the adjusted Loan Availability.
(d) Upon the occurrence of a Reappraisal Event, the Borrower
may propose to provide the Bank with other real property or other collateral
("Replacement Collateral") for the Loan in replacement of the Real Property
subject to such Reappraisal Event. Any such Replacement Collateral shall be
acceptable to the Bank in its sole discretion, and the Bank's acceptance
thereof shall be subject to a satisfactory Appraisal and such other
conditions as the Bank may require, including, without limitation, that the
Bank receive a first priority Lien on such Replacement Collateral as security
for the Loan.
(e) For the purposes of this Agreement, "Reappraisal Event"
shall mean the occurrence of any one of the following events or circumstances
with respect to any Real Property: (i) a major casualty or a taking in
condemnation or under threat of condemnation; (ii) a tenant under a Major
Lease shall become insolvent or shall otherwise default under its Lease; or
(iii) the discovery of Hazardous Materials in, on, under or about the Real
Property or the soils or groundwaters thereof, and the Bank's determination,
in its sole discretion, that the costs of investigation, characterization,
remediation and/or monitoring of such Hazardous Materials in compliance with
Hazardous Materials Laws would equal or exceed twenty-five percent (25%) of
the then-current Appraised Value of such Real Property.
5. DISBURSEMENTS, PAYMENTS, COSTS
5.1 REQUESTS FOR CREDIT.
(a) BORROWING NOTICE. Each request by the Borrower for an
advance under the line of credit shall be made by irrevocable written notice
of Borrower (including notice via facsimile confirmed by a mailed copy)
pursuant to a Borrowing Notice in the form attached hereto as EXHIBIT B as
follows:
(i) Each Borrowing Notice shall contain a certification
from a Responsible Officer or an authorized representative of the
Borrower that (A) no Event of Default or Potential Default, after
giving effect to the requested borrowing, will exist, (B) the aggregate
outstanding balance of the line of credit after giving effect to the
requested borrowing will not exceed the Loan Availability, and (C) the
proceeds from the requested borrowing will be used only for purposes
permitted under the Agreement. The truth and accuracy of the
certification made in the Borrowing Notice shall be a condition
precedent to Bank's obligation to make to the Borrower the advance
requested thereunder.
(ii) Each Borrowing Notice shall be submitted to and
received by Bank prior to 9:00 a.m. (California time) on the Banking
Day specified as the borrowing date.
(iii) The Borrower hereby authorizes the Responsible
Officers whose names and specimen signatures are set forth below to
execute and deliver to the Bank Borrowing Notices in accordance with
this Agreement:
Responsible Officers
AUTHORIZED REPRESENTATIVES SPECIMEN SIGNATURES
Xxxxx X. Xxxx _____________________________
Xxxx X. XxxXxxx _____________________________
(b) ADDITIONAL CONDITIONS TO DISBURSEMENT. Each advance by the
Bank under the line of credit, including the first one, shall be conditioned
upon the Bank's receipt of such additional documents and information as the
Bank may require, in form and content satisfactory to Bank.
5.2 DISBURSEMENT AND PAYMENT RECORDS.
Each disbursement by the Bank and each payment by the Borrower
will be evidenced by records kept by the Bank.
5.3 AUTHORIZATION.
(a) The Bank may honor telefax or mailed instructions for
advances or repayments (or for the designation of any optional interest rates
that may be permitted by the Note) given by any one of the individuals
authorized to sign Loan Documents on behalf of the Borrower, or any other
individual designated by any one of such authorized signers.
(b) Advances will be deposited in and repayments will be
withdrawn from the Borrower's account number 14220-01705 ("Account"), or such
other of the Borrower's accounts with the Bank as designated in writing by
the Borrower.
(c) The Borrower indemnifies and releases the Bank (including
its officers, employees, and agents) from all liability, loss, costs, claims
and damages in connection with any act resulting from any instructions Bank
reasonably believes are made by any individual authorized by the Borrower to
give such instructions. This indemnity and release shall survive this
Agreement's termination.
5.4 DIRECT DEBIT TO LINE OF CREDIT.
(a) The Borrower agrees that the Bank may create advances under
the line of credit to pay interest and any fees that are due under the Loan
Documents.
(b) The Bank will create such advances on the dates the
payments become due. If a due date does not fall on a Banking Day, the Bank
will create the advance on the first Banking Day following the due date.
(c) If the creation of an advance under the line of credit
causes an Excess Borrowing Condition, the Borrower shall immediately cause
the Excess Borrowing Condition to be eliminated.
5.5 PAYMENTS.
Borrower hereby authorizes and requests Bank to use Loan funds to
pay Loan fees owing to Bank, interest on the Loan, legal fees and expenses of
Bank's attorneys which are payable by Borrower, and such other sums as may be
owing from time to time by notice to or authorization by Borrower. Bank at
its option may make any such payment on Borrower's behalf by debiting the
Loan itself. Alternatively, Bank may disburse all or part of the payment
amount into the Account, and then may either debit the Account or invoice
Borrower in the amount of the payment. In the event such disbursement under
the line of credit causes an Excess Borrowing Condition, the Borrower shall
immediately cause the Excess Borrowing Condition to be eliminated.
5.6 BANKING DAYS.
All payments and disbursements which would be due on a day which
is not a Banking Day will be due on the next Banking Day. All payments
received on a day which is not a Banking Day will be applied to the Loan on
the next Banking Day.
6. CONDITIONS
The Bank's obligations under this Agreement are subject to the
Bank's receipt, on or before December 15, 1996, of the following items, in
form and content acceptable to the Bank in its sole discretion, and the
satisfaction as of such date, of the following additional conditions
precedent:
6.1 AUTHORIZATIONS.
The Bank shall have received evidence that the execution,
delivery and performance by the Borrower of the Loan Documents have been duly
authorized.
6.2 GOVERNING DOCUMENTS; GOOD STANDING CERTIFICATES.ERTIFICATES
The Bank shall have received a copy of the Borrower's articles of
incorporation, together with a certificate of good standing for the Borrower
from the state where formed and from any other state in which the Borrower is
required to qualify to conduct its business.
6.3 LOAN DOCUMENTS.
The Bank shall have received duly executed Loan Documents.
6.4 EVIDENCE OF PRIORITY; TITLE INSURANCE.
(a) The Bank shall have received evidence that the Liens in
favor of the Bank under the Loan Documents are valid, enforceable, and prior
to all others' rights and interests, except those the Bank consents to in
writing, including those shown in the Title Policies (as defined below).
(b) The Bank shall have received 1970 ALTA extended coverage
lender's title insurance policies in form and issued by a title company
satisfactory to Bank in the Commitment Amount ("Title Policies"), showing
Borrower as the owner of the fee estate in and to the Real Property, and
insuring the Bank that the Deeds of Trust constitute first priority Liens on
the Real Property, subject to no exceptions except as otherwise approved by
Bank in writing, with such endorsements as may be required by Bank; and
(c) The Bank shall have received an ALTA survey of the Real
Property meeting Bank's customary requirements.
6.5 INSURANCE.
The Bank shall have received evidence of insurance coverage
required by the Loan Documents.
6.6 ENVIRONMENTAL QUESTIONNAIRE.
The Bank shall have received a completed Bank form Environmental
Questionnaire and Disclosure Statement, together with an environmental site
assessment of the Real Property, acceptable to Bank, concerning any potential
toxic or hazardous conditions.
6.7 APPRAISAL.
The Bank shall have completed Appraisals of the Real Property,
which Appraisals shall be satisfactory in all respects to Bank.
6.8 PAYMENT OF FEES.
The Bank shall have received payment of all accrued and unpaid
fees and expenses payable to the Bank as provided for by the Loan Documents.
6.9 ENGINEERING.
The Bank shall have received structural reports on all Real
Property.
6.10 CREDIT.
The Bank shall have satisfactorily completed its credit approval
process on the Borrower.
6.11 OTHER ITEMS.
The Bank shall have received any other documents and other items
Bank may reasonably require as conditions precedent to this Agreement.
6.12 NO DEFAULT.
No Event of Default or Potential Default shall exist.
6.13 MATERIAL ADVERSE CHANGES.
No change in the Borrower or any Real Property shall have
occurred which has a Material Adverse Effect, as determined by the Bank.
6.14 REPRESENTATIONS AND WARRANTIES.
All representations and warranties of the Borrower contained in
this Agreement or the other Loan Documents shall be true and correct.
6.15 LEASES.
The Bank shall have reviewed and approved all Leases.
7. REPRESENTATIONS AND WARRANTIES
When the Borrower signs this Agreement, and until all indebtedness and
obligations of the Borrower under the Loan Documents shall be fully
satisfied, the Borrower makes the following representations and warranties to
the Bank. Each request by the Borrower for an advance under the line of
credit constitutes a renewed representation and warranty.
7.1 ORGANIZATION OF BORROWER; GOOD STANDING.
The Borrower is a corporation duly formed and validly existing
under the laws of the State of California. In each state in which the
Borrower does business, it is properly licensed, in good standing, and, where
required, in compliance with any fictitious name statute.
7.2 AUTHORIZATION; ENFORCEABLE AGREEMENT.
This Agreement and the other Loan Documents are within the
Borrower's powers, have been duly authorized, and do not conflict with any of
its organizational documents. The Loan Documents do not conflict with any
law, agreement, or obligation by which the Borrower is bound. This Agreement
is a legal, valid and binding obligation of the Borrower, enforceable against
the Borrower in accordance with its terms, and any instrument or document
required hereunder, when executed and delivered, will be similarly legal,
valid, binding and enforceable, subject in each case to bankruptcy,
insolvency, reorganization, arrangement, moratorium and other loans of
general applicability relating to or affecting creditor's rights and to
general principles of equity.
7.3 FINANCIAL INFORMATION.
(a) The Form 10-Q Quarterly Report filed by the Borrower with
the Securities and Exchange Commission for the period ending September 30,
1996, and the Form 8-K Current Report filed by the Borrower with the
Securities and Exchange Commission for the period ending October 31, 1996,
copies of which have been delivered by the Borrower to the Bank, and all
other financial statements and data submitted in writing by the Borrower to
the Bank in connection with the Borrower's request for the Loan, are true,
correct and complete, and all such financial information presents fairly the
financial condition of the Borrower as of the date thereof and the results of
the operations of the Borrower for the period covered thereby, and has been
prepared in accordance with GAAP on a basis consistently applied. The
Borrower has no knowledge of any material liabilities, contingent or
otherwise, at said date not reflected in said financial information and the
Borrower has not entered into any material commitments or material contracts
which are not reflected in said financial information which may have a
Material Adverse Effect on the Borrower. Since said date there have been no
material changes in the assets or liabilities or financial condition of the
Borrower other than changes in the ordinary course of business, and no such
changes have been materially adverse changes.
(b) All financial and other information that has been or will
be supplied to the Bank, including the financial statements of the Borrower:
(i) is sufficiently complete to give the Bank accurate
knowledge of the subject's financial condition;
(ii) is in form and content as required by the Bank;
(iii) is in compliance with any government regulations that
apply; and
(iv) does not fail to state any material facts necessary
to make the information contained therein not misleading.
All such information was and will be prepared in accordance with GAAP, unless
otherwise noted.
7.4 LAWSUITS.
There is no lawsuit, arbitration, claim or other dispute pending
or threatened against the Borrower which, if lost, would materially impair
the Borrower's financial condition or ability to repay the Loan, except as
has been previously disclosed in writing to the Bank.
7.5 TITLE TO ASSETS.
The Borrower has good and clear title to its assets, and the same
are not subject to any Liens other than those permitted by Bank in writing,
including those shown in the Title Policies.
7.6 COLLATERAL.
All Collateral required by this Agreement is owned by the grantor
of the security interest free of any title defects or any Liens or interests
of others, except as may have been permitted by the Bank in writing.
7.7 PERMITS, FRANCHISES.
The Borrower possesses all permits, franchises, contracts and
licenses required and all trademark rights, trade name rights, and fictitious
name rights necessary to enable it to conduct the business in which it is now
engaged, the failure by the Borrower to possess which would have a Material
Adverse Effect upon the Borrower or its business.
7.8 INCOME TAX RETURNS.
The Borrower has filed all tax returns and reports required to be
filed and has paid all applicable federal, state and local franchise, income
and property taxes which are due and payable. The Borrower has no knowledge
of any pending assessments or adjustments of its income taxes or property
taxes for any year, except as have been disclosed in writing to the Bank.
Borrower is not a "foreign person" within the meaning of Section 1445(f)(3)
of the Code.
7.9 ERISA PLANS.
(a) As used herein, (i) "ERISA" means the Employee Retirement
Income Act of 1974, as amended; (ii) "PBGC" means the Pension Benefit
Guaranty Corporation established pursuant to ERISA; and (iii) "Plan" means
any employee pension benefit plan maintained or contributed to by the
Borrower and insured by the PBGC.
(b) The Borrower has fulfilled its obligations, if any, under
the minimum funding standards of ERISA and the Code with respect to each Plan
and is in compliance in all material respects with the presently applicable
provisions of ERISA and the Code, and has not incurred any liability with
respect to any Plan under Title IV of ERISA.
(c) No reportable event has occurred under Section 4043(b) of
ERISA for which the PBGC requires 30 day notice. No action by the Borrower
to terminate or withdraw from any Plan has been taken and no notice of intent
to terminate a Plan has been filed under Section 4041 of ERISA. No
proceeding has been commenced with respect to a Plan under Section 4042 of
ERISA, and no event has occurred or condition exists which might constitute
grounds for the commencement of such a proceeding.
7.10 OTHER OBLIGATIONS.
The Borrower is not in default on any material Indebtedness or
Contractual Obligation of the Borrower.
7.11 NO EVENT OF DEFAULT.
There is no Event of Default or Potential Default under the Loan
Documents.
7.12 LOCATION OF BORROWER.
The Borrower's place of business (or, if the Borrower has more
than one place of business, its chief executive office) is located at the
address listed under the Borrower's signature on this Agreement.
7.13 STATUS AS A REIT.
The Borrower (i) is a real estate investment trust as defined in
Section 856 of the Code (or any successor provision thereto), (ii) has not
revoked its election to be a real estate investment trust, (iii) has not
engaged in any "prohibited transactions" as defined in Section 856(b)(6)(iii)
of the Code (or any successor provision thereto), and (iv) for its current
"tax year" (as defined in the Code) is and for all prior tax years subsequent
to its election to be a real estate investment trust has been entitled to a
dividends paid deduction which meets the requirements of Section 857 of the
Code.
8. BORROWER OPTIONS
8.1 EXTENSION OPTION.
Provided that no Event of Default or Potential Default shall have
occurred at any time prior to the Borrower's attempted exercise of such
right, the Borrower shall have the right to extend ("Extension Option") the
term of the Loan and the Availability Period from the Maturity Date to the
date twelve (12) months following the Maturity Date ("Extended Maturity
Date"), provided that each of the following conditions shall have been
satisfied:
(a) The Borrower shall provide the Bank with written notice of
the Borrower's request to exercise the Extension Option not more than ninety
(90) days or less than thirty (30) days prior to the Maturity Date;
(b) On or before the Maturity Date, the Borrower shall pay to
the Bank an extension fee in immediately available funds in the amount of
.25% of the Commitment Amount;
(c) No Event of Default or Potential Default shall exist as of
the Maturity Date;
(d) The Borrower shall execute all documents reasonably
required by the Bank in order to exercise the Extension Option, and shall
deliver to the Bank, such title insurance endorsements as the Bank shall
require;
(e) There shall have occurred no change since the Closing Date,
as determined by the Bank in its sole discretion, which could have a Material
Adverse Effect on the Borrower or any Real Property; and
(f) If the Bank, in its sole discretion, shall require, the
Bank shall have obtained new Appraisals of the Real Property in accordance
with Section 4.2(a)(ii) above, the Loan Availability shall be adjusted by
reason thereof, and the outstanding principal balance of the line of credit
as of the Maturity Date shall not exceed the adjusted Loan Availability.
8.2 TERM OUT OPTION.
(a) Provided that no Event of Default or Potential Default
shall have occurred on more than one occasion at any time prior to the
Borrower's attempted exercise of such right, and at any time during the
initial term of the Loan, the Borrower shall have the right, exercisable on
not more than three (3) occasions ("Term Out Option"), to borrow all or a
portion of the amount remaining available for disbursement under the line of
credit at such time as, and/or to convert all or a portion of the amount
outstanding under the line of credit at such time into, a term loan on the
terms and conditions hereinafter provided for. Each amount so borrowed
and/or converted by the Borrower is referred to herein as a "Termed Loan
Amount."
(b) If the Borrower shall desire to exercise the Term Out
Option, the Borrower shall give written notice thereof to the Bank. The
Borrower shall not be entitled to exercise the Term Out Option as to a
principal amount of less than Five Million Dollars ($5,000,000). The term of
any Termed Loan Amount shall expire on the Banking Day selected by the
Borrower in its notice of exercise of the Term Out Option, which shall be a
day on or before five (5) years following the date of such notice. If the
Borrower shall validly exercise the Term Out Option, and subject to the
satisfaction of the conditions provided for in subparagraph (d) below, the
Borrower's borrowing as, and/or conversion of, all or a portion of the Loan
into a Termed Loan Amount shall become effective on the Banking Day as of
which such conditions shall have been satisfied, as confirmed by the Bank to
the Borrower in writing.
(c) Each Termed Loan Amount shall bear interest at the per
annum interest rates applicable to the Loan as provided in the Note. The
Borrower shall pay to the Bank the principal amount of a Termed Loan Amount,
and all accrued interest thereon in monthly installments of principal and
interest. The principal portion of such monthly installments shall be based
upon an amortization of the Termed Loan Amount over a twenty-five (25) year
period, with interest thereon at a per annum rate of nine percent (9%); and
the interest portion of such monthly installments shall be equal to all
accrued and unpaid interest on the outstanding principal balance of the
Termed Loan Amount (and not the interest portion of each installment set
forth in the foregoing amortization schedule). Such monthly installments
shall be payable at the times and in the manner provided for in the Note for
monthly interest payments under the line of credit. Subject to the Bank's
rights to accelerate the Loan as provided in the Loan Documents, each Termed
Loan Amount shall mature on the date for such Termed Loan Amount provided for
in subparagraph (b) above, notwithstanding the fact that the Maturity Date
may occur on an earlier date. The Loan Availability, and the portion of the
Loan made available to the Borrower on a revolving credit basis, shall be
reduced by an amount equal to each Termed Loan Amount. If at any time, the
sum of the outstanding principal amounts of the Termed Loan Amounts and the
amount outstanding under the line of credit shall exceed the lowest of
(i) the Commitment Amount, (ii) the Real Property Collateral value, and (iii)
the Imputed Loan Maximum Amount, such occurrence shall be an Excess Borrowing
Condition, and the Borrower shall cause such Excess Borrowing Condition to be
eliminated as provided in Section 2.5 above.
(d) The Borrower's right to exercise the Term Out Option shall
be subject to the satisfaction of the following conditions: (i) concurrently
with the Borrower's delivery of each notice of exercise of the Term Out
Option, the Borrower shall pay to the Bank a fee in immediately available
funds in the amount of .50% of such Termed Loan Amount; (ii) no Event of
Default or Potential Default shall exist as of the effective date of the
borrowing and/or conversion of such Termed Loan Amount as provided in
subparagraph (b); (iii) the Borrower shall execute all documents reasonably
required by the Bank in order to exercise the Term Out Option, and shall
deliver to the Bank, at the Borrower's sole cost and expense, such title
insurance endorsements as the Bank shall require; (iv) there shall have
occurred no change since the Closing Date, as determined by the Bank in its
sole discretion, which could have a Material Adverse Effect on the Borrower
or any Real Property; and (v) if the Bank, in its sole discretion, shall
require, the Bank shall have obtained new Appraisals of the Real Property in
accordance with Section 4.2(a)(i) above, the Loan Availability shall be
adjusted by reason thereof and the outstanding principal balance of the Loan
shall not exceed the lowest of (a) the Commitment Amount; (b) the Real
Property Collateral Value; or (c) the Imported Loan Maximum Amount (taking
into account such Termed Loan Amount).
8.3 UPREIT XXXXXXXX.XX TRANSFER
Notwithstanding anything to the contrary contained in the Loan
Documents, including the Deeds of Trust, the Borrower shall have the right to
transfer title to the Real Property to the UPREIT ("UPREIT Transfer"), and
the Bank shall not accelerate the Maturity Date or other date for payment in
full of the Loan by reason thereof, provided that each of the following
conditions shall have been satisfied:
(a) The Borrower shall provide the Bank with written notice of
the Borrower's intent to make the UPREIT Transfer not less than forty-five
(45) days prior to the intended effective date thereof;
(b) The Bank shall have reviewed and approved the
organizational documents for the UPREIT, and shall have received such
certificates, authorizations and legal opinions with respect to the UPREIT as
the Bank shall require;
(c) The Borrower and the UPREIT shall execute all documents
reasonably required by the Bank in connection with the UPREIT Transfer,
including, without limitation, assumption agreements and guarantees, and
shall deliver to the Bank, at the Borrower's sole cost and expense, such
title endorsements as the Bank shall require; and
(d) There shall have occurred no change since the Closing Date,
as determined by the Bank in its sole discretion, which could have a Material
Adverse Effect on the Borrower or any Real Property.
9. COVENANTS
The Borrower agrees that, until all indebtedness and obligations of
Borrower under the Loan Documents shall be fully satisfied:
9.1 USE OF PROCEEDS.
The Borrower shall use the proceeds of the advances made by the
Bank under the Loan primarily for the acquisition of and investment in
commercial real properties, and for general working capital purposes.
9.2 FINANCIAL INFORMATION.
The Borrower shall provide to the Bank the following financial
information and statements and such additional information as requested by
the Bank from time to time:
(a) As soon as available but not later than 90 days after the
Borrower's fiscal year end, the Borrower's annual financial statements
including balance sheet, income statement, statement of stockholders' equity
and source and use of funds statement. These financial statements must be
audited (with an unqualified opinion) by the Accountants. The statements
shall be prepared on a consolidated basis in accordance with GAAP.
(b) As soon as available but not later than 60 days after the
period's end, the Borrower's quarterly financial statements, including
balance sheet, income statement, statement of stockholders' equity and source
and use of funds statement. These financial statements may be Borrower
prepared and must be certified by a Responsible Officer. The statements
shall be prepared on a consolidated basis in accordance with GAAP.
(c) As soon as available but not later than 90 days after the
Borrower's fiscal year end, cash flow statement projections for Borrower for
the succeeding fiscal year, detailing expected sources and uses of cash for
such fiscal year;
(d) As soon as available but not later than 60 days after the
end of each fiscal quarter, operating statements which detail operating
results on a month-by-month basis for the Real Property for the twelve (12)
month period ending as of the end of such quarter; rent rolls; and lease
status reports for each Real Property, prepared in the Borrower's customary
forms or another form required by the Bank.
(e) Copies of the Borrower's Form 10-K Annual Report, Form 10-Q
Quarterly Report, Form 8-K Current Report and all other filings by the
Borrower with the Securities and Exchange Commission, within 15 days after
the date of filing.
(f) At the time of the delivery of the financial statements
provided for in Sections 9.2(a) and (b), a Compliance Certificate executed by
a Responsible Officer of the Borrower certifying (i) compliance with all of
Borrower's financial covenants contained herein, including appropriate
supporting schedules, (ii) that no Event of Default or Potential Default has
occurred and is continuing, if any Event of Default or Potential Default has
occurred and is continuing, specifying the nature and extent thereof, (iii)
that the Borrower is not in default with respect to any other Indebtedness,
or if the Borrower is so in default, specifying the nature and extent
thereof, (iv) as to the amount and nature of any contingent liabilities to
which the Borrower has become subject since the date of the last Compliance
Certificate, and (v) that the outstanding principal amount of the Loan as of
the date thereof does not exceed Loan Availability. Notwithstanding anything
to the contrary contained herein and without limiting the Bank's other rights
and remedies, if any Compliance Certificate required under this Section 9.2
is not provided on or before the due date therefor, the Borrower shall be
prohibited from any further borrowing under the line of credit until such
Compliance Certificate is provided.
(g) Such other financial and/or operating reports and
other information on the Borrower or any Real Property as the Bank shall
reasonably request from time to time.
9.3 OTHER INFORMATION.
The Borrower shall also provide to the Bank:
(a) Promptly (and in any event within 48 hours) after the
Borrower first has knowledge of (i) its failing to continue to qualify as a
real estate investment trust as defined in Section 856 of the Code (or any
successor provision thereof), (ii) any act by the Borrower causing its
election to be taxed as a real estate investment trust to be terminated,
(iii) any act causing the Borrower to be subject to the taxes imposed by
Section 857(b)(6) of the Code (or any successor provision thereto), or (iv)
the Borrower failing to be entitled to a dividends paid deduction which meets
the requirements of Section 857 of the Code, a written notice of any such
occurrence or circumstance.
(b) Such additional information as the Bank may reasonably
request from time to time.
(c) Such information as the Bank may request regarding the
Collateral as provided in Article 10 herein.
9.4 FINANCIAL COVENANTS.
(a) TANGIBLE NET WORTH. The Borrower shall at all times
maintain a Tangible Net Worth equal to at least Ninety Million Dollars
($90,000,000).
(b) EBITDA TO DEBT SERVICE. The Borrower shall at all times
maintain a ratio of EBITDA to Debt Service of at least 2:1. This ratio shall
be calculated in each of Borrower's fiscal years throughout the term of the
Loan as follows: at the end of the first fiscal quarter, using the results
of that fiscal quarter; at the end of the second fiscal quarter, using the
results of the first two fiscal quarters; at the end of the third fiscal
quarter, using the results of the first three fiscal quarters; and at each
fiscal year end, using the results of such fiscal year.
(c) LEVERAGE. The Borrower shall at all times maintain
Leverage of not greater than .50:1.0.
(d) DISTRIBUTIONS.
(i) Subject to subparagraph (ii) below, aggregate
distributions to shareholders of the Borrower as of the end of each
fiscal quarter and as of the end of each fiscal year shall not exceed
ninety-eight percent (98%) of Funds From Operations for each such
period. For purposes of this Section 9.4(d), the term "distributions"
shall mean and include all dividends and other distributions to, and
the repurchase of shares from, the holder of any equity interests in
the Borrower.
(ii) No distributions shall be made during the continuance
of any Event of Default arising out of the Borrower's failure to pay
any monetary obligation when due under any Loan Document (a "Monetary
Default"). In the event of any other Event of Default, Borrower shall
be entitled to make the regularly scheduled distributions for the
fiscal quarter in which such Event of Default shall occur, not to
exceed the amount permitted under subparagraph (i) above. For the
following fiscal quarter and each fiscal quarter thereafter until any
such other Event of Default shall have been cured, the distributions
shall not exceed the minimum amount that the Borrower must distribute
to its shareholders in order to maintain compliance with Section 9.16
below; provided, however, that if any such other Event of Default shall
remain uncured or shall not be waived by the Bank for more than 100
days, as of such date and continuing thereafter, the Borrower shall not
be entitled to make any further distributions.
(e) DEVELOPMENT. Unless the Borrower shall have obtained the
Bank's prior written approval therefor, at no time shall Development Costs
(as defined below) exceed an amount equal to ten percent (10%) of the
Borrower's cost basis in the Real Property and any other real estate assets
owed by the Borrower (meaning the value at which Borrower carries the Real
Property and other real estate assets of Borrower on its books in accordance
with GAAP, without the effect of any accumulated depreciation). For the
purposes of this Agreement, "Development Costs" shall mean the aggregate of
all costs and expenses incurred and/or reasonably projected by the Borrower
to be incurred by the Borrower in the acquisition of unimproved real property
or the development of unimproved or improved real property. For the purposes
of this section, "unimproved real property" shall mean any real property
other than real property improved with commercial improvements for which a
certificate of occupancy or its equivalent has been issued by the applicable
Governmental Authority. Without limiting the foregoing, the Borrower shall
not acquire or invest in any real property, and shall not commence the
construction or development of any improvements on any real property, if the
Development Costs relating thereto would cause the limitation established by
this section to be exceeded.
(f) DEBT COVERAGE RATIO OF PROPERTY. The Imputed Loan Maximum
Amount shall be redetermined by the Bank as of the end of each fiscal quarter
on the basis of the Net Operating Income from all of the Real Property for
the twelve (12) month period ending as of the end of such fiscal quarter, and
the Annual Debt Service shall be calculated as of the end of each such fiscal
quarter in the manner provided in the definition of "Imputed Loan Maximums
Amount" provided in Section 1.1 above. Upon the Bank's redetermination of
the Imputed Loan Maximum Amount as of the end of each fiscal quarter, the
Loan Availability shall be adjusted, if necessary, on the basis thereof. If
any such adjustment shall cause the occurrence of an Excess Borrowing
Condition, the Borrower shall cause such Excess Borrowing Condition to be
eliminated as provided in Section 2.5 above.
(g) CALCULATION. Each of the foregoing ratios and financial
requirements shall be calculated as of the last day of each fiscal quarter,
but shall be satisfied by the Borrower at all times.
9.5 TAXES AND OTHER LIABILITIES.
The Borrower shall pay and discharge, before the same become
delinquent and before penalties accrue thereon, all taxes, assessments and
governmental charges upon or against it or any of its properties, and all its
other liabilities at any time existing, except to the extent and so long as:
(a) The same are being contested in good faith and by
appropriate proceedings in such manner as not to cause any Material Adverse
Effect on Borrower or any Real Property or the loss of any right of
redemption from any sale thereunder; and
(b) Borrower shall have set aside on its books reserves
(segregated to the extent required by GAAP) adequate with respect thereto.
9.6 OTHER LIENS.
The Borrower shall not create, assume, or allow any Lien
(including judicial Liens) on the Real Property, except:
(a) Deeds of trust and security agreements in favor of the Bank;
(b) Liens for property taxes not yet due; or
(c) Liens outstanding on the date of this Agreement and
previously disclosed in writing to and permitted by the Bank, including those
shown in the Title Polices.
If at any time any Lien other than those referred to above shall be imposed
upon or otherwise affect any Real Property without the Bank's prior written
consent, the Borrower shall immediately cause such Lien to be removed, either
by satisfying the same or causing an appropriate lien release bond to be
recorded with respect to such Lien. If the Borrower shall fail to cause such
Lien to be removed within forty-five (45) days following the date of its
recordation, such failure shall constitute an Event of Default without
further notice or opportunity to cure hereunder; and the Bank, in addition to
its other rights and remedies by reason thereof under the Loan Documents,
shall have the right to advance its own funds in payment of such Lien, and
the amount of such advance, together with interest thereon at the Default
Rate provided for in the Note shall be immediately due and payable and shall
be secured by the Liens granted in favor of Bank under the Loan Documents.
9.7 NOTICES TO BANK.
The Borrower shall promptly notify the Bank in writing of:
(a) any Event of Default hereunder or any event which would
become an Event of Default hereunder upon the giving of notice, the lapse of
time, or both;
(b) any lawsuit or arbitration over Two Hundred Fifty Thousand
Dollars ($250,000) against the Borrower;
(c) any significant dispute between the Borrower and any
Governmental Authority which may have a Material Adverse Effect upon the
Borrower;
(d) any event, circumstance or condition which may have a
Material Adverse Effect on the Borrower; and
(e) any change in the Borrower's name or trade name, legal
structure, or place of business, (or chief executive office if the Borrower
has more than one place of business).
9.8 AUDITS; BOOKS AND RECORDS.
The Borrower shall maintain adequate books and records and to
allow the Bank and its agents to inspect the Borrower's properties and
examine, audit and make copies of books and records at any reasonable time.
If any of the Borrower's properties, books or records are in the possession
of a third party, the Borrower hereby authorizes that third party to permit
the Bank or its agents to have access to perform inspections or audits and to
respond to the Bank's requests for information concerning such properties,
books and records.
9.9 COMPLIANCE WITH LAWS.
The Borrower shall comply with all Requirements of Law (including
any fictitious name statute), applicable to the Borrower's business.
9.10 PRESERVATION OF RIGHTS.
The Borrower shall maintain and preserve in all material respects
all rights, privileges, and franchises the Borrower now has.
9.11 MAINTENANCE OF PROPERTIES.
The Borrower shall make repairs, renewals, or replacements to
keep the Borrower's properties in good working condition.
9.12 INSURANCE.
The Borrower shall maintain the following insurance:
(a) LIABILITY INSURANCE. Commercial general liability coverage
in a limit of not less than $5,000,000 for a single occurrence. This policy
shall name Bank as an additional insured. Coverage shall be written on an
occurrence basis, not claims made.
(b) PROPERTY DAMAGE INSURANCE. All risk property damage
insurance in nonreporting form on the Real Property, with a policy limit in
an amount not less than the full insurable value of the Real Property on a
replacement cost basis, including tenant improvements, if any. The policy
shall include a business interruption (or rent loss, if more appropriate)
endorsement in the amount of twelve months' principal and interest payments,
taxes and insurance premiums, a lender's loss payable endorsement (438 BFU or
its equivalent) in favor of Bank, and any other endorsements reasonably
required by Bank.
(c) OTHER INSURANCE. Such additional insurance that Bank in
its reasonable judgment may from time to time require, against insurable
hazards which at the time are commonly insured against in the case of
property similarly situated. Such additional insurance may include flood
insurance as required by federal law, but shall not include earthquake
insurance. At Bank's request, Borrower shall supply Bank with an original or
underlyer of any policy.
(d) INSURANCE COMPANIES. All policies of insurance required
under the Loan Documents shall be issued by companies having a minimum A.M.
Best's rating of A:IX. The limits, coverage, forms, deductibles, inception
and expiration dates and cancellation provisions of all such policies shall
be acceptable to Bank. In addition, each required property insurance policy
shall provide that all proceeds be payable to Bank to the extent of its
interest. An approval by Bank is not, and shall not be deemed to be, a
representation of the solvency of any insurer or the sufficiency of any
amount of insurance.
(e) REQUIREMENTS. Each policy of insurance required under the
Loan Documents shall provide that it may not be modified or canceled without
at least thirty (30) days' prior written notice to Bank. When any required
insurance policy expires, Borrower shall furnish Bank with proof acceptable
to Bank that the policy has been reinstated or a new policy issued,
continuing in force the insurance covered by the policy which expired.
Borrower shall also furnish Bank with evidence satisfactory to Bank that all
premiums for such policy have been paid at the time of renewal or issuance.
If Bank fails to receive such proof and evidence, Bank shall have the right,
but not the obligation, to obtain current coverage and advance funds to pay
the premiums for it. Borrower shall repay Bank immediately on demand for any
advance for such premiums, which shall be considered to be an additional loan
to Borrower bearing interest at the Reference-Based Rate, as defined in the
Note, and secured by the Deed of Trust and any other Collateral held by Bank
in connection with the Loan.
Upon the request of the Bank, Borrower shall deliver to the Bank
a copy of each insurance policy, or, if permitted by the Bank, a certificate
of insurance listing all insurance in force.
9.13 ERISA PLANS.
The Borrower shall give prompt written notice to the Bank of the
occurrence of any reportable event under Section 4043(b) of ERISA for which
the PBGC requires 30 day notice; any action by the Borrower to terminate or
withdraw from a Plan or the filing of any notice of intent to terminate under
Section 4041 of ERISA; any notice of noncompliance made with respect to a
Plan under Section 4041(b) of ERISA; or the commencement of any proceeding
with respect to a Plan under Section 4042 of ERISA.
9.14 ADDITIONAL NEGATIVE COVENANTS.
The Borrower shall not, without the Bank's written consent:
(a) liquidate or dissolve the Borrower's business;
(b) enter into any consolidation, merger, pool, syndicate, or
other combination where the Borrower is not the surviving Person;
(c) (i) master lease all or a substantial part of the
Borrower's business or assets, or (ii) dispose of all or a substantial part
of the Borrower's business or assets, if any such master lease or disposition
would have a Material Adverse Effect on Borrower;
(d) acquire or purchase a business or its assets other business
or assets of the kind permitted under Section 9.17 of this Agreement;
(e) sell or otherwise dispose of any assets for less than fair
market value, or enter into any sale and leaseback agreement covering any of
its fixed or capital assets;
(f) suspend its business activity for more than two days;
(g) use any proceeds of the Loan, directly or indirectly, to
purchase or carry, or reduce or retire any loan incurred to purchase or carry
any "Margin Stock" (within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System) or to extend credit to others for
the purpose of purchasing or carrying any Margin Stock; or
(h) amend its articles of incorporation, by-laws or other
organizational documents.
9.15 PERFECTION OF LIENS; COOPERATION.
The Borrower shall assist the Bank in perfecting and protecting
its Liens in the Real Property and other Collateral, and shall reimburse it
for reasonable costs it incurs to protect such Liens; and shall take any
action reasonably requested by the Bank to carry out the intent of the Loan
Documents.
9.16 CONTINUED STATUS AS A REIT; PROHIBITED TRANSACTIONS.
The Borrower (i) shall continue to be a real estate investment
trust as defined in Section 856 of the Code (or any successor provision
thereto), (ii) shall not revoke its election to be a real estate investment
trust, (iii) shall not engage in any "prohibited transactions" as defined in
Section 856(b)(6)(iii) of the Code (or any successor provision thereto), and
(iv) shall continue to be entitled to a dividend paid deduction meeting the
requirements of Section 857 of the Code.
9.17 CONDUCT OF BUSINESS.
The Borrower shall engage primarily in the business of the
acquisition of or investment in commercial real properties, and other
business activities of the Borrower reasonably incidental to business
activities otherwise permitted under this section.
9.18 MANAGEMENT OF BORROWER.
The Borrower's business affairs and activities are managed by
Franklin Properties, Inc. pursuant to an Advisory Agreement dated March 1,
1989 as amended October 1, 1994. The Borrower shall not amend, modify,
terminate or surrender such Advisory Agreement, release Franklin Properties,
Inc. from any of its obligations thereunder or enter into any other agreement
with any other Person for the management of the Borrower's business affairs
or activities, without the Bank's prior written consent.
10. COLLATERAL
10.1 REAL PROPERTY.
(a) Without notice to or the consent of Borrower, Bank may
disclose to any title insurance company which insures any interest of Bank
under a Deed of Trust (whether as primary insurer, coinsurer or reinsurer)
any information, data or material in Bank's possession relating to Borrower,
the Loan, or the Real Property.
(b) The Bank may require Appraisals or inspections of the Real
Property, as required elsewhere in this Agreement or as separately
communicated to the Borrower. The Bank assumes no liability for the accuracy
of any Appraisal or inspection and makes no warranty of any kind about the
condition or value of the Real Property.
(c) Borrower agrees that it shall not make any Accelerating
Transfer (as defined in the Deed of Trust) except as otherwise permitted in
this Agreement, unless the transfer is preceded by Bank's express written
consent to the particular transaction and transferee. Bank may withhold such
consent in its sole discretion. If any Accelerating Transfer occurs, Bank in
its sole discretion may declare all of the obligations under the Loan
Documents to be immediately due and payable, and Bank may invoke any rights
and remedies provided by the Deed of Trust, this Agreement and the other Loan
Documents.
10.2 PERSONAL PROPERTY.
(a) The Borrower's obligations to the Bank under the Loan
Documents will be secured by personal property the Borrower now owns or will
own in the future, as may be included in a Deed of Trust or other instrument
securing the Loan. This Collateral is further defined in security
agreement(s) executed by the Borrower either as separate documents or in a
deed of trust or mortgage. All personal property collateral securing any
other present or future obligations of the Borrower to the Bank shall also
secure this Loan.
(b) Borrower shall not sell, convey, or otherwise transfer or
dispose of its interest in any Personal Property, or agree to do any of the
foregoing, other than in the ordinary course of Borrower's business, without
the prior written consent of Bank in each instance.
10.3 REAL PROPERTY COVENANTS.
(a) MAINTENANCE AND REPAIR. Borrower shall not (i) demolish,
alter, remove or add to any improvements located on any Real Property
("Improvements"), or (ii) erect any new buildings, structures or building
additions on the Real Property, without the prior written consent of Bank
except as may be expressly permitted by this Agreement. Borrower shall pay
when due all claims for labor performed and materials furnished therefor in
connection with any Improvements or construction activities. Notwithstanding
the foregoing, the Borrower shall have the right to make the following
Improvements: (A) the repair and restoration of Improvements following
damage thereto as required by any Deed of Trust, (B) the construction or
installation of non-structural alterations or improvements, provided the same
are in all respects consistent with the character and utility of the existing
Improvements, and (C) the installation or construction of tenant improvements
and related demolition in connection with any Leases entered into by the
Borrower in accordance with this Agreement.
(b) PRESERVATION OF RIGHTS. Borrower shall obtain, preserve
and maintain in good standing, as applicable, all rights, privileges and
franchises necessary or desirable for the conduct of Borrower's business and
all permits, licenses and approvals (including any subdivision map, if
applicable) which are required to be obtained from Governmental Authorities
in order to construct, occupy, operate, market and sell real estate. Upon
request, Borrower shall promptly deliver copies of all such permits, licenses
and approvals to Bank.
(c) TAX RECEIPTS; IMPROVEMENT DISTRICT; CC&RS.
(i) Throughout the term of the Loan, at Borrower's sole
expense, Bank shall be furnished with a tax services contract issued by
a tax reporting agency satisfactory to Bank.
(ii) Borrower shall not consent to, vote in favor of, or
directly or indirectly advocate or assist in the incorporation of any
part of the Real Property into any improvement or community facilities
district, special assessment district or other district without Bank's
prior written consent in each instance. Borrower shall not, without
Bank's prior written consent in each instance, execute, amend or modify
any covenants, conditions and restrictions affecting any part of the
Real Property.
(d) SITE VISITS; BOOKS AND RECORDS. In addition to the rights
provided Bank and subject to the terms and conditions in the Deed of Trust,
Borrower grants Bank, its agents and representatives the right to enter and
visit the Real Property at any reasonable time for the purposes of inspecting
the Real Property. Borrower shall also allow Bank to examine, copy and audit
its books and records. Bank owes no duty of care to protect Borrower or any
other party against, or to inform Borrower or any other party of, any adverse
condition affecting the Real Property, including any defects in the design or
construction of any Improvements on the Real Property or the presence of any
Hazardous Materials on the Real Property. Prior to entering the Real
Property, Bank shall give Borrower reasonable notice of its intent to enter.
Bank shall exercise reasonable efforts to avoid interfering with Borrower's
use of the Real Property in connection with the activities permitted under
this section.
(e) MANAGEMENT AGREEMENTS. Without Bank's prior written
consent, Borrower shall not enter into any agreement providing for the
management, leasing or operation of any portion of any Real Property with any
third party other than Continental Property Management Co., or amend, modify,
terminate or surrender any such agreement currently in place.
(f) CONDITIONAL SALES CONTRACTS; REMOVAL OF FIXTURES AND
EQUIPMENT. Without Bank's prior written consent, Borrower shall not (i)
purchase any materials, equipment, furnishings or fixtures to be installed on
the Real Property under any agreement where the seller reserves a Lien or
title thereto or the right of removal or repossession after such items are
installed on the Real Property, or (ii) remove or permit to be removed from
the Real Property or the Improvements any equipment, machinery or fixtures
used in connection with the management, maintenance, operation or enjoyment
thereof unless replaced by articles of equal suitability and value owned by
Borrower free and clear of any Lien.
(g) USE AND LEASING OF THE PROPERTY.
(i) INCOME FROM PROPERTY. Borrower shall first apply all
income derived from the Real Property, including all income from
Leases, to pay costs and expenses associated with the ownership,
maintenance, operation, leasing and financing of the Real Property,
including all amounts then required to be paid under the Loan
Documents, before using or applying such income for any other purpose.
(ii) LEASING.
(A) Except as otherwise approved by Bank in
writing, all Leases shall be entered into with bona fide third party
tenants financially capable of performing their obligations under their
Leases, and shall reflect arms-length transactions at the then current
market rate for comparable space. Borrower shall perform all
obligations required to be performed by it as landlord under any
Lease. Borrower shall not accept payment of more than one month's rent
in advance from any tenant. Except as may be permitted under this
paragraph, without the prior written consent of Bank, Borrower shall
not enter into, modify, amend, surrender or terminate any Lease.
Notwithstanding the foregoing:
(1) Borrower may terminate a Lease without the
prior written consent of Bank for non-payment of rent if Borrower
would in good faith do so on such default in the ordinary course
of its business;
(2) The prior approval of Bank shall not be
required to any Lease if (a) the proposed use to be made of the
premises subject to the Lease does not involve the use, storage,
processing, manufacture, generation, disposal or release of any
Hazardous Materials as a principal business operation or as a
necessary and principal component of a business operation to be
conducted at said premises; (b) the Lease is not a Major Lease;
and (c) the Lease does not contain one or more of the following
types of lease provisions: (i) granting an option, right of
first offer or refusal or other peremptory right to purchase all
or any portion of the Property, (ii) granting the tenant any
right to receive any portion of any insurance or condemnation
proceeds, (iii) allowing for rental offsets, or (iv) providing
for environmental or Hazardous Materials indemnification by the
landlord.
(3) The prior approval of Bank shall not be
required to any amendment or modification of a Lease other than a
Required Lease or Major Lease if the amendment or modification
contains no provision which, if originally included in the Lease,
would not have required the prior approval of Bank.
(B) Borrower shall disclose to Bank any and all
Leases which affect the Property. Borrower shall promptly deliver to
Bank such rent rolls, leasing schedules and reports, operating
statements or other leasing information as Bank from time to time may
request, and shall promptly notify Bank of any material tenant dispute
or material adverse change in leasing activity on the Real Property.
Borrower shall promptly obtain and deliver to Bank such estoppel
certificates and subordination, non-disturbance and attornment
agreements or non-disturbance and attornment agreements from tenants as
Bank from time to time may require. In no event shall any approval by
Bank of a Lease be a representation of any kind with regard to the
Lease or its enforceability, or the financial capacity of any tenant or
Lease guarantor.
(C) If Bank's prior written approval is required
for any Lease, Borrower shall pay to Bank as a condition to such
consent Bank's costs and expenses (including reasonable outside counsel
fees and the allocated cost of in-house counsel) incurred in connection
therewith. Such costs and expenses shall be due and payable whether or
not such consent is given.
11. DEFAULT
If any of the following events occurs (an "Event of Default"), the Bank
may declare the Borrower in default, stop making any additional advances to
the Borrower under the line of credit, and require the Borrower to repay its
entire debt immediately and without prior notice. However, if a bankruptcy
petition is filed with respect to the Borrower, the entire debt outstanding
under this Agreement shall automatically be due immediately.
11.1 FAILURE TO PAY.
The Borrower fails to make a payment due under the Loan Documents
within 15 days after the date when due.
11.2 LIEN PRIORITY.
The Bank fails to have an enforceable first Lien on any Real
Property or Personal Property (except for any prior Liens to which the Bank
has consented in writing).
11.3 FALSE INFORMATION.
The Borrower has given the Bank false or misleading information
or representations.
11.4 BANKRUPTCY.
The Borrower files a bankruptcy petition or makes a general
assignment for the benefit of creditors, or a bankruptcy petition is filed
against the Borrower. The default will be deemed cured if any bankruptcy
petition filed against the Borrower is dismissed within a period of 45 days
after the filing; provided, however, that the Bank will not be obligated to
extend any additional credit to the Borrower during that period.
11.5 RECEIVERS.
A receiver or similar official is appointed for the Borrower's
business, or the business is terminated.
11.6 LAWSUITS.
Any lawsuit or lawsuits are filed against the Borrower in an
aggregate amount of Ten Million Dollars ($10,000,000) or more as any one time
in excess of any insurance coverage.
11.7 JUDGMENTS.
Any judgment or arbitration award is entered against the
Borrower, or the Borrower enters into any settlement agreement with respect
to any litigation, claim or arbitration, in an aggregate amount of Five
Million Dollars ($5,000,000) or more in excess of any insurance coverage.
11.8 ERISA PLANS.
The occurrence of any of the following events with respect to the
Borrower, provided such event could reasonably be expected, in the judgment
of the Bank, to subject the Borrower to any tax, penalty or liability (or any
combination of the foregoing) which in the aggregate could have a Material
Adverse Effect on the Borrower with respect to a Plan:
(a) A reportable event occurs with respect to a Plan which in
the reasonable judgment of the Bank may result in the termination of such
Plan for purposes of ERISA.
(b) Any Plan termination (or commencement of proceedings to
terminate a Plan) or the Borrower's full or partial withdrawal from a Plan.
11.9 GOVERNMENT ACTION.
Any Governmental Authority takes action that the Bank believes
has a Material Adverse Effect on the Borrower.
11.10 MATERIAL ADVERSE CHANGE.
Any event, circumstance or condition shall occur which the Bank
believes has a Material Adverse Effect on the Borrower.
11.11 OTHER DEFAULT.
The occurrence of any other event, circumstance or condition
which, under this Agreement or the other Loan Documents, constitutes an Event
of Default. Except if this Agreement provides that no cure period shall
apply to any such event, circumstance or condition, and if in the Bank's
opinion, such event, circumstance or condition is capable of being remedied,
it will not be considered an Event of Default for a period of thirty (30)
days after the date on which the Bank gives written notice of such event,
circumstance or condition to the Borrower; provided, however, that the Bank
will not be obligated to extend any additional credit to the Borrower during
that period.
11.12 OTHER BREACH UNDER THIS AGREEMENT.S AGREEMENT
The Borrower fails to meet the conditions of or fails to perform
any obligation under any term of this Agreement not specifically referred to
in this Article, including, without limitation, compliance with any of the
financial covenants set forth in Section 9.4 above. If, in the Bank's
opinion, the breach is capable of being remedied, the breach will not be
considered an Event of Default under this Agreement for a period of thirty
(30) days after the date on which the Bank gives written notice of the breach
to the Borrower; provided, however, that the Bank will not be obligated to
extend any additional credit to the Borrower during that period.
11.13 CROSS-DEFAULT.
Any default occurs under any agreement in connection with any
credit the Borrower or any of the Borrower's related entities or Affiliates
has obtained from the Bank or any other creditor or which the Borrower or any
of the Borrower's related entities or affiliates has guaranteed, and such
default shall continue beyond any cure period applicable thereto, if the
default consists of a failure to make a payment when due or gives the
creditor the right to accelerate the obligation.
12. ENFORCING THIS AGREEMENT; MISCELLANEOUS
12.1 REMEDIES.
If an Event of Default occurs under the Loan Documents:
(a) Bank may exercise any right or remedy which it has under
any of the Loan Documents or which is otherwise available at law or in
equity. All of Bank's rights and remedies shall be cumulative. At Bank's
option, exercisable in its sole discretion, all of Borrower's obligations
under the Loan Documents will become immediately due and payable without
notice of default, presentment or demand for payment, protest or notice of
nonpayment or dishonor, or other notices or demands of any kind.
(b) Bank shall have the right in its sole discretion to enter
the Real Property and take possession of it, whether in person, by agent or
by court-appointed receiver, collect rents and otherwise protect the
Collateral and its rights under the Loan Documents. If Bank exercises any of
the rights or remedies provided in this subparagraph, that exercise shall not
make Bank a partner or joint venturer of Borrower. All sums which are
expended by Bank in preserving the Collateral shall be considered an
additional advance to Borrower under this line of credit.
12.2 CALIFORNIA LAW.
This Agreement is governed by California law but without regard
to the choice of law rules of California.
12.3 ARBITRATION AND REFERENCE.
(a) MANDATORY ARBITRATION. Except as provided below, any
controversy or claim between or among the parties, including those arising
out of or relating to this Agreement or the other Loan Documents and any
claim based on or arising from an alleged tort, shall at the request of any
party be determined by arbitration. The arbitration shall be conducted in
accordance with the United States Arbitration Act (Title 9, U.S. Code),
notwithstanding any choice of law provision in this Agreement, and under the
Commercial Rules of the American Arbitration Association ("AAA"). The
arbitrator(s) shall give effect to statutes of limitation in determining any
claim. Any controversy concerning whether an issue is arbitrable shall be
determined by the arbitrator(s). Judgment upon the arbitration award may be
entered into any court having jurisdiction. The institution and maintenance
of an action for judicial relief or pursuit of a provisional or ancillary
remedy shall not constitute a waiver of the right of any party, including the
plaintiff, to submit the controversy or claim to arbitration if any other
party contests such action for judicial relief.
(b) REAL PROPERTY COLLATERAL. Notwithstanding subparagraph (a)
above, no controversy or claim shall be submitted to arbitration without the
consent of all parties if, at the time of the proposed submission, such
controversy or claim arises from or relates to an obligation to Bank which is
secured in whole or in part by real property in California. If all parties
do not consent to submission of such a controversy or claim to arbitration,
the controversy or claim shall be determined as provided in subparagraph (c)
below.
(c) JUDICIAL REFERENCE. Subject to subparagraph (a) and (b)
above, in any judicial action between or among the parties, including but not
limited to any action or cause of action arising out of or relating to this
Agreement or the other Loan Documents or based on or arising from an alleged
tort, all decisions of fact and law shall at the request of any party be
referred to a referee in accordance with California Code of Civil Procedure
Sections 638 ET SEQ. The parties shall designate to the court a referee or
referees selected under the auspices of the AAA in the same manner as
arbitrators are selected in AAA-sponsored proceedings. The presiding referee
of the panel, or the referee if there is a single referee, shall be an active
attorney or retired judge. Judgment upon the award rendered by such
referee(s) shall be entered in the court in which such proceeding was
commenced in accordance with California Code of Civil Procedure Sections 644
and 645.
(d) PROVISIONAL REMEDIES, SELF-HELP AND FORECLOSURE. No
provision of this Agreement shall limit the right of any party to this
Agreement to exercise self-help remedies such as setoff, foreclosure against
or sale of any real or personal property collateral or security, or obtaining
provisional or ancillary remedies from a court of competent jurisdiction
before, after, or during the pendency of any arbitration or other
proceeding. The exercise of a remedy does not waive the right of either
party to resort to arbitration or reference. At Bank's option, foreclosure
under a deed of trust or mortgage may be accomplished either by exercise of
power of sale under the deed of trust or mortgage or by judicial foreclosure.
12.4 PRESENTMENT, DEMANDS AND NOTICE.
The Bank shall be under no duty or obligation (a) to make or give
any presentment, demands for performances, notices of nonperformance,
protests, notices of protest or notices of dishonor in connection with any
obligation or indebtedness under the Loan Documents or in connection with any
obligations or evidences of indebtedness held by the Bank as Collateral or
(b) to give the Borrower notice of rights or privileges relating to or
affecting any Collateral held by the Bank.
12.5 INDEMNIFICATION.
Borrower shall indemnify, save, and hold harmless the Bank and
its directors, officers, agents and employees (collectively the
"Indemnitees") from and against:
(a) Any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs, charges, expenses or
disbursements (including attorneys' fees) of any kind with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement and the other Loan Documents, and the transactions contemplated
hereby, and with respect to any investigation, litigation or proceeding
related to this Agreement, the other Loan Documents, the Loan or the use of
the proceeds thereof, whether or not any Indemnitee is a party thereto (all
the foregoing, collectively, the "Indemnified Liabilities"); provided, that
Borrower shall have no obligation hereunder to any Indemnitee with respect to
Indemnified Liabilities arising from the gross negligence or willful
misconduct of such Indemnitee.
(b) Any and all writs, subpoenas, claims, demands, actions, or
causes of action that are served on or asserted against any Indemnitee (if
directly or indirectly related to a writ, subpoena, claim, demand, action, or
cause of action against Borrower or any affiliate of Borrower); and any and
all liabilities, losses, costs, or expenses (including attorneys' fees) that
any Indemnitee suffers or incurs as a result of any of said matters.
The obligations of the Borrower under this section shall survive
payment of the Loan and assignment of any rights hereunder.
12.6 ATTORNEYS' FEES.
In the event of a lawsuit or arbitration proceeding, including
any tort proceeding, between or among the parties hereto, the prevailing
party is entitled to recover costs and reasonable attorneys' fees (including
any allocated costs of in-house counsel) incurred in connection with the
lawsuit or arbitration proceeding, as determined by the court or arbitrator.
12.7 NOTICES.
All notices required under this Agreement shall be personally
delivered or sent by registered or certified mail, postage prepaid, or
facsimile transmission to the addresses on the signature page of this
Agreement, or to such other addresses as the Bank and the Borrower may
specify from time to time in writing. Notices shall be effective upon
receipt or when proper delivery is refused.
12.8 SUCCESSORS AND ASSIGNS.
This Agreement is binding on the Borrower's and the Bank's
successors and assignees. The Borrower agrees that it may not assign this
Agreement or the other Loan Documents without the Bank's prior consent. The
Bank may sell participations in or assign this Loan, and may provide
financial information about the Borrower to actual or potential participants
or assignees, without notice to or consent of Borrower.
12.9 NO THIRD PARTIES BENEFITED.
This Agreement is made and entered into for the sole protection
and benefit of Bank and Borrower and their successors and assigns. No trust
fund is created by this Agreement and no other persons or entities shall have
any right of action under this Agreement or any right to the Loan funds.
12.10 INTEGRATION; RELATION TO ANY LOAN COMMITMENT; HEADINGS.
The Loan Documents (a) integrate all the terms and conditions in
or incidental to this Agreement, (b) supersede all oral negotiations and
prior writings with respect to their subject matter, including any loan
commitment to Borrower, and (c) are intended by the parties as the final
expression of the agreement with respect to the terms and conditions set
forth in those documents and as the complete and exclusive statement of the
terms agreed to by the parties. No representation, understanding, promise or
condition shall be enforceable against any party unless it is contained in
the Loan Documents. If there is any conflict between the terms, conditions
and provisions of this Agreement and those of any other agreement or
instrument, including any other Loan Document, the terms, conditions and
provisions of this Agreement shall prevail. Headings and captions are for
reference only and shall not affect the interpretation or meaning of any
provisions of this Agreement. The exhibits to this Agreement are hereby
incorporated in this Agreement.
12.11 INTERPRETATION.
(a) Time is of the essence in the performance of this Agreement
by Borrower; and (b) the word "include(s)" means "include(s), without
limitation," and the word "including" means "including but not limited to."
No listing of specific instances, items or matters in any way limits the
scope or generality of any language of this Agreement.
12.12 SEVERABILITY; WAIVERS; AMENDMENTS.
This Agreement may not be modified or amended except by a written
agreement signed by the parties. Any consent or waiver under this Agreement
must be in writing. If any part of this Agreement is not enforceable, the
rest of the Agreement may be enforced. If the Bank waives a default, it may
enforce a later default. No waiver shall be construed as a continuing
waiver. No waiver shall be implied from Bank's delay in exercising or
failure to exercise any right or remedy against Borrower or any security.
Consent by Bank to any act or omission by Borrower shall not be construed as
a consent to any other or subsequent act or omission or as a waiver of the
requirement for Bank's consent to be obtained in any future or other
instance. The Bank retains all of its rights and remedies, even if it makes
an advance after a default.
12.13 COUNTERPARTS.
This Agreement may be executed in counterparts each of which,
when executed, shall be deemed an original, and all such counterparts shall
constitute one and the same agreement.
This Agreement is executed as of the date stated at the top of the first page.
BANK: BORROWER:
BANK OF AMERICA NATIONAL FRANKLIN SELECT REALTY TRUST,
TRUST AND SAVINGS ASSOCIATION a California corporation
By ______________ By _________________________
Title ______________ Title _________________________
By ______________ By _________________________
Title ______________ Title _________________________
Address where notices to Address where notices to
the Bank are to be sent: the Borrower are to be sent:
Bank of America NT&SA Franklin Select Realty Trust
Commercial Real Estate Services/ 0000 Xxxxxxx Xxxxx, 0xx Xxxxx
National Accounts 0000 Xxx Xxxxx, XX 00000
00 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx Attn: Xxxx XxxXxxx
Xxx Xxxxxxxxx, XX 00000 Tel: (000) 000-0000
Attn: Xxxxxxxx X. Xxxxxx Fax: (000) 000-0000
Tel: (000) 000-0000
Fax: (000) 000-0000
EXHIBIT A
REAL PROPERTY COLLATERAL
EXHIBIT B
BORROWING NOTICE
___________________, 199__
Bank of America National Trust
and Savings Association
Commercial Real Estate Services
Division 9105
00 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxx
Re: Secured Line of Credit Loan Agreement dated as of December 10, 1996
(the "Agreement") between BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION ("Bank") and FRANKLIN SELECT REALTY TRUST ("Borrower")
Dear ________________:
Reference is made to the Agreement. Capitalized terms used in this
Borrowing Notice without definition have the meanings specified in the
Agreement.
Pursuant to the Agreement, notice is hereby given that the Borrower
desires that the Bank make the advance described in attached SCHEDULE 1 (the
"Advance"). The Borrower and the undersigned Responsible Officer or other
authorized representative of the Borrower hereby certify that:
(1) LOAN AVAILABILITY. The outstanding amount of the Line of
Credit shall not, after giving effect to the making of the Advance, exceed
the Loan Availability;
(2) REPRESENTATIONS AND WARRANTIES. All representations and
warranties of the Borrower contained in the Agreement and the other Loan
Documents are true and correct in all material respects as of the date hereof
and shall be true and correct in all material respects on the date of the
Advance, both before and after giving effect to the Advance; provided,
however, that the representations and warranties of the Borrower set forth in
the Agreement regarding financial statements shall be deemed to be made with
respect to the financial statements most recently delivered to the Bank
pursuant to the Agreement;
(3) NO EVENT OF DEFAULT. No Event of Default or Potential Default
exists as of the date hereof or will result from the making of the Advance;
(4) USE OF PROCEEDS. The proceeds of the Advance will be used
only as permitted by the Agreement;
(5) NO MATERIAL ADVERSE EFFECT. No act, omission, change or event
which would have a Material Adverse Effect on the Borrower or the Collateral
has occurred since the date of the Agreement; and
(6) OTHER CONDITIONS. Enclosed are the documents and information
requested by Bank as a condition to this Advance.
FRANKLIN SELECT REALTY TRUST,
a California corporation
By: __________________________
Its: _________________________
SCHEDULE 1
to Borrowing Notice
REQUESTED LOAN
1. AMOUNT OF REQUESTED ADVANCE: $_______________
(Must be a minimum of $1,000,000)
2. PURPOSE OF ADVANCE:
EXHIBIT C
COMPLIANCE CERTIFICATE
This Compliance Certificate is delivered pursuant to the Secured
Line of Credit Loan Agreement dated as of December 10, 1996, between Franklin
Select Realty Trust ("Borrower") and Bank of America National Trust and
Savings Association ("Bank") (as from time to time amended, supplemented or
restated, the "Loan Agreement"). Capitalized terms used in this Certificate
without definition have the same meanings as in the Loan Agreement.
1. The undersigned hereby certifies that the undersigned is a
Responsible Officer and has reviewed the terms of the Loan Agreement and has
made a review of the transactions and financial condition of Borrower during
_________, the accounting period covered by the financial statements and
operating statements being delivered to Bank along with this Compliance
Certificate and:
(a) Borrower was in compliance with all of Borrower's financial
covenants contained in the Loan Agreement, including Section 9.4 of the Loan
Agreement, throughout such accounting period;
(b) No Event of Default or Potential Default occurred during such
accounting period, except as set forth in subparagraph (d) below;
(c) Borrower was not in default with respect to any other
Indebtedness of Borrower during such accounting period, except as set forth
in subparagraph (d) below;
(d) The nature and extent of the event or condition that
constituted [an Event of Default/Potential Default/a default with respect to
other Indebtedness of Borrower] is as follows:
(e) Borrower [has taken/is taking/is planning to take] the
following action with respect to the event or condition described in
subparagraph [(c)/(d)] above;
(f) During such accounting period, Borrower did not become subject
to any contingent liabilities not disclosed in a previous Compliance
Certificate, except as set forth as Schedule 1 hereto.
2. The outstanding principal amount of the Loan as of the date hereof
does not exceed Loan Availability.
3. The calculations required to establish compliance with Borrower's
financial covenants contained in the Loan Agreement, including Section 9.4 of
the Loan Agreement, and to establish that the outstanding principal amount of
the Loan does not exceed Loan Availability, are attached hereto as Schedule 1.
Date: ______________ __________________________________
[Responsible Officer]
SCHEDULE 1
to Compliance Certificate
1. [Calculations establishing compliance with Financial Covenants]
2. [Calculations establishing that Loan amount does not exceed Loan
Availability]
3. [Contingent liabilities]
EXHIBIT D
SCHEDULE OF REQUIRED LEASES
SHORES PROPERTY
American Management System (Suite 100)
American Management System (Suite 150)
American Management System (Suite 170)
American Management System (Suite 190)
American Management System (XL/Data) (Suite 225)
American Management System (Suite 200, 300)
Am. Telecorp (Suite 100)
Oracle Corp
Am. Telecorp (Suite 400, 465, 475)
Am Teleco (Media)
RSA Data Sec
RSA (Must)
RSA Data Sec
NORTHPORT PROPERTY
Hereaus Amersil
Advanced EPI
Xxx Research
Xxx Research
FAIRWAY CENTER PROPERTY
20th Cen Indust
CA Fed. Bank
CNA
TABLE OF CONTENTS
PAGE
1. DEFINITIONS........................................................... 1
1.1 Certain Defined Terms.......................................... 1
1.2 Computation of Time Periods.................................... 6
1.3 Accounting Terms............................................... 7
2. LINE OF CREDIT AMOUNT AND TERMS....................................... 7
2.1 Line of Credit Amount.......................................... 7
2.2 Availability Period............................................ 7
2.3 Interest Rate.................................................. 7
2.4 Loan Documents................................................. 7
2.5 Excess Borrowing Condition..................................... 8
3. FEES, EXPENSES........................................................ 8
3.1 Fees........................................................... 8
3.2 Expenses and Costs............................................. 8
4. REAL PROPERTY VALUE................................................... 8
4.1 Acceptance, Determinations..................................... 8
4.2 Additional Value Determinations................................ 9
5. DISBURSEMENTS, PAYMENTS, COSTS........................................ 10
5.1 Requests for Credit............................................ 10
5.2 Disbursement and Payment Records............................... 11
5.3 Authorization.................................................. 11
5.4 Direct Debit To Line of Credit................................. 11
5.5 Payments....................................................... 11
5.6 Banking Days................................................... 11
6. CONDITIONS............................................................ 11
6.1 Authorizations................................................. 12
6.2 Governing Documents; Good Standing Certificates................ 12
6.3 Loan Documents................................................. 12
6.4 Evidence of Priority; Title Insurance.......................... 12
6.5 Insurance...................................................... 12
6.6 Environmental Questionnaire.................................... 12
6.7 Appraisal...................................................... 12
6.8 Payment of Fees................................................ 12
6.9 Engineering.................................................... 12
6.10 Credit......................................................... 12
6.11 Other Items.................................................... 13
6.12 No Default..................................................... 13
6.13 Material Adverse Changes....................................... 13
6.14 Representations and Warranties................................. 13
6.15 Leases......................................................... 13
7. REPRESENTATIONS AND WARRANTIES........................................ 13
7.1 Organization of Borrower; Good Standing........................ 13
7.2 Authorization; Enforceable Agreement........................... 13
7.3 Financial Information.......................................... 13
7.4 Lawsuits....................................................... 14
7.5 Title to Assets................................................ 14
7.6 Collateral..................................................... 14
7.7 Permits, Franchises............................................ 14
7.8 Income Tax Returns............................................. 14
7.9 ERISA Plans.................................................... 15
7.10 Other Obligations.............................................. 15
7.11 No Event of Default............................................ 15
7.12 Location of Borrower........................................... 15
7.13 Status as a REIT............................................... 15
8. BORROWER OPTIONS...................................................... 15
8.1 Extension Option............................................... 15
8.2 Term Out Option................................................ 16
8.3 UPREIT Transfer................................................ 17
9. COVENANTS............................................................. 17
9.1 Use of Proceeds................................................ 17
9.2 Financial Information.......................................... 18
9.3 Other Information.............................................. 18
9.4 Financial Covenants............................................ 19
9.5 Taxes and Other Liabilities.................................... 20
9.6 Other Liens.................................................... 20
9.7 Notices to Bank................................................ 21
9.8 Audits; Books and Records...................................... 21
9.9 Compliance with Laws........................................... 21
9.10 Preservation of Rights......................................... 21
9.11 Maintenance of Properties...................................... 21
9.12 Insurance...................................................... 21
9.13 ERISA Plans.................................................... 22
9.14 Additional Negative Covenants.................................. 22
9.15 Perfection of Liens; Cooperation............................... 23
9.16 Continued Status as a REIT; Prohibited Transactions............ 23
9.17 Conduct of Business............................................ 23
9.18 Management of Borrower......................................... 23
10. COLLATERAL............................................................ 23
10.1 Real Property.................................................. 23
10.2 Personal Property.............................................. 24
10.3 Real Property Covenants........................................ 24
11. DEFAULT............................................................... 26
11.1 Failure to Pay................................................. 26
11.2 Lien Priority.................................................. 26
11.3 False Information.............................................. 26
11.4 Bankruptcy..................................................... 27
11.5 Receivers...................................................... 27
11.6 Lawsuits....................................................... 27
11.7 Judgments...................................................... 27
11.8 ERISA Plans.................................................... 27
11.9 Government Action.............................................. 27
11.10 Material Adverse Change........................................ 27
11.11 Other Default.................................................. 27
11.12 Other Breach Under This Agreement.............................. 28
11.13 Cross-default.................................................. 28
12. ENFORCING THIS AGREEMENT; MISCELLANEOUS............................... 28
12.1 Remedies....................................................... 28
12.2 California Law................................................. 28
12.3 Arbitration and Reference...................................... 28
12.4 Presentment, Demands and Notice................................ 29
12.5 Indemnification................................................ 29
12.6 Attorneys' Fees................................................ 30
12.7 Notices........................................................ 30
12.8 Successors and Assigns......................................... 30
12.9 No Third Parties Benefited..................................... 30
12.10 Integration; Relation to Any Loan Commitment; Headings......... 30
12.11 Interpretation................................................. 30
12.12 Severability; Waivers; Amendments.............................. 31
12.13 Counterparts................................................... 31
