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Exhibit 10ad
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of November 1, 1997
("THIS AGREEMENT"), among the following:
(i) FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS,
a real estate investment trust organized under the laws of the State of
Ohio (herein, together with its successors and assigns, the "BORROWER")
;
(ii) FIRST UNION MANAGEMENT, INC., a Delaware corporation
(herein, together with its successors and assigns, the "MANAGEMENT
COMPANY");
(iii) the lending institutions listed in Annex I hereto (each
a "LENDER" and collectively, the "LENDERS");
(iv) KEYBANK NATIONAL ASSOCIATION, a national banking
association, as documentation agent (the "DOCUMENTATION AGENT");
(v) BANKERS TRUST COMPANY, a New York corporation, as
syndication agent (the "SYNDICATION AGENT"); and
(vi) NATIONAL CITY BANK, a national banking association, as
administrative agent (the "ADMINISTRATIVE AGENT"):
PRELIMINARY STATEMENTS:
(1) Unless otherwise defined herein, all capitalized terms used herein
and defined in section 10.1 are used herein as so defined.
(2) This Agreement amends and restates in its entirety the Credit
Agreement, dated as of September 19, 1996, as amended by Amendment No. 1 to
Credit Agreement, dated as of April 15, 1997, among the Borrower, the Management
Company, the Lenders named therein, and the Administrative Agent (as so amended,
the "ORIGINAL CREDIT AGREEMENT").
(3) The Borrower has applied to the Lenders for credit facilities in
order to provide working capital and funds for acquisitions and other lawful
purposes.
(4) The Management Company acts as manager of the properties and
investments of the Borrower.
(5) Subject to and upon the terms and conditions set forth herein, the
Lenders are willing to make available to the Borrower the credit facilities
provided for herein.
NOW, THEREFORE, it is agreed:
SECTION 1. AMOUNT AND TERMS OF CREDIT.
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1.1. COMMITMENTS. Subject to and upon the terms and conditions herein
set forth, each Lender severally agrees to make a loan or loans (each a "LOAN"
and, collectively, the "LOANS") to the Borrower, which Loans shall be drawn, to
the extent such Lender has a Commitment hereunder, as provided herein. Loans (i)
may be made at any time and from time to time on and after the Initial Borrowing
Date (as defined in the Original Credit Agreement) and prior to the Maturity
Date; (ii) except as hereinafter provided, may, at the option of the Borrower,
be incurred and maintained as, and/or converted into, Loans which are Base Rate
Loans or Eurodollar Loans, PROVIDED that all Loans made as part of the same
Borrowing shall, unless otherwise specifically provided herein, consist of Loans
of the same Type; (iii) may be repaid and reborrowed in accordance with the
provisions hereof; and(iv) shall not for any Lender at any time outstanding
exceed that aggregate principal amount which, when added to the product at such
time of (A) such Lender's Percentage and (B) the sum of the Letter of Credit
Outstandings, equals the Commitment of such Lender at such time. In addition, no
Loans shall be made at any time if after giving effect thereto the sum of the
aggregate outstanding principal amount of the Loans, PLUS the Letter of Credit
Outstandings, PLUS the Aggregate Measured Swap Credit Risk (if any) of all
Designated Hedge Agreements, would exceed the lesser of (I) the sum of (x) 60%
of the appraised fair market value of the Eligible Real Estate constituting a
part of the Mortgaged Property hereunder on the Closing Date and which remains
Mortgaged Property hereunder, as determined on the basis of the appraisals
referred to in section 5.1(t), and (y) 60% of the Appraised Value of any
Additional Property or Substitute Property, determined for any such Property as
of the date such Property becomes a Mortgaged Property hereunder in compliance
with section 7.17, as determined on the basis of the appraisal with respect
thereto referred to in section 7.17, and (II) the Aggregate Borrowing Base as of
the most recently completed fiscal quarter for which financial information
necessary to determine the Aggregate Borrowing Base shall have been furnished by
the Borrower as contemplated by this Agreement.
1.2. MINIMUM BORROWING AMOUNTS, ETC. The aggregate principal amount of
each Borrowing shall not be less than the Minimum Borrowing Amount for such
Borrowing. More than one Borrowing may be incurred on any day, PROVIDED that at
no time shall there be outstanding more than 7 Borrowings of Eurodollar Loans.
1.3. NOTICE OF BORROWING. (a) Whenever the Borrower desires to incur
Loans, it shall give the Administrative Agent at its Notice Office, prior to
1:00 P.M. (Cleveland, Ohio time), at least three Business Days' prior written
notice (or telephonic notice promptly confirmed in writing) of each Borrowing of
Eurodollar Loans and at least one Business Day's prior written notice (or
telephonic notice promptly confirmed in writing) of each Borrowing of Base Rate
Loans to be made hereunder. Each such notice (each such notice, a "NOTICE OF
BORROWING") (or the written confirmation) shall be in the form of Exhibit A-1
and shall be irrevocable and shall specify: (i) the aggregate principal amount
of the Loans to be made pursuant to such Borrowing; (ii) the date of Borrowing
(which shall be a Business Day); and (iii) whether the respective Borrowing
shall consist of Base Rate Loans or Eurodollar Loans and, if Eurodollar Loans,
the Interest Period to be initially applicable thereto. The Administrative Agent
shall promptly give each Lender written notice (or telephonic notice promptly
confirmed in writing) of each proposed Borrowing, of such Lender's proportionate
share thereof and of the other matters covered by the Notice of Borrowing.
(b) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice permitted to be given hereunder, the
Administrative Agent may act prior to receipt of written confirmation without
liability upon the basis of such telephonic notice believed by the
Administrative Agent in good faith to be from an Authorized Officer of the
Borrower entitled to give telephonic notices under this Agreement on behalf of
the Borrower. In each such case, the Administrative Agent's record of the terms
of such telephonic notice shall be conclusive absent manifest error.
1.4. DISBURSEMENT OF FUNDS. (a) No later than 1:00 P.M. (Cleveland,
Ohio time) on the date specified in each Notice of Borrowing, each Lender will
make available its PRO RATA share of each Borrowing requested to be made on such
date in the manner provided below. All amounts shall be made available to the
Administrative Agent in U.S. dollars and immediately available funds at the
Payment Office and the Administrative Agent promptly will make available to the
Borrower by depositing to its account at the Payment Office the aggregate of the
amounts so made available in the type of funds received. Unless the
Administrative Agent shall have been notified by any Lender prior to the date of
Borrowing that such Lender does not intend to make available to the
Administrative Agent its portion of the Borrowing or Borrowings to be made on
such date, the Administrative Agent may assume that such Lender has made such
amount available to the Administrative Agent on such date of Borrowing, and the
Administrative Agent, in reliance upon such assumption, may (in its sole
discretion and without any obligation to do so) make available to the Borrower
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a corresponding amount. If such corresponding amount is not in fact made
available to the Administrative Agent by such Lender and the Administrative
Agent has made available same to the Borrower, the Administrative Agent shall be
entitled to recover such corresponding amount from such Lender. If such Lender
does not pay such corresponding amount forthwith upon the Administrative Agent's
demand therefor, the Administrative Agent shall promptly notify the Borrower,
and the Borrower shall immediately pay such corresponding amount to the
Administrative Agent. The Administrative Agent shall also be entitled to recover
from such Lender or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Administrative Agent to the Borrower to the
date such corresponding amount is recovered by the Administrative Agent, at a
rate per annum equal to (x) if paid by such Lender, the overnight Federal Funds
Effective Rate or (y) if paid by the Borrower, the then applicable rate of
interest, calculated in accordance with section 1.8, for the respective Loans
(but without any requirement to pay any amounts in respect thereof pursuant to
section 1.11).
(b) Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill its commitments hereunder or to prejudice any rights which
the Borrower may have against any Lender as a result of any default by such
Lender hereunder.
1.5. NOTES. (a) The Borrower's obligation to pay the principal of, and
interest on, the Loans made to it by each Lender shall be evidenced by a
promissory note substantially in the form of Exhibit B with blanks appropriately
completed in conformity herewith (each a "NOTE" and, collectively, the "NOTES").
(b) The Note issued to a Lender shall: (i) be executed by the Borrower;
(ii) be payable to the order of such Lender and be dated on or prior to the
Closing Date; (iii) be in a stated principal amount equal to the Commitment of
such Lender and be payable in the principal amount of Loans evidenced thereby;
(iv) mature on the Maturity Date; (v) bear interest as provided in the
appropriate clause of section 1.8 in respect of the Base Rate Loans and
Eurodollar Loans, as the case may be, evidenced thereby; (vi) be subject to
mandatory prepayment as provided in section 4.2: and (vii) be entitled to the
benefits of this Agreement and the other Loan Documents.
(c) Each Lender will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will, prior to any
transfer of its Note, endorse on the reverse side thereof the outstanding
principal amount of Loans evidenced thereby. Failure to make any such notation
or any error in any such notation shall not affect the Borrower's obligations in
respect of such Loans.
1.6. CONVERSIONS. The Borrower shall have the option to convert on any
Business Day all or a portion at least equal to the applicable Minimum Borrowing
Amount of the outstanding principal amount of the Loans into a Borrowing or
Borrowings of the other Type of Loan, PROVIDED that: (i) no partial conversion
of a Borrowing of Eurodollar Loans shall reduce the outstanding principal amount
of the Eurodollar Loans made pursuant to such Borrowing to less than the Minimum
Borrowing Amount applicable thereto; (ii) Base Rate Loans may only be converted
into Eurodollar Loans if no Default under section 9.1(a) or Event of Default is
in existence on the date of the conversion unless the Required Lenders otherwise
agree; and (iii) Borrowings of Eurodollar Loans resulting from this section 1.6
shall be limited in numbers as provided in section 1.2. Each such conversion
shall be effected by the Borrower giving the Administrative Agent at its Notice
Office, prior to 1:00 P.M. (Cleveland, Ohio time), at least three Business Days'
(or one Business Day's, in the case of a conversion into Base Rate Loans) prior
written notice (or telephonic notice promptly confirmed in writing) (each a
"NOTICE OF CONVERSION") specifying the Loans to be so converted, the Type of
Loans to be converted into and, if to be converted into a Borrowing of
Eurodollar Loans, the Interest Period to be initially applicable thereto. The
Administrative Agent shall give each Lender prompt notice of any such proposed
conversion affecting any of its Loans.
1.7. PRO RATA BORROWINGS. All Borrowings of Loans shall be made by the
Lenders PRO RATA on the basis of their Commitments. It is understood that no
Lender shall be responsible for any default by any other Lender in its
obligation to make Loans hereunder and that each Lender shall be obligated to
make the Loans provided to be made by it hereunder, regardless of the failure of
any other Lender to fulfill its commitments hereunder.
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1.8. INTEREST. (a) The unpaid principal amount of each Loan which is a
Base Rate Loan shall bear interest from the date of the Borrowing thereof until
maturity (whether by acceleration or otherwise) at a fluctuating rate per annum
equal to the Base Rate in effect from time to time.
(b) The unpaid principal amount of each Loan which is a Eurodollar Loan
shall bear interest from the date of the Borrowing thereof until maturity
(whether by acceleration or otherwise) at a rate per annum which shall at all
times be the relevant Eurodollar Rate PLUS 200 basis points per annum.
(c) Notwithstanding the above provisions, if a Default under section
9.1(a) or Event of Default is in existence, all outstanding amounts of principal
and, to the extent permitted by law, all overdue interest, in respect of each
Loan shall bear interest at a rate per annum equal to the Base Rate in effect
from time to time PLUS 2.25% per annum.
(d) Interest shall accrue from and including the date of any Borrowing
to but excluding the date of any repayment thereof and shall be payable (i) in
respect of each Base Rate Loan, monthly in arrears on the last Business Day of
each month, (ii) in respect of each Eurodollar Loan, on the last day of each
Interest Period applicable thereto and, in the case of an Interest Period in
excess of three months, on the dates which are successively three months after
the commencement of such Interest Period, and (iii) in respect of each Loan, on
any prepayment or conversion (on the amount prepaid or converted), at maturity
(whether by acceleration or otherwise) and, after such maturity, on demand.
(e) All computations of interest hereunder shall be made in accordance
with section 12.7(b).
(f) The Administrative Agent upon determining the interest rate for any
Borrowing shall promptly notify the Borrower and the Lenders thereof.
1.9. INTEREST PERIODS. (a) At the time the Borrower gives a Notice of
Borrowing or Notice of Conversion in respect of the making of, or conversion
into, a Borrowing of Eurodollar Loans (in the case of the initial Interest
Period applicable thereto) or prior to 1:00 P.M. (Cleveland, Ohio time) on the
third Business Day prior to the expiration of an Interest Period applicable to a
Borrowing of Eurodollar Loans, it shall have the right to elect by giving the
Administrative Agent written notice (or telephonic notice promptly confirmed in
writing) of the Interest Period applicable to such Borrowing, which Interest
Period shall, at the option of the Borrower, be a one, two, three, six, nine or
twelve month period. Notwithstanding anything to the contrary contained above:
(i) the initial Interest Period for any Borrowing of
Eurodollar Loans shall commence on the date of such Borrowing
(including the date of any conversion from a Borrowing of Base Rate
Loans) and each Interest Period occurring thereafter in respect of such
Borrowing shall commence on the day on which the next preceding
Interest Period expires;
(ii) if any Interest Period begins on a day for which there is
no numerically corresponding day in the calendar month at the end of
such Interest Period, such Interest Period shall end on the last
Business Day of such calendar month;
(iii) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day, PROVIDED that if any Interest Period
would otherwise expire on a day which is not a Business Day but is a
day of the month after which no further Business Day occurs in such
month, such Interest Period shall expire on the next preceding Business
Day; and
(iv) no Interest Period may be elected at any time when a
Default under section 9.1(a) or an Event of Default is then in
existence unless the Required Lenders otherwise agree.
(b) If upon the expiration of any Interest Period the Borrower has
failed to (or may not) elect a new Interest Period to be applicable to the
respective Borrowing of Eurodollar Loans as provided above, the Borrower shall
be deemed to have elected to convert such Borrowing to Base Rate Loans effective
as of the expiration date of such current Interest Period.
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1.10. INCREASED COSTS, ILLEGALITY, ETC. (a) In the event that (x) in
the case of clause (i) below, the Administrative Agent or (y) in the case of
clauses (ii) and (iii) below, any Lender, shall have determined on a reasonable
basis (which determination shall, absent manifest error, be final and conclusive
and binding upon all parties hereto):
(i) on any date for determining the Eurodollar Rate for any
Interest Period that, by reason of any changes arising after the
Effective Date affecting the interbank Eurodollar market, adequate and
fair means do not exist for ascertaining the applicable interest rate
on the basis provided for in the definition of Eurodollar Rate; or
(ii) at any time, that such Lender shall incur increased costs
or reductions in the amounts received or receivable hereunder in an
amount which such Lender deems material with respect to any Eurodollar
Loans (other than any increased cost or reduction in the amount
received or receivable resulting from the imposition of or a change in
the rate of taxes or similar charges) because of (x) any change since
the Effective Date in any applicable law, governmental rule,
regulation, guideline, order or request (whether or not having the
force of law), or in the interpretation or administration thereof and
including the introduction of any new law or governmental rule,
regulation, guideline, order or request (such as, for example, but not
limited to, a change in official reserve requirements, but, in all
events, excluding reserves includable in the Eurodollar Rate pursuant
to the definition thereof) and/or (y) other circumstances adversely
affecting the interbank Eurodollar market or the position of such
Lender in such market; or
(iii) at any time, that the making or continuance of any
Eurodollar Loan has become unlawful by compliance by such Lender in
good faith with any change since the Effective Date in any law,
governmental rule, regulation, guideline or order, or the
interpretation or application thereof, or would conflict with any
thereof not having the force of law but with which such Lender
customarily complies or has become impracticable as a result of a
contingency occurring after the Effective Date which materially
adversely affects the interbank Eurodollar market;
THEN, and in any such event, such Lender (or the Administrative Agent in the
case of clause (i) above) shall (x) on such date and (y) within 10 Business Days
of the date on which such event no longer exists give notice (by telephone
confirmed in writing) to the Borrower and to the Administrative Agent of such
determination (which notice the Administrative Agent shall promptly transmit to
each of the other Lenders). Thereafter (x) in the case of clause (i) above,
Eurodollar Loans shall no longer be available until such time as the
Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice by the Administrative Agent no longer
exist, and any Notice of Borrowing or Notice of Conversion given by the Borrower
with respect to Eurodollar Loans which have not yet been incurred shall be
deemed rescinded by the Borrower or, in the case of a Notice of Borrowing,
shall, at the option of the Borrower, be deemed converted into a Notice of
Borrowing for Base Rate Loans to be made on the date of Borrowing contained in
such Notice of Borrowing, (y) in the case of clause (ii) above, the Borrower
shall pay to such Lender, upon written demand therefor, such additional amounts
(in the form of an increased rate of, or a different method of calculating,
interest or otherwise as such Lender shall determine) as shall be required to
compensate such Lender, for such increased costs or reductions in amounts
receivable hereunder (a written notice as to the additional amounts owed to such
Lender, showing the basis for the calculation thereof, which basis must be
reasonable, submitted to the Borrower by such Lender shall, absent manifest
error, be final and conclusive and binding upon all parties hereto) and (z) in
the case of clause (iii) above, the Borrower shall take one of the actions
specified in section 1.10(b) as promptly as possible and, in any event, within
the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected pursuant to section 1.10(a)(iii) the
Borrower shall) either (i) if the affected Eurodollar Loan is then being made
pursuant to a Borrowing, by giving the Administrative Agent telephonic notice
(confirmed promptly in writing) thereof on the same date that the Borrower was
notified by a Lender pursuant to section 1.10(a)(ii) or (iii), cancel said
Borrowing, convert the related Notice of Borrowing into one requesting a
Borrowing of Base Rate Loans or require the affected Lender to make its
requested Loan as a Base Rate Loan, or (ii) if the affected Eurodollar Loan is
then outstanding, upon at least one Business Day's notice to the Administrative
Agent, require the affected Lender to convert each such Eurodollar Loan into a
Base Rate Loan,
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PROVIDED that if more than one Lender is affected at any time, then all affected
Lenders must be treated the same pursuant to this section 1.10(b).
(c) If any Lender shall have determined that after the Effective Date,
the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged by law with the interpretation or administration thereof, or
compliance by such Lender or its parent corporation with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank or comparable agency, in each case made
subsequent to the Effective Date, has or would have the effect of reducing by an
amount reasonably deemed by such Lender to be material the rate of return on
such Lender's or its parent corporation's capital or assets as a consequence of
such Lender's commitments or obligations hereunder to a level below that which
such Lender or its parent corporation could have achieved but for such adoption,
effectiveness, change or compliance (taking into consideration such Lender's or
its parent corporation's policies with respect to capital adequacy), then from
time to time, within 15 days after demand by such Lender (with a copy to the
Administrative Agent), the Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender or its parent corporation for
such reduction. Each Lender, upon determining in good faith that any additional
amounts will be payable pursuant to this section 1.10(c), will give prompt
written notice thereof to the Borrower, which notice shall set forth, in
reasonable detail, the basis of the calculation of such additional amounts,
which basis must be reasonable, although the failure to give any such notice
shall not release or diminish any of the Borrower's obligations to pay
additional amounts pursuant to this section 1.10(c) upon the subsequent receipt
of such notice.
(d) Notwithstanding anything in this Agreement to the contrary, (i) no
Lender shall be entitled to compensation or payment or reimbursement of other
amounts under section 1.10, 2.5 or 4.4 for any amounts incurred or accruing more
than 120 days prior to the giving of notice to the Borrower of additional costs
or other amounts of the nature described in such sections, and (ii) no Lender
shall demand compensation for any reduction referred to in section 1.10(c) or
payment or reimbursement of other amounts under section 2.5 or 4.4 if it shall
not at the time be the general policy or practice of such Lender to demand such
compensation, payment or reimbursement in similar circumstances under comparable
provisions of other credit agreements.
1.11. COMPENSATION. The Borrower shall compensate each Lender, upon its
written request (which request shall set forth the detailed basis for requesting
and the method of calculating such compensation), for all reasonable losses,
expenses and liabilities (including, without limitation, any loss, expense or
liability incurred by reason of the liquidation or reemployment of deposits or
other funds required by such Lender to fund its Eurodollar Loans) which such
Lender may sustain: (i) if for any reason (other than a default by such Lender
or the Administrative Agent) a Borrowing of Eurodollar Loans does not occur on a
date specified therefor in a Notice of Borrowing or Notice of Conversion
(whether or not withdrawn by the Borrower or deemed withdrawn pursuant to
section 1.10(a)); (ii) if any repayment, prepayment or conversion of any of its
Eurodollar Loans occurs on a date which is not the last day of an Interest
Period applicable thereto (other than any repayment or prepayment pursuant to
the last two sentences of section 1.4 hereof); (iii) if any prepayment of any of
its Eurodollar Loans is not made on any date specified in a notice of prepayment
given by the Borrower; or (iv) as a consequence of (x) any other default by the
Borrower to repay its Eurodollar Loans when required by the terms of this
Agreement or (y) an election made pursuant to section 1.10(b).
1.12. CHANGE OF LENDING OFFICE; REPLACEMENT OF LENDERS. (a) Each Lender
agrees that, upon the occurrence of any event giving rise to the operation of
section 1.10(a)(ii) or (iii), 1.10(c), 2.5 or 4.4 with respect to such Lender,
it will, if requested by the Borrower, use reasonable efforts (subject to
overall policy considerations of such Lender) to designate another lending
office for any Loans or Commitment affected by such event, PROVIDED that such
designation is made on such terms that such Lender and its lending office suffer
no economic, legal or regulatory disadvantage, with the object of avoiding the
consequence of the event giving rise to the operation of any such section.
(b) If any Lender requests any compensation, reimbursement or other
payment under section 1.10(a)(ii) or (iii), 1.10(c) or 2.5 with respect to such
Lender, or if the Borrower is required to pay any additional amount to any
Lender or Governmental Authority pursuant to section 4.4, or if any Lender is a
Defaulting Lender, then the Borrower may, at its sole expense and effort, upon
notice to such Lender and the Administrative Agent, require such Lender to
assign and delegate, without recourse (in accordance with the restrictions
contained in section 12.4(b)),all its interests,
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rights and obligations under this Agreement to an assignee that shall assume
such obligations (which assignee may be another Lender, if a Lender accepts such
assignment); PROVIDED that (i) the Borrower shall have received the prior
written consent of the Administrative Agent, which consent shall not be
unreasonably withheld, (ii) such Lender shall have received payment of an amount
equal to the outstanding principal of its Loans, accrued interest thereon,
accrued fees and all other amounts payable to it hereunder, from the assignee
(to the extent of such outstanding principal and accrued interest and fees) or
the Borrower (in the case of all other amounts), and (iii) in the case of any
such assignment resulting from a claim for compensation, reimbursement or other
payments required to be made under section 1.10(a)(ii) or (iii), 1.10(c) or 2.5
with respect to such Lender, or resulting from any required payments to any
Lender or Governmental Authority pursuant to section 4.4, such assignment will
result in a reduction in such compensation, reimbursement or payments. A Lender
shall not be required to make any such assignment and delegation if, prior
thereto, as a result of a waiver by such Lender or otherwise, the circumstances
entitling the Borrower to require such assignment and delegation cease to apply.
(c) Nothing in this section 1.12 shall affect or postpone any of the
obligations of the Borrower or the right of any Lender provided in section 1.10,
2.5 or 4.4.
SECTION 2. LETTERS OF CREDIT.
2.1. LETTERS OF CREDIT. (a) Subject to and upon the terms and
conditions herein set forth, the Borrower may request a Letter of Credit Issuer
at any time and from time to time on or after the Closing Date and prior to the
Maturity Date to issue, for the account of the Borrower and in support of (x)
worker's compensation, insurance and other obligations of the Borrower incurred
in the ordinary course of its business and/or (y) such other obligations of the
Borrower to any other person that are acceptable to the Administrative Agent and
such Letter of Credit Issuer, and subject to and upon the terms and conditions
herein set forth such Letter of Credit Issuer agrees to issue from time to time,
irrevocable standby letters of credit in such form as may be approved by such
Letter of Credit Issuer and the Administrative Agent (each such letter of
credit, and any Existing Letter of Credit described in section 2.1(d), a "LETTER
OF CREDIT" and collectively, the "LETTERS OF CREDIT").
(b) Notwithstanding the foregoing, (i) no Letter of Credit shall be
issued the Stated Amount of which, when added to the Letter of Credit
Outstandings at such time, would exceed either (x) $10,000,000 or (y) when added
to the aggregate principal amount of all Loans then outstanding, an amount equal
to the lesser of (aa) the Total Commitment at such time, or (bb) the maximum
principal amount of additional Loans which could then be incurred pursuant to
section 1.1 hereof, (ii) each Letter of Credit shall have an expiry date
occurring not later than one year after such Letter of Credit's date of
issuance, although any Letter of Credit may be renewable for successive periods
of up to 12 months, but not beyond the Business Day next preceding the Maturity
Date, on terms acceptable to the Administrative Agent and the relevant Letter of
Credit Issuer, and (iii) each Letter of Credit shall be denominated and payable
in U.S. Dollars and shall be payable only on sight, accompanied by any required
certificates, drafts or other documents..
(c) Notwithstanding the foregoing, in the event a Lender Default
exists, no Letter of Credit Issuer shall be required to issue any Letter of
Credit unless such Letter of Credit Issuer has entered into arrangements
satisfactory to it and the Borrower to eliminate such Letter of Credit Issuer's
risk with respect to the participation in Letters of Credit of the Defaulting
Lender or Lenders, including by cash collateralizing such Defaulting Lender's or
Lenders' Percentage of the Letter of Credit Outstandings.
(d) Annex IX hereto contains a description of all letters of credit
outstanding on, and to continue in effect after, the Closing Date. Each such
letter of credit issued by a bank that is or becomes a Lender under this
Agreement on the Effective Date (each, an "EXISTING LETTER OF CREDIT") shall
constitute a "Letter of Credit" for all purposes of this Agreement, issued, for
purposes of section 2.4(a), on the Closing Date, and the Borrower, the
Administrative Agent and the applicable Lenders hereby agree that, from and
after such date, the terms of this Agreement shall apply to such Letters of
Credit, superseding any other agreement theretofore applicable to them to the
extent inconsistent with the terms hereof.
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2.2. LETTER OF CREDIT REQUESTS: NOTICES OF ISSUANCE. (a) Whenever it
desires that a Letter of Credit be issued, the Borrower shall give the
Administrative Agent and the Letter of Credit Issuer written notice (including
by way of telecopier) in the form of Exhibit A-2 hereto prior to 1:00 P.M.
(Cleveland, Ohio time) at least five Business Days (or such shorter period as
may be acceptable to the relevant Letter of Credit Issuer) prior to the proposed
date of issuance (which shall be a Business Day) (each a "LETTER OF CREDIT
REQUEST"), which Letter of Credit Request shall include such supporting
documents that such Letter of Credit Issuer customarily requires in connection
therewith (including, in the case of a Letter of Credit for an account party
other than the Borrower, an application for, and if applicable, a reimbursement
agreement with respect to, such Letter of Credit). Any such documents executed
in connection with the issuance of a Letter of Credit, including the Letter of
Credit itself, are herein referred to as "LETTER OF CREDIT DOCUMENTS". In the
event of any inconsistency between any of the terms or provisions of any Letter
of Credit Document and the terms and provisions of this Agreement respecting
Letters of Credit, the terms and provisions of this Agreement shall control. The
Administrative Agent shall notify each Lender, on a monthly basis and in
reasonable detail, of the Letters of Credit Outstandings for the previous month,
and shall, if requested by any Lender, provide to such Lender a copy of any
particular Letter of Credit Request which such Lender may specify.
(b) Each Letter of Credit Issuer shall, on the date of each issuance of
a Letter of Credit by it, give the Administrative Agent, each Lender and the
Borrower written notice of the issuance of such Letter of Credit, accompanied by
a copy to the Administrative Agent of the Letter of Credit or Letters of Credit
issued by it. Each Letter of Credit Issuer shall provide to the Administrative
Agent a monthly summary describing each Letter of Credit issued by such Letter
of Credit Issuer and then outstanding.
2.3. AGREEMENT TO REPAY LETTER OF CREDIT DRAWINGS. (a) The Borrower
hereby agrees to reimburse each Letter of Credit Issuer, by making payment to
the Administrative Agent in immediately available funds at the Payment Office,
for any payment or disbursement made by such Letter of Credit Issuer under any
Letter of Credit (each such amount so paid or disbursed until reimbursed, an
"UNPAID DRAWING") immediately after, and in any event on the date on which, such
Letter of Credit Issuer notifies the Administrative Agent and the Borrower of
such payment or disbursement (which notice to the Borrower shall be delivered
reasonably promptly after any such payment or disbursement), with interest on
the amount so paid or disbursed by such Letter of Credit Issuer, to the extent
not reimbursed prior to 1:00 P.M. (Cleveland, Ohio time) on the date of such
payment or disbursement, from and including the date paid or disbursed to but
not including the date such Letter of Credit Issuer is reimbursed therefor at a
rate per annum which shall be the rate then applicable to Base Rate Loans (plus
an additional 2.25% per annum if not reimbursed by the third Business Day after
the date of such payment or disbursement), such interest also to be payable on
demand.
(b) The Borrower's obligation under this section 2.3 to reimburse each
Letter of Credit Issuer with respect to Unpaid Drawings (including, in each
case, interest thereon) shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
which the Borrower may have or have had against such Letter of Credit Issuer,
the Administrative Agent, any other Letter of Credit Issuer or any Lender,
including, without limitation, any defense based upon the failure of any drawing
under a Letter of Credit to conform to the terms of the Letter of Credit or any
non-application or misapplication by the beneficiary of the proceeds of such
drawing, PROVIDED, HOWEVER that the Borrower shall not be obligated to reimburse
a Letter of Credit Issuer for any wrongful payment made by such Letter of Credit
Issuer under a Letter of Credit as a result of acts or omissions constituting
willful misconduct or gross negligence on the part of such Letter of Credit
Issuer.
2.4. LETTER OF CREDIT PARTICIPATIONS. (a) Immediately upon the issuance
by a Letter of Credit Issuer of any Letter of Credit, such Letter of Credit
Issuer shall be deemed to have sold and transferred to each Lender, and each
Lender (each a "PARTICIPANT") shall be deemed irrevocably and unconditionally to
have purchased and received from such Letter of Credit Issuer, without recourse
or warranty, an undivided interest and participation, to the extent of such
Lender's Percentage, in such Letter of Credit, each substitute letter of credit,
each drawing made thereunder and the obligations of the Borrower under this
Agreement with respect thereto (although Letter of Credit Fees shall be payable
directly to the Administrative Agent for the account of the Lenders as provided
in section 3.1(b) and the Participants shall have no right to receive any
portion of any Facing Fees) and any security therefor or guaranty pertaining
thereto. Upon any change in the Commitments of the Lenders pursuant to section
12.4(b), it is hereby agreed that, with respect to all outstanding Letters of
Credit and Unpaid Drawings, there shall be an automatic adjustment to the
participations pursuant to this section 2.4 to reflect the new Percentages of
the assigning and assignee Lender.
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(b) In determining whether to pay under any Letter of Credit, a Letter
of Credit Issuer shall not have any obligation relative to the Participants
other than to determine that any documents required to be delivered under such
Letter of Credit have been delivered and that they appear to comply on their
face with the requirements of such Letter of Credit. Any action taken or omitted
to be taken by a Letter of Credit Issuer under or in connection with any Letter
of Credit if taken or omitted in the absence of gross negligence or willful
misconduct, shall not create for such Letter of Credit Issuer any resulting
liability.
(c) In the event that a Letter of Credit Issuer makes any payment under
any Letter of Credit and the Borrower shall not have reimbursed such amount in
full to such Letter of Credit Issuer pursuant to section 2.3(a), such Letter of
Credit Issuer shall promptly notify the Administrative Agent, and the
Administrative Agent shall promptly notify each Participant of such failure, and
each Participant shall promptly and unconditionally pay to the Administrative
Agent for the account of such Letter of Credit Issuer, the amount of such
Participant's Percentage of such payment in U.S. dollars and in same day funds,
PROVIDED, HOWEVER, that no Participant shall be obligated to pay to the
Administrative Agent its Percentage of such unreimbursed amount for any wrongful
payment made by such Letter of Credit Issuer under a Letter of Credit as a
result of acts or omissions constituting willful misconduct or gross negligence
on the part of such Letter of Credit Issuer. If the Administrative Agent so
notifies any Participant required to fund a payment under a Letter of Credit
prior to 11:00 A.M. (Cleveland, Ohio time) on any Business Day, such Participant
shall make available to the Administrative Agent for the account of the relevant
Letter of Credit Issuer such Participant's Percentage of the amount of such
payment on such Business Day in same day funds. If and to the extent such
Participant shall not have so made its Percentage of the amount of such payment
available to the Administrative Agent for the account of the relevant Letter of
Credit Issuer, such Participant agrees to pay to the Administrative Agent for
the account of such Letter of Credit Issuer, forthwith on demand such amount,
together with interest thereon, for each day from such date until the date such
amount is paid to the Administrative Agent for the account of such Letter of
Credit Issuer at the Federal Funds Effective Rate. The failure of any
Participant to make available to the Administrative Agent for the account of the
relevant Letter of Credit Issuer its Percentage of any payment under any Letter
of Credit shall not relieve any other Participant of its obligation hereunder to
make available to the Administrative Agent for the account of such Letter of
Credit Issuer its Percentage of any payment under any Letter of Credit on the
date required, as specified above, but no Participant shall be responsible for
the failure of any other Participant to make available to the Administrative
Agent for the account of such Letter of Credit Issuer such other Participant's
Percentage of any such payment.
(d) Whenever a Letter of Credit Issuer receives a payment of a
reimbursement obligation as to which the Administrative Agent has received for
the account of such Letter of Credit Issuer any payments from the Participants
pursuant to section 2.4(c) above, such Letter of Credit Issuer shall pay to the
Administrative Agent and the Administrative Agent shall promptly pay to each
Participant which has paid its Percentage thereof, in U.S. dollars and in same
day funds, an amount equal to such Participant's Percentage of the principal
amount thereof and interest thereon accruing after the purchase of the
respective participations, as and to the extent so received.
(e) The obligations of the Participants to make payments to the
Administrative Agent for the account of each Letter of Credit Issuer with
respect to Letters of Credit shall be irrevocable and not subject to
counterclaim, set-off or other defense or any other qualification or exception
whatsoever and shall be made in accordance with the terms and conditions of this
Agreement under all circumstances, including, without limitation, any of the
following circumstances:
(i) any lack of validity or enforceability of this Agreement
or any of the other Loan Documents;
(ii) the existence of any claim, set-off, defense or other
right which the Borrower may have at any time against a beneficiary
named in a Letter of Credit, any transferee of any Letter of Credit (or
any person for whom any such transferee may be acting), the
Administrative Agent, any Letter of Credit Issuer, any Lender, or other
person, whether in connection with this Agreement, any Letter of
Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transaction between the Borrower
and the beneficiary named in any such Letter of Credit), other than any
claim which the Borrower (or any Subsidiary which is the account party
with respect to a Letter of Credit) may have against any applicable
Letter of Credit Issuer for gross negligence or wilful misconduct of
such Letter of Credit Issuer in making payment under any applicable
Letter of Credit;
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(iii) any statement or any other document presented under or
in connection with any Letter of Credit or other Loan Document proving
to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect, PROVIDED
that payment by a Letter of Credit Issuer under such Letter of Credit
against presentation of such statement or document shall not have
constituted gross negligence or willful misconduct;
(iv) payment by a Letter of Credit Issuer under a Letter of
Credit against presentation of a draft or certificate that does not
comply with the terms of the Letter or Credit, except any such payment
resulting solely from the gross negligence or willful misconduct of the
Letter of Credit Issuer;
(v) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan
Documents: or
(vi) the occurrence of any Default or Event of Default.
2.5. INCREASED COSTS. If after the Effective Date, the adoption of any
applicable law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Letter of Credit Issuer or any Lender with any
request or directive (whether or not having the force of law) by any such
authority, central bank or comparable agency (in each case made subsequent to
the Effective Date) shall either (i) impose, modify or make applicable any
reserve, deposit, capital adequacy or similar requirement against Letters of
Credit issued by such Letter of Credit Issuer or such Lender's participation
therein, or (ii) shall impose on such Letter of Credit Issuer or any Lender any
other conditions affecting this Agreement, any Letter of Credit or such Lender's
participation therein; and the result of any of the foregoing is to increase the
cost to such Letter of Credit Issuer or such Lender of issuing, maintaining or
participating in any Letter of Credit, or to reduce the amount of any sum
received or receivable by such Letter of Credit Issuer or such Lender hereunder
(other than any increased cost or reduction in the amount received or receivable
resulting from the imposition of or a change in the rate of taxes or similar
charges), then, upon demand to the Borrower by such Letter of Credit Issuer or
such Lender (a copy of which notice shall be sent by such Letter of Credit
Issuer or such Lender to the Administrative Agent), the Borrower shall pay to
such Letter of Credit Issuer or such Lender such additional amount or amounts as
will compensate any such Letter of Credit Issuer or such Lender for such
increased cost or reduction. A certificate submitted to the Borrower by any
Letter of Credit Issuer or any Lender, as the case may be (a copy of which
certificate shall be sent by such Letter of Credit Issuer or such Lender to the
Administrative Agent), setting forth, in reasonable detail, the basis for the
determination of such additional amount or amounts necessary to compensate any
Letter of Credit Issuer or such Lender as aforesaid shall be conclusive and
binding on the Borrower absent manifest error, although the failure to deliver
any such certificate shall not release or diminish any of the Borrower's
obligations to pay additional amounts pursuant to this section 2.5. Reference is
hereby made to the provisions of section 1.10(d) for certain limitations upon
the rights of a Letter of Credit Issuer or Lender under this section.
2.6. OBLIGATIONS ABSOLUTE. The obligations of the Borrower under this
Agreement in respect of any Letter of Credit shall be unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement (as the same may be amended from time to time) under all
circumstances, including, without limitation, to the extent permitted by law,
the following circumstances:
(i) any lack of validity or enforceability of any agreement or
instrument the obligations under which are supported by a Letter of
Credit;
(ii) any change in the time, manner or place of payment of, or
in any other term of, all or any of the obligations of the Borrower in
respect of the Letters of Credit or any other amendment or waiver of or
any consent to departure from all or any of the Letter of Credit
Documents or any other Loan Document;
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(iii) any exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the obligations of the
Borrower in respect of the Letters of Credit;
(iv) the existence of any claim, set-off, defense or other
right that the Borrower may have at any time against any beneficiary or
any transferee of a Letter of Credit (or any persons for whom any such
beneficiary or any such transferee may be acting), the Letter of Credit
Issuer, or any other person, whether in connection with the Loan
Documents, the transactions contemplated hereby or by the Letter of
Credit Documents or any unrelated transaction, other than any claim
which the Borrower (or any Subsidiary which is the account party with
respect to a Letter of Credit) may have against any applicable Letter
of Credit Issuer for gross negligence or wilful misconduct of such
Letter of Credit Issuer in making payment under any applicable Letter
of Credit;
(v) any statement or any other document presented under or in
connection with any Letter of Credit or other Loan Document proving to
be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect, PROVIDED
that payment by a Letter of Credit Issuer under such Letter of Credit
against presentation of such statement or document shall not have
constituted gross negligence or willful misconduct;
(vi) payment by a Letter of Credit Issuer under a Letter of
Credit against presentation of a draft or certificate that does not
comply with the terms of the Letter or Credit, except any such payment
resulting solely from the gross negligence or willful misconduct of the
Letter of Credit Issuer; and
(vii) any other circumstance or happening whatsoever other
than the payment in full of all obligations hereunder in respect of any
Letter of Credit or any agreement or instrument relating to any Letter
of Credit, whether or not similar to any of the foregoing, that might
otherwise constitute a defense available to, or a discharge of, the
Borrower, other than any claim which the Borrower (or any Subsidiary
which is the account party with respect to a Letter of Credit) may have
against any applicable Letter of Credit Issuer for gross negligence or
wilful misconduct of such Letter of Credit Issuer in making payment
under any applicable Letter of Credit.
SECTION 3. FEES; COMMITMENTS.
3.1. FEES. (a) The Borrower agrees to pay to the Administrative Agent a
Commitment Commission ("COMMITMENT COMMISSION") for the account of each
Non-Defaulting Lender for the period from and including the Effective Date to
but not including the date the Total Commitment has been terminated, computed at
a rate equal to 3/8 of 1% per annum on the average daily Unutilized Commitment
of such Lender. Such Commitment Commission shall be due and payable quarterly in
arrears on the last Business Day of each March, June, September and December of
each year, commencing December 1997, and on the date upon which the Total
Commitment is terminated.
(b) The Borrower agrees to pay to the Administrative Agent, for the
account of each Non-Defaulting Lender, PRO RATA on the basis of its Percentage,
a fee in respect of each Letter of Credit (the "LETTER OF CREDIT FEE") computed
at the rate of 2.00% per annum on the daily Stated Amount of such Letter of
Credit. Accrued Letter of Credit Fees shall be due and payable quarterly in
arrears on the last Business Day of each March, June, September and December of
each year, commencing December 1997, and on the date upon which the Total
Commitment is terminated. Notwithstanding the above provisions, during any
period in which a Default under section 9.1(a) or Event of Default is in
existence, Letter of Credit Fees shall be computed and payable at 4.25% per
annum.
(c) The Borrower agrees to pay to the Administrative Agent for the
account of each Letter of Credit Issuer a fee in respect of each Letter of
Credit issued by it (the "FACING FEE") computed at the rate of 1/8 of 1% per
annum on the daily Stated Amount of such Letter of Credit. Accrued Facing Fees
shall be due and payable quarterly in arrears on the last Business Day of each
March, June, September and December of each year, commencing December 1997, and
on the date upon which the Total Commitment is terminated.
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(d) The Borrower agrees to pay directly to each Letter of Credit Issuer
upon each issuance of, drawing under and/or amendment of, a Letter of Credit
issued by it, such amount as shall at the time of such issuance, drawing or
amendment be the administrative or processing charge which such Letter of Credit
Issuer is customarily charging for issuances of, drawings under or amendments
of, letters of credit issued by it.
(e) The Borrower shall pay to the Administrative Agent on the Closing
Date and thereafter for its own account and/or for distribution to the Lenders
such fees as heretofore agreed by the Borrower and the Administrative Agent.
(f) All computations of Fees shall be made in accordance with section
12.7(b).
3.2. VOLUNTARY REDUCTION OF COMMITMENTS. Upon at least three Business
Days' prior written notice (or telephonic notice confirmed in writing) to the
Administrative Agent at its Notice Office (which notice the Administrative Agent
shall promptly transmit to each of the Lenders), the Borrower shall have the
right, without premium or penalty, to terminate or partially reduce the
Unutilized Total Commitment, PROVIDED that (i) any such termination shall apply
to proportionately and permanently reduce the Commitment of each of the Lenders,
and (ii) any partial reduction pursuant to this section 3.2 shall be in the
amount of at least $5,000,000 (or, if greater, in increments which are integral
multiples of $2,000,000).
3.3. MANDATORY TERMINATION OF COMMITMENTS, ETC. (a) The Commitment of
each Lender shall terminate on the Expiration Date unless the Closing Date has
occurred on or before such date.
(b) The Total Commitment (and the Commitment of each Lender) shall
terminate on the earlier of (x) the Maturity Date or (y) the date on which a
Change of Control occurs.
3.4. EXTENSION OF MATURITY DATE. At any time during the 30 day period
following delivery by the Borrower pursuant to section 7.1(b) of its combined
financial statements for its fiscal year then most recently ended after the date
hereof, and annually thereafter during the 30 day period following delivery by
the Borrower of its combined financial statements pursuant to section 7.1(b),
the Borrower may, by written notice to the Administrative Agent, request the
Administrative Agent to determine if all of the Lenders are then willing to
extend the Maturity Date for an additional year. If the Borrower so requests,
the Administrative Agent will so advise the Lenders. If the Lenders in their
sole discretion are all willing to so extend the Maturity Date, the Borrower,
the Administrative Agent and all of the Lenders (including each Letter of Credit
Issuer) shall execute and deliver a definitive written instrument so extending
the Maturity Date. No such extension of the Maturity Date shall be valid or
effective for any purpose unless such definitive written instrument is so signed
and delivered within 60 days following the giving by the Administrative Agent of
notice to the Lenders that the Borrower has requested such an extension.
SECTION 4. PAYMENTS.
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4.1. VOLUNTARY PREPAYMENTS. The Borrower shall have the right to prepay
Loans, in whole or in part, without premium or penalty, from time to time on the
following terms and conditions: (i) the Borrower shall give the Administrative
Agent at the Payment Office written notice (or telephonic notice promptly
confirmed in writing) of its intent to prepay the Loans, the amount of such
prepayment and (in the case of Eurodollar Loans) the specific Borrowing(s)
pursuant to which made, which notice shall be received by the Administrative
Agent by 1:00 P.M. (Cleveland, Ohio time) one Business Day prior to the date of
such prepayment (and which notice shall promptly be transmitted by the
Administrative Agent to each of the Lenders); (ii) each partial prepayment of
any Borrowing shall be in an aggregate principal of at least $5,000,000 or an
integral multiple of $2,000,000 in excess thereof, in the case of a Borrowing
consisting of Eurodollar Loans, and at least $500,000 or an integral multiple of
$100,000 in excess thereof, in the case of a Borrowing consisting of Base Rate
Loans, PROVIDED that no partial prepayment of Eurodollar Loans made pursuant to
a Borrowing shall reduce the aggregate principal amount of the Loans outstanding
pursuant to such Borrowing to an amount less than the Minimum Borrowing Amount
applicable thereto; (iii) each prepayment in respect of any Loans made pursuant
to a Borrowing shall be applied PRO RATA among such Loans; and (iv) each
prepayment of Eurodollar Loans pursuant to this section 4.1 on any date other
than the last day of the Interest period applicable thereto shall be accompanied
by any amounts payable in respect thereof under section 1.11.
4.2. MANDATORY PREPAYMENTS. (a) If on any date (after giving effect to
any other payments on such date) the sum of (i) the aggregate outstanding
principal amount of Loans PLUS (ii) the aggregate amount of Letter of Credit
Outstandings, exceeds the Total Commitment as then in effect, the Borrower shall
prepay on such date that principal amount of Loans and, after Loans have been
paid in full, Unpaid Drawings, in an aggregate amount equal to such excess. If,
after giving effect to the prepayment of Loans and Unpaid Drawings, the
aggregate amount of Letter of Credit Outstandings exceeds the Total Commitment
as then in effect, the Borrower shall pay to the Administrative Agent an amount
in cash and/or Cash Equivalents equal to such excess and the Administrative
Agent shall hold such payment as security for the obligations of the Borrower
hereunder pursuant to a cash collateral agreement to be entered into in form and
substance reasonably satisfactory to the Administrative Agent and the Borrower
(which shall permit certain investments in Cash Equivalents satisfactory to the
Administrative Agent and the Borrower until the proceeds are applied to the
secured obligations).
(b) If on any date (after giving effect to any other payments on such
date) the sum of (i) the aggregate outstanding principal amount of Loans, PLUS
(ii) the Letter of Credit Outstandings, PLUS (iii) the Aggregate Measured Swap
Credit Risk (if any) of all Designated Hedge Agreements, EXCEEDS the lesser of
(A) the Aggregate Borrowing Base then in effect, or (B) the sum of (x) 60% of
the appraised fair market value of the Eligible Real Estate constituting a part
of the Mortgaged Property hereunder on the Closing Date and which remains
Mortgaged Property hereunder, as determined on the basis of the appraisals
referred to in section 5.1(t), and (y) 60% of the Appraised Value of any
Additional Property or Substitute Property, determined for any such Property as
of the date such Property becomes a Mortgaged Property hereunder in compliance
with section 7.17, as determined on the basis of the appraisal with respect
thereto referred to in section 7.17, the Borrower shall prepay on such date that
principal amount of Loans and, after all Loans have been paid in full, Unpaid
Drawings, in an aggregate amount equal to such excess.
(c) On the date of which a Change of Control occurs the then
outstanding principal amount of all Loans, if any, shall become due and payable
and shall be prepaid in full, and the Borrower shall contemporaneously either
(i) cause all outstanding Letters of Credit to be surrendered for cancellation
(any such Letters of Credit to be replaced by letters of credit issued by other
financial institutions), or (ii) the Borrower shall pay to the Administrative
Agent an amount in cash and/or Cash Equivalents equal to 100% of the Letter of
Credit Outstandings and the Administrative Agent shall hold such payment as
security for the obligations of the Borrower hereunder pursuant to a cash
collateral agreement to be entered into in form and substance reasonably
satisfactory to the Administrative Agent and the Borrower (which shall permit
certain investments in Cash Equivalents satisfactory to the Administrative Agent
and the Borrower until the proceeds are applied to the secured obligations).
(d) With respect to each prepayment of Loans required by this section
4.2, the Borrower shall designate the Types of Loans which are to be prepaid and
the specific Borrowing(s) pursuant to which such prepayment is to be made,
PROVIDED that (i) the Borrower shall first so designate all Loans that are Base
Rate Loans and Eurodollar Loans with Interest Periods ending on the date of
prepayment prior to designating any other Eurodollar Loans for prepayment, (ii)
if the outstanding principal amount of Eurodollar Loans made pursuant to a
Borrowing is reduced below the
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applicable Minimum Borrowing Amount as a result of any such prepayment, then all
the Loans outstanding pursuant to such Borrowing shall be converted into Base
Rate Loans, and (iii) each prepayment of any Loans made pursuant to a Borrowing
shall be applied PRO RATA among such Loans. In the absence of a designation by
the Borrower as described in the preceding sentence, the Administrative Agent
shall, subject to the above, make such designation in its sole discretion with a
view, but no obligation, to minimize breakage costs owing under section 1.11.
4.3. METHOD AND PLACE OF PAYMENT. Except as otherwise specifically
provided herein, all payments under this Agreement shall be made to the
Administrative Agent for the ratable (based on its PRO RATA share) account of
the Lenders entitled thereto, not later than 1:00 P.M. (Cleveland, Ohio time) on
the date when due and shall be made in immediately available funds and in lawful
money of the United States of America at the Payment Office, it being understood
that written notice by the Borrower to the Administrative Agent to make a
payment from the funds in the Borrower's account at the Payment Office shall
constitute the making of such payment to the extent of such funds held in such
account. Any payments under this Agreement which are made later than 1:00 P.M.
(Cleveland, Ohio time) shall be deemed to have been made on the next succeeding
Business Day. Whenever any payment to be made hereunder shall be stated to be
due on a day which is not a Business Day, the due date thereof shall be extended
to the next succeeding Business Day and, with respect to payments of principal,
interest shall be payable during such extension at the applicable rate in effect
immediately prior to such extension.
4.4. NET PAYMENTS. (a) All payments made by the Borrower hereunder,
under any Note or any other Loan Document, will be made without setoff,
counterclaim or other defense. Except as provided for in section 4.4(b), all
such payments will be made free and clear of, and without deduction or
withholding for, any present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature now or hereafter imposed by any
jurisdiction or by any political subdivision or taxing authority thereof or
therein with respect to such payments (but excluding, except as provided in the
second succeeding sentence, any tax, imposed on or measured by the net income or
net profits of a Lender pursuant to the laws of the jurisdiction under which
such Lender is organized or the jurisdiction in which the principal office or
applicable lending office of such Lender is located or any subdivision thereof
or therein) and all interest, penalties or similar liabilities with respect to
such non-excluded taxes, levies, imposts, duties, fees, assessments or other
charges (all such nonexcluded taxes levies, imposts, duties, fees assessments or
other charges being referred to collectively as "TAXES"). If any Taxes are so
levied or imposed, the Borrower agrees to pay the full amount of such Taxes and
such additional amounts as may be necessary so that every payment of all amounts
due hereunder, under any Note or under any other Loan Document, after
withholding or deduction for or on account of any Taxes will not be less than
the amount provided for herein or in such Note or in such other Loan Document.
If any amounts are payable in respect of Taxes pursuant to the preceding
sentence, the Borrower agrees to reimburse each Lender, upon the written request
of such Lender for taxes imposed on or measured by the net income or profits of
such Lender pursuant to the laws of the jurisdiction in which such Lender is
organized or in which the principal office or applicable lending office of such
Lender is located or under the laws of any political subdivision or taxing
authority of any such jurisdiction in which the principal office or applicable
lending office of such Lender is located and for any withholding of income or
similar taxes imposed by the United States of America as such Lender shall
determine are payable by, or withheld from, such Lender in respect of such
amounts so paid to or on behalf of such Lender pursuant to the preceding
sentence and in respect of any amounts paid to or on behalf of such Lender
pursuant to this sentence, which request shall be accompanied by a statement
from such Lender setting forth, in reasonable detail, the computations used in
determining such amounts. The Borrower will furnish to the Administrative Agent
within 45 days after the date the payment of any Taxes, or any withholding or
deduction on account thereof, is due pursuant to applicable law certified copies
of tax receipts, or other evidence satisfactory to the Lender, evidencing such
payment by the Borrower. The Borrower will indemnify and hold harmless the
Administrative Agent and each Lender, and reimburse the Administrative Agent or
such Lender upon its written request, for the amount of any Taxes so levied or
imposed and paid or withheld by such Lender.
(b) Each Lender that is not a United States person (as such term is
defined in section 7701(a)(30) of the Code) for Federal income tax purposes
agrees to provide to the Borrower and the Administrative Agent on or prior to
the Effective Date, or in the cases of a Lender that is an assignee or
transferee of an interest under this Agreement pursuant to section 12.4 (unless
the respective Lender was already a Lender hereunder immediately prior to such
assignment or transfer and such Lender is in compliance with the provisions of
this section 4.4(b)), on the date of such assignment or transfer to such Lender,
(i) two accurate and complete original signed copies of Internal Revenue Service
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Form 4224 or 1001 (or successor forms) certifying to such Lender's entitlement
to a complete exemption from United States withholding tax with respect to
payments to be made under this Agreement, any Note or any other Loan Document,
or (ii) if the Lender is not a "bank" within the meaning of section 881(c)(3)(A)
of the Code and cannot deliver either Internal Revenue Service Form 1001 or 4224
pursuant to clause (i) above, (x) a certificate substantially in the form of
Exhibit I (any such certificate, a "SECTION 4.4(B)(II) CERTIFICATE") and (y) two
accurate and complete original signed copies of Internal Revenue Service Form
W-8 (or successor form) certifying to such Lender's entitlement to a complete
exemption from United States withholding tax with respect to payments of
interest to be made under this Agreement, any Note or any other Loan Document.
In addition, each Lender agrees that from time to time after the Effective Date,
when a lapse in time or change in circumstances renders the previous
certification obsolete or inaccurate in any material respect, it will deliver to
the Borrower and the Administrative Agent two new accurate and complete original
signed copies of Internal Revenue Service Form 4224 or 1001, or Form W-8 and a
section 4.4(b)(ii) Certificate, as the case may be, and such other forms as may
be required in order to confirm or establish the entitlement of such Lender to a
continued exemption from or reduction in United States withholding tax with
respect to payments under this Agreement, any Note or any other Loan Document,
or it shall immediately notify the Borrower and the Administrative Agent of its
inability to deliver any such Form or Certificate, in which case such Lender
shall not be required to deliver any such Form or Certificate pursuant to this
section 4.4(b). Notwithstanding anything to the contrary contained in section
4.4(a), but subject to section 12.4(b) and the immediately succeeding sentence,
(x) the Borrower shall be entitled, to the extent it is required to do so by
law, to deduct or withhold income or other similar taxes imposed by the United
States (or any political subdivision or taxing authority thereof or therein)
from interest, fees or other amounts payable hereunder for the account of any
Lender which is not a United States person (as such term is defined in section
7701(a)(30) of the Code) for United States federal income tax purposes and which
has not provided to the Borrower such forms that establish a complete exemption
from such deduction or withholding and (y) the Borrower shall not be obligated
pursuant to section 4.4(a) hereof to gross-up payments to be made to a Lender in
respect of income or similar taxes imposed by the United States or any
additional amounts with respect thereto (I) if such Lender has not provided to
the Borrower the Internal Revenue Service forms required to be provided to the
Borrower pursuant to this section 4.4(b) or (II) in the case of a payment other
than interest, to a Lender described in clause (ii) above, to the extent that
such forms do not establish a complete exemption from withholding of such taxes.
Notwithstanding anything to the contrary contained in the preceding sentence or
elsewhere in this section 4.4 and except as specifically provided for in section
12.4(b), the Borrower agrees to pay additional amounts and indemnify each Lender
in the manner set forth in section 4.4(a) (without regard to the identity of the
jurisdiction requiring the deduction or withholding) in respect of any Taxes
deducted or withheld by it as described in the previous sentence as a result of
any changes after the Effective Date in any applicable law, treaty, governmental
rule, regulation, guideline or order, or in the interpretation thereof, relating
to the deducting or withholding of income or similar Taxes.
(c) If any Lender, in its sole opinion, determines that it has finally
and irrevocably received or been granted a refund in respect of any Taxes paid
as to which indemnification has been paid by the Borrower pursuant to this
section, it shall promptly remit such refund (including any interest received in
respect thereof), net of all out-of-pocket costs and expenses; provided, that
the Borrower agrees to promptly return any such refund (plus interest) to such
Lender in the event such Lender is required to repay such refund to the relevant
taxing authority. Any such Lender shall provide the Borrower with a copy of any
notice of assessment from the relevant taxing authority (redacting any unrelated
confidential information contained therein) requiring repayment of such refund.
Nothing contained herein shall impose an obligation on any Lender to apply for
any such refund.
(d) Reference is hereby made to the provisions of section 1.10(d) for
certain limitations upon the rights of a Lender under this section.
SECTION 5. CONDITIONS PRECEDENT.
5.1. CONDITIONS PRECEDENT AT CLOSING DATE. The obligation of the
Lenders to make Loans, and of any Letter of Credit Issuer to issue Letters of
Credit, is subject to the satisfaction of each of the following conditions on or
prior to the Closing Date as indicated below:
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(A) EFFECTIVENESS; NOTES. On or prior to the Closing Date, (i)
the Effective Date shall have occurred, (ii) there shall have been
delivered to the Administrative Agent for the account of each Lender
the appropriate Note executed by the Borrower, in each case, in the
amount, maturity and as otherwise provided herein, and (iii) the Notes
previously issued under the Original Credit Agreement shall have been
returned to the Borrower.
(B) OPINIONS OF COUNSEL. On or prior to the Closing Date, the
Administrative Agent shall have received (i) an opinion, dated the
Closing Date, addressed to the Administrative Agent and each of the
Lenders, from Xxxxxxxx Xxxx & Xxxxx LLP, special counsel to the
Borrower and the Management Company, substantially in the form of
Exhibit C hereto and covering such other matters incident to the
transactions contemplated hereby as the Administrative Agent may
reasonably request, (ii) copies of the opinions from local counsel to
the Borrower in Pennsylvania, Minnesota, Iowa, Georgia and North
Carolina, dated on or about the Initial Borrowing Date under the
Original Credit Agreement, which were delivered thereunder, and (iii)
opinions, dated on or about the Closing Date, from local counsel to the
Borrower in Oregon, West Virginia and Washington (such jurisdictions
being jurisdictions in which Mortgaged Properties covered by the
Mortgages specified in section 5.1(g) are located which are outside
Ohio and not jurisdictions as to which opinions of local counsel were
previously delivered in 1996 as referred to in clause (ii) above),
covering such matters in such jurisdictions incident to the
transactions contemplated hereby as the Administrative Agent may
reasonably request, all such opinions to be in form and substance
satisfactory to the Administrative Agent.
(C) CERTIFIED COPIES OF CHARTER DOCUMENTS AND BYLAWS. On or
prior to the Closing Date the Administrative Agent shall have received
from the Borrower, in sufficient quantities for the Lenders, (i) a
copy, certified by a duly authorized officer of the Borrower to be true
and complete on and as of the Closing Date, of the Borrower's
Declaration of Trust and by-laws or code of regulations as in effect on
the Closing Date (together with any and all amendments thereto); (ii) a
copy, certified by a duly authorized officer of the Management Company,
of the Management Company's Certificate of Incorporation and by-laws as
in effect on the Closing Date (together with any and all amendments
thereto); (iii) the charter or other organizational documents of the
Management Company, certified by the Delaware Secretary of State,
together with a certificate of good standing for the Management Company
issued by the Delaware Secretary of State as of a recent date; (iv) the
organizational documents of the Borrower, certified as of a recent date
by the Ohio Secretary of State as being validly registered and in full
force and effect; (v) a Certificate of Good Standing for each of the
Borrower and the Management Company, each issued by the Ohio Secretary
of State as of a recent date; and (vi) certificates, issued by the
Secretary of State in each other jurisdiction in which a Mortgaged
Property is located and the Borrower or the Management Company is
qualified to do business (it being noted that the Borrower believes it
is not required to be qualified to do business in any jurisdiction
other than Ohio), each dated as of a recent date, confirming that the
Borrower and the Management Company are duly qualified and in good
standing in each such jurisdiction.
(D) AUTHORIZATION. On or prior to the Closing Date the
Administrative Agent shall have received from the Borrower, in
sufficient quantities for the Lenders, copies, certified by a duly
authorized officer of each such party to be true and complete on and as
of the date thereof, of records of all organizational action taken by
the Borrower and the Management Company, respectively, to authorize (i)
the execution and delivery of this Agreement and the other Loan
Documents to which it is or is to become a party as contemplated or
required by this Agreement; (ii) its performance of all of its
obligations under each of such documents; and (iii) the making by the
Borrower of the borrowings contemplated hereby.
(E) INCUMBENCY CERTIFICATES. On or prior to the Closing Date
the Administrative Agent shall have received from each of the Borrower
and the Management Company, in sufficient quantities for the Lenders,
an incumbency certificate, dated the date of delivery thereof, signed
by a duly authorized officer of such respective party and giving the
name and bearing a specimen signature of each individual who shall be
authorized (i) to sign, in the name and on behalf of each such party,
each of the Loan Documents to which it is to become a party on or prior
to the Closing Date; and (ii) to give notices and to take other action
on behalf of the Borrower or the Management Company, as the case may
be, under the Loan Documents.
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(F) LOAN DOCUMENTS. The Notes and all of the other Loan
Documents and Security Documents shall have been duly and properly
authorized, executed and delivered by the Borrower and, where
appropriate, by the Management Company, and all such documents shall be
in full force and effect on and as of the Closing Date. Executed
originals of this Agreement and executed or photocopies of originals of
each of the other Loan Documents (other than the Notes, which shall
have been delivered as provided above) shall have been delivered to the
Administrative Agent in sufficient quantities for the Lenders.
(G) ADDITIONAL MORTGAGED PROPERTIES. Either (x) the Borrower
and the Management Company shall have taken and completed all of the
following actions with respect to each of the last five locations
described on Annex III hereto which is a Mortgaged Property as of the
Closing Date, or (y) the Borrower shall have failed to complete any of
the actions specified in clause (ii) or (iii) below, but otherwise
shall have completed all of the other actions specified below, in which
event the provisions of section 5.2 shall become effective:
(i) duly executed and caused to be filed for record
in the real property records of the county in which the
affected real property encumbered thereby is located its
Mortgage, its Lease Assignment and such Uniform Commercial
Code financing statements as the Administrative Agent may deem
necessary or appropriate to create and/or to perfect the first
and paramount lien and security interest in favor of the
Administrative Agent in the real and personal property
described therein;
(ii) furnished to the Administrative Agent an
original loan policy of title insurance (ALTA 1970 Form B)
issued by a title insurance company satisfactory to the
Administrative Agent (the "TITLE COMPANY"), insuring, in
amounts (taking into account the Appraised Values of the
respective Mortgaged Properties), on terms and with such
affirmative coverages or endorsements as the Administrative
Agent may require (including but not limited to the so-called
"revolving credit" and "variable rate" endorsements and such
facultative direct-access reinsurance treaties as the
Administrative Agent may require), that each such Mortgage is
a valid first lien upon the real property encumbered thereby,
subject only to such exceptions or matters affecting title as
the Administrative Agent may approve in writing;
(iii) furnished to the Administrative Agent a current
as-built survey showing such matters as may be required by the
Administrative Agent, which survey shall be: (A) acceptable in
form and content to the Administrative Agent; (B) certified to
the Administrative Agent and the Title Company; and (C)
prepared by a registered surveyor acceptable to the
Administrative Agent in accordance with the minimum standard
detail requirements for ALTA/ACSM Title Surveys, so as to
eliminate any and all "survey exceptions" from the title
insurance policies described above, and containing (1) a note
as to the zoning classification of the subject property; and
(2) a statement of whether the subject property is located in
a flood hazard zone and, if applicable, the Flood Map panel
number, suffix, map date and zone for the subject property;
and
(iv) provided to the Administrative Agent a current
rent-roll for each Mortgaged Property.
In addition, the Borrower shall have paid all costs and expenses
payable in connection with all of the actions taken pursuant to this
section 5.1(g), including but not limited to (x) all mortgage,
intangibles or similar taxes or fees, however characterized, payable in
respect of this Agreement, the execution and delivery of the Notes, any
of the Mortgages or any of the other Loan Documents or the recording of
any of the same; and (y) all expenses and premiums of the Title Company
in connection with the issuance of such policies of title insurance and
to all costs and expenses required for the recording of the Mortgages
or any other Loan Documents in the appropriate public records.
(H) PREVIOUSLY MORTGAGED PROPERTIES. Each of the Mortgages and
Lease Assignments executed and delivered by the Borrower and the
Management Company pursuant to the Original Credit Agreement shall
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be in full force and effect, and as of the Closing Date either (x) the
Borrower and the Management Company shall have taken and completed all
of the following actions with respect to each location which was a
Mortgaged Property under the Original Credit Agreement as of the
Closing Date, or (y) the Borrower shall have failed to complete any of
the actions specified in clause (i), (iii) or (iv) below, but otherwise
shall have completed all of the other actions specified below, in which
event the provisions of section 5.2 shall become effective:
(i) duly caused to be executed by all parties thereto
and caused to be filed for record in the real property records
of the county in which the affected real property encumbered
thereby is located amendments to its Mortgage and its Lease
Assignment, relating to the Kandi Mall, substantially in the
forms attached as Exhibits D-3 and E-3 hereto;
(ii) duly executed and caused to be filed for record
in the real property records of the county in which the
affected real property encumbered thereby is located
amendments to its Mortgage and its Lease Assignment, relating
to the other Mortgaged Properties under the Original Credit
Agreement, substantially in the forms attached as Exhibits
X-0, X-0 and D-4 through D-6 and E-1, E-2 and E-4 through E-6
hereto;
(iii) furnished to the Administrative Agent an
original endorsement to the previously issued loan policy of
title insurance (ALTA 1970 Form B) issued by the Title Company
with respect thereto as contemplated by the Original Credit
Agreement, satisfactory to the Administrative Agent, insuring,
in amounts (taking into account the Appraised Values of the
respective Mortgaged Properties and the terms of the Mortgage
covering the Kandi Mall), and on terms as the Administrative
Agent may require, that each such Mortgage is a valid first
lien upon the real property encumbered thereby, subject only
to such exceptions or matters affecting title as the
Administrative Agent may approve in writing, and that such
lien extends to the increased Obligations contemplated by this
Agreement;
(iv) furnished to the Administrative Agent the
as-built survey with respect thereto which was required to be
furnished pursuant to the Original Credit Agreement, updated
and recertified in such manner as may be required in order for
the Title Company to continue to delete the "survey exception"
in connection with the endorsement to the Title Policy
referred to above; and
(v) provided to the Administrative Agent a current
rent-roll for each Mortgaged Property.
In addition, the Borrower shall have paid all costs and expenses
payable in connection with all of the actions taken pursuant to this
section 5.1(h), including but not limited to (x) all mortgage,
intangibles or similar taxes or fees, however characterized, payable in
respect of this Agreement, the execution and delivery of the Notes, any
of the Mortgages or any of the other Loan Documents or the recording of
any of the same; and (y) all expenses and premiums of the Title Company
in connection with the issuance of such policies of title insurance
(and endorsements thereto) and to all costs and expenses required for
the recording of the Mortgages or any other Loan Documents (including
in each case the amendments thereto referred to above) in the
appropriate public records.
(I) LEGALITY OF TRANSACTIONS. No change in applicable law
shall have occurred as a consequence of which it shall have become and
continue to be unlawful (i) for the Administrative Agent or any Lender
to perform any of its agreements or obligations under any of the Loan
Documents to which it is a party on the Closing Date; or (ii) for the
Borrower or the Management Company to perform any of its agreements or
obligations under any of the Loan Documents to which it is a party on
the Closing Date.
(J) COMPLIANCE WITH LAWS. All of the borrowings made or to be
made, and the other financial accommodations to be provided, under this
Agreement are and shall be in compliance with the requirements of all
applicable laws, regulations, rules and orders, including without
limitation the Environmental Laws and
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the requirements imposed by the SEC or by the Board of Governors of the
Federal Reserve System under Regulations U, G and X.
(K) FEES AND EXPENSES. The Borrower shall have (i) paid all
agency, syndication, up front, closing and similar fees required under
this Agreement to be paid by the Borrower on or prior to the Closing
Date; (ii) reimbursed the Administrative Agent for all reasonable
out-of-pocket fees and expenses of its special counsel, and all title
and survey companies, appraisers, environmental consultants and other
consultants retained or used by it connection with this Agreement, to
the extent invoiced on or prior to the Closing Date; and (iii)
reimbursed the Administrative Agent for any additional reasonable
out-of-pocket costs and expenses incurred in connection with this
Agreement up to an aggregate maximum of $20,000, to the extent invoiced
on or prior to the Closing Date.
(L) CHANGES; NONE ADVERSE. From the date of the most recent
balance sheets referred to in section 6.5 of this Agreement to the
Closing Date, no changes shall have occurred in the assets,
liabilities, financial condition, business, operations or prospects of
the Borrower or the Borrower and its Subsidiaries taken as a whole
which, individually or in the aggregate, are materially adverse to the
Borrower or the Borrower and its Subsidiaries taken as a whole.
(M) OFFICER'S CERTIFICATES. The Administrative Agent shall
have received from each of the Borrower and the Management Company, in
sufficient quantities for the Lenders, a certificate, dated the date of
delivery thereof, signed by such party's respective duly authorized
officers and certifying, on terms acceptable to the Administrative
Agent and the Lenders, that each of the representations and warranties
of such party in this Agreement and in the other Loan Documents was
true and correct when made, and is true and correct on and as of the
date thereof.
(N) COMPLIANCE CERTIFICATE. The Administrative Agent shall
have received, in sufficient quantities for the Lenders, a Compliance
Certificate, dated as of a recent date on or prior to the Closing Date,
the required calculations under which shall demonstrate the compliance
by the Borrower with the covenants of this Agreement required to be
measured in such Certificate.
(O) FINANCIAL STATEMENTS. The Administrative Agent and the
Lenders shall have received the financial statements referred to in
section 6.5, certified by an officer of the Borrower, and shall have
been satisfied that such financial statements accurately reflect the
financial status and condition of the Borrower and its Subsidiaries and
the Management Company.
(P) OTHER APPROVALS, ETC. The Administrative Agent shall have
received, in sufficient quantities for the Lenders, copies of such
other approvals, opinions, certificates, instruments and documents with
respect to the Mortgaged Properties or the transactions described
herein as it may reasonably request.
(Q) INSURANCE POLICIES. The Administrative Agent shall have
received evidence of insurance complying with the requirements of the
Mortgages, in form and substance satisfactory to the Administrative
Agent and with respect to all casualty insurance, naming the
Administrative Agent as an additional insured and loss payee.
(R) SOLVENCY. The Administrative Agent shall have received
from the chief financial officer of the Borrower a certificate in the
form of Exhibit H hereto, expressing opinions of value and other
appropriate facts or information regarding the solvency of the Borrower
and its Subsidiaries taken as a whole.
(S) ENVIRONMENTAL REPORTS. The Administrative Agent and each
Lender shall have received (i) the environmental reports with respect
to the Mortgaged Properties referred to in section 5.1(h) which were
delivered pursuant to the Original Credit Agreement, and (ii) Phase I
environmental assessments from PSI (or such other firm as may be
satisfactory to the Administrative Agent and each of the Lenders) and
in form and substance satisfactory to the Administrative Agent and each
of the Lenders, and covering each of the Mortgaged Properties referred
to in section 5.1(g).
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(T) APPRAISALS. The Administrative Agent and each Lender shall
have received appraisals, satisfactory in form and substance to the
Administrative Agent and each Lender, dated not more than 60 days prior
to the Closing Date, from one or more nationally recognized appraisal
firms, satisfactory to the Administrative Agent and each of the
Lenders, covering each of the Mortgaged Properties referred to in
section 5.1(g) and (h), which appraisals shall set forth for each such
Mortgaged Property the "fair market value" thereof (i.e., the amount at
which such Mortgaged Property would equitably exchange between a
willing buyer and a willing seller, neither being under a compulsion
and both having reasonable knowledge of all relevant facts on the
premise that such Mortgaged Property will continue in its present use
as part of an ongoing business enterprise), in each case as determined
in accordance with sound appraisal standards.
(U) ORIGINAL CREDIT AGREEMENT, ETC. Immediately prior to the
closing on the Closing Date, (i) the Borrower shall have prepaid, to
the Closing Date hereunder, all accrued interest on the Loans
outstanding under the Original Credit Agreement, and all accrued
Commitment Commission and Letter of Credit Fees under the Original
Credit Agreement; and (ii) the Loans and Commitments of the Lenders
under the Original Credit Agreement shall have been assigned to NCB,
and re-assigned by NCB to the Lenders hereunder, so that after giving
effect thereto the Loans and Commitments of the Lenders hereunder are
in proportion to the Commitments of the Lenders as indicated in Annex
I.
(V) PROCEEDINGS AND DOCUMENTS. All corporate and legal
proceedings and all instruments and agreements in connection with the
transactions contemplated by this Agreement and the other Loan
Documents shall be reasonably satisfactory in form and substance to the
Administrative Agent, and the Administrative Agent shall have received
all information and copies of all certificates, documents, and papers,
including good standing certificates and any other records of corporate
proceedings and governmental approvals, if any, which the
Administrative Agent or any Lender may have reasonably requested in
connection therewith, such documents and papers, where appropriate, to
be certified by proper corporate or Governmental Authorities.
5.2. CONDITIONS PRECEDENT TO CERTAIN CREDIT EVENTS. If as of the
Closing Date, any of the conditions specified in clause (ii) or (iii) of section
5.1(g), or in clause (i), (iii) or (iv) of section 5.1(h), is not satisfied,
this section 5.2 shall become effective and
(a) the Borrower covenants to satisfy such conditions within
60 days following the Closing Date;
and
(b) until such conditions are satisfied and the Administrative
Agent gives written notice to the Borrower and the Lenders that such
conditions are satisfied, the obligations of the Lenders to make each
Loan and/or of a Letter of Credit Issuer to issue each Letter of Credit
is subject, at the time thereof, to the satisfaction of the following
conditions:
(i) if the condition specified in clause (ii) of
section 5.1(g) or clause (iii) of section 5.1(h) has not yet
been satisfied because of the refusal of the Title Company to
insure over any pre-existing mortgage, deed of trust or deed
to secure debt created by a prior owner and encumbering any
particular Mortgaged Property which might have priority over
the Mortgage covering such Mortgaged Property if the
indebtedness secured thereby were still outstanding, despite
assurances from the Borrower that it believes such
indebtedness is no longer outstanding, then even though the
Borrower may have advised the Administrative Agent that it
believes such indebtedness is no longer outstanding, the
aggregate outstanding Loans and Letter of Credit Outstandings
shall not exceed such amount as the Administrative Agent
establishes, in its reasonable discretion, taking into account
the principal amount of and accrued interest on the
indebtedness which is or may be secured by such pre-existing
mortgage, deed of trust or deed to secure debt, to reflect a
reasonable "hold-back" for all such conditions which are not
satisfied;
(ii) if any of the conditions specified in clause
(ii) or (iii) of section 5.1(g) or in clause (i), (iii) or
(iv) of section 5.1(h) has not yet been satisfied because of
the failure to deliver a survey
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described therein, the failure of the Title Company to provide
an endorsement to a Title Policy which deletes the so-called
"survey exception", or the failure of the Borrower to deliver
the documents referred to in clause (i) of section 5.1(h)
because of delays in obtaining signatures of parties who are
not Affiliates of the Borrower, the aggregate outstanding
Loans and Letter of Credit Outstandings shall not exceed the
lesser of (x) 60% of the aggregate appraised values of the
Mortgaged Properties, or (y) the Aggregate Borrowing Base, in
each case computed only with respect to (1) those Mortgaged
Properties (or distinct portions thereof) referred to in
section 5.1(g), and (2) those Mortgaged Properties (or
distinct portions thereof) referred to in section 5.1(h), in
each case as to which all of the conditions specified in such
clauses of section 5.1(g) or section 5.1(h), as applicable,
have been satisfied; and
(iii) if any of the other conditions specified in
clause (ii) or (iii) of section 5.1(g) or clause (iii) or (iv)
of section 5.1(h) has not yet been satisfied, the aggregate
outstanding Loans and Letter of Credit Outstandings shall not
exceed such amount as the Administrative Agent establishes, in
its reasonable discretion, as appropriate to reflect a
reasonable "hold-back" for all such conditions which are not
satisfied.
5.3. CONDITIONS PRECEDENT TO ALL CREDIT EVENTS. The obligations of the
Lenders to make each Loan and/or of a Letter of Credit Issuer to issue each
Letter of Credit is subject, at the time thereof, to the satisfaction of the
following conditions:
(A) NOTICE OF BORROWING, ETC. The Administrative Agent shall
have received a Notice of Borrowing meeting the requirements of section
1.3 with respect to the incurrence of Loans or a Letter of Credit
Request meeting the requirement of section 2.2 with respect to the
issuance of a Letter of Credit.
(B) NO DEFAULT; REPRESENTATIONS AND WARRANTIES. At the time of
each Credit Event and also after giving effect thereto, (i) there shall
exist no Default or Event of Default and (ii) all representations and
warranties of the Credit Parties contained herein or in the other Loan
Documents shall be true and correct in all material respects with the
same effect as though such representations and warranties had been made
on and as of the date of such Credit Event, except to the extent that
such representations and warranties expressly relate to an earlier
specified date, in which case such representations and warranties shall
have been true and correct in all material respects as of the date when
made.
(C) BORROWING BASE LIMIT MATTERS. At the time of such Credit
Event, the Administrative Agent shall have received such Compliance
Certificates and rent rolls referred to in section 7.1(e) as are
required to be delivered to the Administrative Agent on or prior to the
date of such Credit Event, and such other evidence as the
Administrative Agent may reasonably require, in order for the
Administrative Agent to establish that such Credit Event complies with
the Aggregate Borrowing Base limitations contained herein.
The acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by the Borrower to each of the Lenders that all of
the applicable conditions specified in section 5.1, 5.2 and/or 5.3, as the case
may be, are satisfied as of that time. All of the certificates, legal opinions
and other documents and papers referred to in this section 5, unless otherwise
specified, shall be delivered to the Administrative Agent for the account of
each of the Lenders and, except for the Notes, in sufficient counterparts for
each of the Lenders.
SECTION 6. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lenders to enter into this Agreement and to make
the Loans, and/or to issue and/or to participate in the Letters of Credit
provided for herein, the Borrower and the Management Company, each as to itself,
each makes the following representations and warranties to, and agreements with,
the Lenders, all of which shall survive the execution and delivery of this
Agreement and each Credit Event:
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6.1. ORGANIZATION, EXISTENCE. (a) The Borrower is duly organized,
validly existing and in good standing as a real estate investment trust
organized under Chapter 1747 of the Ohio Revised Code, has full power and
authority and full legal right to own or to hold under lease its Property and to
carry on its businesses and is qualified and self-administered as a REIT under
sections 856 through 860 of the Code. The Management Company is duly organized,
validly existing and in good standing as a corporation under the laws of the
State of Delaware, and has full corporate power and authority and full legal
right to own or hold under lease its Property and to carry on its business. Each
of the Borrower and the Management Company is qualified and licensed, admitted
or approved to do business in each jurisdiction wherein the character of its
Property or the nature of its business make such qualification necessary or
advisable and where the failure so to qualify would have a material and adverse
effect on the Borrower.
(b) Each of the Borrower and the Management Company has the requisite
power and authority, and full legal right, to enter into this Agreement and each
of the other Loan Documents to which it is a party, and to perform, observe and
comply with all of its agreements and obligations hereunder and under each and
all of the Loan Documents to which it is a party.
(c) Except as set forth on Annex II, the Borrower does not, as of the
date hereof, own or hold of record (whether directly or indirectly) more than
one percent (1.0%) of any shares of any class in the capital of any corporation,
nor does the Borrower own or hold (whether directly or indirectly) more than one
percent (1.0%) of any legal and/or beneficial equity interest in any
partnership, business trust or joint venture or in any other unincorporated
trade or business enterprise. The representation and warranty set forth in this
section 6.1(c) is made upon and as of the date hereof, and shall not
(notwithstanding any other provision of this Agreement to the contrary) be
deemed to be repeated on any other date.
(d) The Borrower is duly qualified as a REIT under the Code, and has
not incurred any liability for excise taxes pursuant to section 4981 of the
Code.
6.2. DUE AUTHORIZATION. (a) The execution and delivery by the Borrower
of each of the Loan Documents, the performance by the Borrower of all of its
agreements and obligations under such Loan Documents, and the making by the
Borrower of the borrowings contemplated by this Agreement have been duly
authorized by all appropriate action on the part of the Borrower and do not and
will not (i) contravene any provision of its Declaration of Trust or any other
organizational or constituent document of the Borrower as in effect from time to
time; (ii) conflict with, or result in a breach of the terms, conditions or
provisions of, or constitute a default under, or (except as expressly
contemplated by the terms of this Agreement with respect to the liens and
interests to be created in favor of the Administrative Agent under the Security
Documents) result in the creation of any Lien upon any of the Property of the
Borrower under any agreement, trust deed, indenture, mortgage or other
instrument to which the Borrower is a party or by which the Borrower or any
other Property of the Borrower is bound or affected; (iii) violate or contravene
any provision of any law, rule or regulation (including, without limitation,
Regulations G, T, U or X of the Board of Governors of the Federal Reserve
System) or any order, ruling or interpretation thereunder or any decree, order
or judgment of any court or governmental or regulatory authority, bureau, agency
or official (all as from time to time in effect and applicable to the Borrower);
or (iv) require any waivers, consents or approvals by any of the creditors or
trustees for creditors of the Borrower or any other person.
(b) The execution and delivery by the Management Company of each of the
Loan Documents to which it is a party and the performance by the Management
Company of all of its agreements and obligations under such Loan Documents has
been duly authorized by all corporate action on the part of the Management
Company, and do not and will not (i) contravene the Articles of Incorporation or
any other organizational or constituent document of the Management Company as in
effect from time to time; (ii) conflict with, or result in a breach of the
terms, conditions or provisions of, or constitute a default under, or (except as
contemplated by this Agreement) result in the creation of a Lien upon any
Property of the Management Company under any agreement, trust deed, indenture,
mortgage or other instrument to which the Management Company is a party or by
which its Property is bound or affected; (iii) violate or contravene any
provision of any law, rule or regulation or any order, ruling or interpretation
thereunder or any decree, order or judgment of any court or governmental or
regulatory authority, bureau, agency or official (all from time to time in
effect and applicable to the Management Company); or (iv) require any waivers,
consents or approvals of any other person.
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(c) Except as to matters which the Borrower has procured, obtained or
performed prior to or concurrently with its execution and delivery of this
Agreement, no approval, consent, order, authorization or license by, or giving
notice to, or taking any other action with respect to, any governmental or
regulatory authority or agency is required under any provision of any applicable
law:
(i) for the execution and delivery by the Borrower or the
Management Company, as the case may be, of this Agreement, the Notes,
and the other Loan Documents, for the performance by the Borrower or
the Management Company of any of the agreements and obligations
hereunder or thereunder or for the making by the Borrower of the
borrowings contemplated by this Agreement, or for the conduct by the
Borrower of its business; or
(ii) to ensure the continuing legality, validity, binding
effect, enforceability or admissibility in evidence of this Agreement,
the Notes and the other Loan Documents;
other than the filings and recordings to which reference is made in sections
5.1(g) and (h).
6.3. ENFORCEABILITY OF DOCUMENTS. (a) On or before the Closing Date,
the Borrower and the Management Company will have duly executed and delivered
each of the Loan Documents required of it by this Agreement, and each such Loan
Document will be in full force and effect. Each Loan Document shall constitute
the legal, valid and binding obligation of the Borrower and/or the Management
Company, as the case may be, enforceable against the Borrower or the Management
Company, as the case may be, in accordance with its respective terms.
(b) The representations and warranties made by the Borrower and the
Management Company in this section 6.3 are subject to the following
qualifications: (i) the enforceability of any rights and remedies provided in
any of the Loan Documents or against any particular party thereto is subject to
applicable bankruptcy, reorganization, moratorium or other similar laws
affecting generally the enforcement of creditors' rights; and (ii) the
availability of equitable remedies for the enforcement of any provision of any
of the Loan Documents may be subject to the discretion of the court before which
any proceeding for the enforcement of any provision may be brought.
6.4. NO DEFAULT. (a) No event has occurred and is continuing, and no
condition exists, which constitutes a Default or an Event of Default.
(b) No default by the Borrower or the Management Company and no accrued
right of rescission, cancellation or termination on the part of the Borrower or
the Management Company, exists under this Agreement or any of the other Loan
Documents.
6.5. FINANCIAL STATEMENTS. The Borrower has furnished the Lenders with
true, correct and complete copies of (a) the combined annual financial
statements for the Borrower and the Management Company for the most recent
fiscal year of the Borrower, including the combined balance sheet of the
Borrower and the Management Company as of the end of such fiscal year and
combined statements of income and changes in cash for the Borrower and the
Management Company and a statement of shareholder's equity, prepared on a
consistent basis in accordance with GAAP (except as specifically disclosed
therein) and in the form included with the Borrower's Form 10-K as filed with
the SEC for such fiscal year, certified without qualification by the Borrower's
Accountants; (b) the combined quarterly financial statements for the Borrower
and the Management Company for each fiscal quarter elapsed since the expiration
of the Borrower's most recent fiscal year, including a combined balance sheet
and combined statements of income and change in cash of the Borrower and the
Management Company, prepared on a consistent basis with the prior fiscal year's
financial statements in accordance with GAAP (except as specifically disclosed
therein), and in the form included with the Borrower's Form 10-Q, as filed with
the SEC for any such fiscal quarter; and (c) a certificate of the chief
financial officer, principal accounting officer or chief executive officer of
the Borrower, stating that to his best knowledge after due inquiry the foregoing
statements present fairly in all material respects the combined financial
position of the Borrower and the Management Company and the results of their
combined operations, subject, solely with respect to the materials described in
clause (b), to routine year-end audit adjustments.
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6.6. NO ADVERSE CHANGES. No changes have occurred in the assets,
liabilities or financial condition of the Borrower or the Management Company
from those reflected in the most recent balance sheets referred to in section
6.5 which, individually or in the aggregate, have been materially adverse. Since
the date of such most recent balance sheet, there has been no material and
adverse development in the business or in the operations or prospects of the
Borrower or the Management Company.
6.7. TITLE TO ASSETS. Except as set forth in Annex IV, the Borrower and
its Subsidiaries have good, sufficient and legal title to, or a valid and
subsisting ground leasehold interest in, all the Property and assets reflected
in the most recent balance sheet referred to in section 6.5, except for assets
disposed of since the date of such balance sheet in the ordinary course of
business.
6.8. LITIGATION. Except as disclosed in Annex V, or (with respect to
subsequent reiterations of this warranty and representation) as disclosed in
documents filed with the SEC and provided to the Lenders as required by this
Agreement, there is no pending action, suit, proceeding or investigation
pending, or, to Borrower's knowledge, threatened, before any court, governmental
or regulatory authority, agency, commission or official, board of arbitration or
arbitrator against the Borrower or the Management Company in which Borrower or
the Management Company is a participant which could, if determined adversely to
the Borrower or the Management Company, reasonably be expected to affect, in any
material or adverse way, the financial position, assets, business, operations or
prospects of the Borrower. There are no proceedings pending or, to the
Borrower's knowledge, threatened against the Borrower or the Management Company
which call into question the validity or enforceability of any of the Loan
Documents.
6.9. NO MATERIALLY ADVERSE CONTRACTS. The Borrower is not a party to or
bound by any contracts, agreements or instruments (whether written or oral)
which, either individually or in the aggregate, materially and adversely affect
the financial position, business, operations or prospects of the Borrower.
6.10. TAX RETURNS. The Borrower has filed all federal, state and other
tax returns required to be filed by it and has made reasonable provisions, in
accordance with GAAP, for the payment of all taxes (if any) which have or may
become due and payable pursuant to any of the said returns, pursuant to any
matters raised by audits or for other reasons. In addition, the Borrower has
paid or caused to be paid all real and personal property taxes and assessments
and other governmental charges lawfully levied or imposed on or against it or
its Property, other than those presently payable without payment of interest or
penalty and those which are subject to contests initiated by the Borrower in
good faith and diligently prosecuted, in each case as permitted by and subject
to the requirements of, section 7.10 below.
6.11. CONTRACTS WITH AFFILIATES OR SUBSIDIARIES. (a) Except as
permitted by section 8.6 hereof and as otherwise set forth on Annex VII hereto,
the Borrower is not a party to or otherwise bound by any material agreements,
instruments or contracts (whether written or oral) with any Affiliate or
Subsidiary.
(b) Except as permitted by section 8.6 below, and as otherwise set
forth on Annex VIII hereto, there is no Indebtedness for Borrowed Money owing by
the Borrower to any Affiliate nor is there Indebtedness for Borrowed Money owing
by any Affiliate to the Borrower.
(c) The Management Company has furnished the Lenders with true, correct
and complete copies of the Canco Credit Agreement and the Canco Put Agreement as
in effect on the date hereof.
6.12. EMPLOYEE BENEFIT PLANS. Except as shown on Annex VI hereto, the
Borrower does not maintain any Employee Benefit Plans or Guaranteed Pension
Plans.
6.13. GOVERNMENTAL REGULATION. The Borrower is not a "public utility
company", a "holding company" or a "subsidiary" or an "affiliate" of a "holding
company," as such terms are defined in the federal Public Utility Holding
Company Act of 1935, as amended. The Borrower is not an "investment company" or
a company "controlled" by an "investment company," as such terms are defined in
the federal Investment Company Act of 1940, as amended. The Borrower is not
subject to regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act, the Interstate Commerce Act or the Investment Company Act of
1940 or under any federal or state statute or regulation limiting its ability to
incur Indebtedness for Borrowed Money.
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6.14. MARGIN STOCK; USE OF PROCEEDS. The Borrower is not engaged in the
business of extending credit for the purpose of purchasing or carrying any
Margin Stock. At no time would more than 25% of the value of the assets of the
Borrower or of the Borrower and its combined Subsidiaries that are subject to
any "arrangement" (as such term is used in section 221.2(g) of such Regulation
U) hereunder be represented by Margin Stock. The proceeds of all Loans shall be
utilized (i) to finance acquisitions and investments, (ii) to retire the
Indebtedness referred to in section 5.1(l) of the Original Credit Agreement, and
(iii) for general corporate purposes, in each case in a manner not inconsistent
with the requirements of this Agreement.
6.15. DISCLOSURE. Neither this Agreement nor any other Loan Document,
or any other document, certificate or written statement furnished to the Lenders
by or on behalf of the Borrower for use in connection with the transactions
contemplated by this Agreement contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make the statements
contained therein not misleading as of the date of such document, certificate or
other statement.
6.16. NO MATERIAL DEFAULT. The Borrower is not in default under any
order, writ, judgment, injunction, decree, statute or governmental rule,
indenture, agreement, contract, lease or other instrument or contract applicable
to it, which default would have a material and adverse effect on the business,
assets, Properties or conditions, financial or otherwise, of the Borrower or in
the performance of any covenants or conditions respecting any of its
Indebtedness, and no holder of any Indebtedness of the Borrower has given notice
of any asserted default thereunder, and no liquidation or dissolution of
Borrower and no receivership, insolvency, bankruptcy, reorganization or other
similar proceedings relative to the Borrower or its Property is pending or
threatened.
6.17. ENVIRONMENTAL CONDITIONS. (a) The Borrower has obtained all
necessary permits, licenses, variances, satisfactory clearances and all other
necessary approvals (collectively the "EPA PERMITS") in respect of its Property
and for the operation and conduct of the Borrower's business, from all
applicable federal, state, and local Governmental Authorities, utility companies
or development-related entities including, but not limited to, any and all
appropriate Federal or State environmental protection agencies and other
departments, public water works and public utilities in regard to the use of all
such real property and the operation and conduct of its business, and for any
handling, transporting, treating, storage, disposal, discharge, or Release (as
defined in CERCLA) of Hazardous Substances or any wastes, liquids or other
emissions, if any, into, on or from the environment (including, but not limited
to, any air, water, or soil). All EPA Permits are in full force and effect; no
such EPA Permit has expired or been suspended, denied or revoked, or is under
challenge by any person. The Borrower is in compliance with each EPA Permit, and
has no knowledge or information concerning any condition or fact which might or
could cause a suspension, denial or revocation of any of the Borrower's EPA
Permits.
(b) Neither the Borrower, the Mortgaged Property, nor any other
Property owned by or leased to the Borrower is (i) subject to any material
private or governmental litigation, Lien or judicial or administrative notice,
order or action, or, to the Borrower's knowledge, threatened litigation or
administration action, relating to Hazardous Substances or environmental
problems, impairments or liabilities; or (ii) with any applicable notice or
lapse of time (or both), and/or failure to take certain curative or remedial
actions, in direct or indirect violation of any Environmental Laws.
(c) To the best of the Borrower's knowledge, there has been no Release
(as defined in CERCLA) into, on or from any Mortgaged Property or any other
Property owned by or leased to the Borrower, and no Hazardous Substances (except
for (x) "Household Waste" as that term is defined at 40 C.F.R. 261.4(b)(l)
(1990), and (y) DE MINIMIS amounts of Hazardous Substances which neither violate
any Environmental Laws nor require any affirmative remediation or corrective
action) are located on or have been treated, stored, processed, disposed of,
handled, transported to or from, disposed of upon or into, upon or from any such
Property including, but not limited to, any air, water, or soil. The Borrower
shall not allow any Hazardous Substance to exist or be treated, stored,
disposed, Released, located, discharged, possessed, managed, processed, or
otherwise handled on any Mortgaged Property or any other Property owned by or
leased to the Borrower except in compliance with all applicable requirements of
all or in the operation or conduct of its business Environmental Laws, and shall
comply with all Environmental Laws affecting all of the Borrower's Property.
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(d) The Borrower and its Affiliates do not and shall not transport or
engage in the business of transporting, in any manner, any Hazardous Substances.
(e) The Borrower is not aware of any circumstances which would result
in any material obligation under any Environmental Law to investigate or
remediate any Hazardous Substances in, on or under the Mortgaged Properties or
in, on or under any other Property owned by or leased to the Borrower.
(f) Reference is hereby made to the Environmental Indemnity Agreement,
dated of even date herewith, executed and delivered by the Borrower to the
Administrative Agent as one of the Loan Documents. The parties acknowledge and
agree that it is their intention that this section 6.17 and the Environmental
Indemnity Agreement be interpreted as being consistent and harmonious.
Nevertheless, the parties further agree that, solely with respect to matters
which are covered both by this section 6.17 and by the Environmental Indemnity
Agreement, the latter shall govern in the event of any inconsistency.
6.18. LICENSES AND PERMITS. The Borrower owns or possesses all material
Licenses and Permits and rights with respect thereto necessary for the lawful
and proper conduct of its business as presently conducted and proposed to be
conducted, without any known conflict with the rights of others, free of any
Lien not permitted by this Agreement. All such Licenses and Permits are in full
force and effect, and the Borrower is in compliance with the requirements
imposed by, or in respect of, all such Licenses and Permits without any known
conflict with the valid rights of others which could affect or impair in any
material manner the business, assets or condition, financial or otherwise, of
the Borrower or the Collateral. No event has occurred and is continuing which
permits, or after notice or lapse of time or both would permit, the revocation
or termination of any such License or Permit, or would adversely affect the
rights of the Borrower thereunder. There is no litigation or other proceeding or
dispute with respect to any such Licenses and Permits which has, or is
reasonably likely to have, any material adverse effect on the validity or
continued availability of any such Licenses and Permits.
SECTION 7. AFFIRMATIVE COVENANTS.
The Borrower and the Management Company each hereby covenants and
agrees that so long as this Agreement is in effect and until such time as the
Total Commitment has been terminated, no Notes are outstanding and the Loans,
together with interest, Fees and all other Obligations hereunder, have been paid
in full, it shall comply with, observe, perform or fulfill all of the covenants
set forth below in this section 7 which are to be performed by the Borrower or
the Management Company, as the case may be, as follows:
7.1. REPORTS AND OTHER INFORMATION. (a) The Borrower shall provide to
the Lenders, as soon as the same are available, and in any event within 45 days
after the close of each of the first three quarters of each fiscal year of the
Borrower, a combined balance sheet of the Borrower and the Management Company
and any Subsidiaries of the Borrower as of the end of such quarter, together
with combined statements of income, changes in cash and shareholders' equity for
the Borrower and the Management Company and such Subsidiaries for the period
commencing at the end of the previous fiscal year and ending with the end of
such quarter. All such statements shall be prepared on a consistent basis with
the prior year's statements, in accordance with GAAP (except as may be expressly
disclosed therein) in the form included in the Borrower's Form 10-Q as filed
with the SEC, shall be certified by the Borrower's chief financial officer,
principal accounting officer or chief executive officer, and shall be
accompanied by a certificate of such officer stating that as of the date of such
certificate and to the best of his knowledge, after reasonable inquiry: (i) such
financial statements present fairly, in all material respects, the combined
financial position of the Borrower and the Management Company and the results of
their combined operations for such quarter and for the Borrower's fiscal
year-to-date in accordance with GAAP, subject to routine year-end audit
adjustments; and (ii) no event has occurred which constitutes an Event of
Default or would constitute an Event of Default with the giving of notice or the
lapse of time or both, or, if an Event of Default or such an event has occurred
and is continuing, a statement as to the nature thereof and the action which the
Borrower has taken or proposes to take with respect thereto. Concurrently with
the delivery of the foregoing materials, the Borrower shall furnish, in such
detail as is reasonably required by the Administrative Agent (x) a Compliance
Certificate, documenting the Borrower's compliance with the requirements of
sections 7.16 and section 8
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of this Agreement, (y) a borrowing report, certified by an Authorized Officer of
the Borrower, and (z) such other information as may reasonably be requested by
the Administrative Agent with respect to the Borrower or the Borrower's business
or Property.
(b) The Borrower shall provide to the Lenders, as soon as the same are
available and in any event within 90 days after the end of each fiscal year of
the Borrower, a copy of the combined annual financial statements of the Borrower
and the Management Company and any Subsidiaries of the Borrower for such year,
including therein a copy of the combined balance sheet of the Borrower and the
Management Company and any such Subsidiaries as of the end of such fiscal year
and combined statements of income and changes in cash and statements of
shareholders' equity. All of the foregoing shall be prepared on a consistent
basis with the prior year's statements, in accordance with GAAP (except as may
be expressly disclosed therein) in the form included in the Borrower's Form 10-K
as filed with the SEC. The foregoing statements shall be certified without
qualification by Borrower's Accountants, and shall be accompanied by a
certificate of the chief financial officer, principal accounting officer or
chief executive officer of the Borrower stating that, as of the date of such
certificate, to the best of his knowledge, after reasonable inquiry: (i) such
financial statements reflect all adjustments (consisting of normal, recurring
accruals) necessary to present fairly the combined financial position of the
Borrower and the Management Company for such fiscal year in accordance with
GAAP, and (ii) no event has occurred which constitutes an Event of Default or
would constitute an Event of Default with the giving of notice or the lapse of
time or both, or, if an Event of Default or such an event has occurred and is
continuing, a statement as to the nature thereof and the action which the
Borrower has taken or proposes to take with respect thereto. Concurrently with
the delivery of the foregoing materials, the Borrower shall furnish, in such
detail as is reasonably required by the Administrative Agent (x) a Compliance
Certificate, (y) a borrowing report, certified by an Authorized Officer of the
Borrower, and (z) such other information as may be reasonably requested by the
Administrative Agent with respect to the Borrower or the Borrower's business or
Property.
(c) The Borrower shall provide to the Lenders, promptly after sending
or filing thereof, copies of all reports which the Borrower sends to holders of
beneficial interests in the Borrower, and copies of all reports and registration
statements which the Borrower files with the SEC.
(d) The Borrower shall provide to the Lenders, concurrently with its
delivery to the Lenders of the Borrower's quarterly financial reports in
accordance with section 7.1(a), above, and in any event within 45 days after the
end of each calendar quarter of the Borrower, a report as to each Mortgaged
Property setting forth for such Mortgaged Property a statement showing, in such
detail as the Administrative Agent may reasonably request, the Property NOI for
such Mortgaged Property for such quarter.
(e) The Borrower shall provide the Lenders, semi-annually, within 45
days after the end of the second and fourth fiscal quarters of the Borrower in
each fiscal year during the pendency of this Agreement, a current rentroll for
each Mortgaged Property.
(f) Promptly after the preparation thereof, and in any event not later
than 90 days after the commencement of any fiscal year of the Borrower, the
Borrower shall deliver to the Administrative Agent and the Lenders a combined
budget of the Borrower, the Management Company and their respective
Subsidiaries, in reasonable detail for the four fiscal quarters of such fiscal
year, and (if and to the extent prepared by management of the Borrower or the
Management Company) for any subsequent fiscal years, as customarily prepared by
management for its internal use, setting forth, with appropriate discussion or
identification, the forecasted combined balance sheet, income statement, funds
from operations and capital expenditures of the Borrower, the Management
Company and their respective Subsidiaries for the period covered thereby, and
the principal assumptions upon which such budget and forecasts are based.
(g) The Borrower shall furnish to the Administrative Agent and the
Lenders, promptly following receipt thereof, a copy of each letter or memorandum
which comments on internal accounting controls or which questions any accounting
policies followed by the Borrower, the Management Company or any of their
respective Subsidiaries, which is submitted to the Borrower or the Management
Company by its Accountants in connection with any annual or interim audit of the
books of the Borrower, the Management Company and/or their respective
Subsidiaries.
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(h) The Borrower shall also provide the Lenders with such other
information relating to the Borrower (including, without limitation, any
business plan of the Borrower) as any Lender may from time to time reasonably
request.
7.2. MAINTENANCE OF PROPERTY; INSURANCE. (a) The Borrower covenants and
agrees to keep and maintain all of its Property in good repair, working order
and condition, reasonable wear and tear excepted, and from time to time to make,
or use all reasonable legal remedies to cause to be made, all proper repairs,
renewals or replacements, betterments and improvements thereto so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times.
(b) The Borrower covenants and agrees to keep all of its Property
insured against loss or damage by theft, fire, smoke, sprinklers, riot and
explosion, such insurance (the "INSURANCE") to be in such form, in such amounts
and against such other risks and hazards as are currently carried by the
Borrower or are customarily maintained by other persons operating similar
businesses and having similar properties in the same general areas, including
but not limited to liability coverage and to flood insurance for real property
or real property interests located in an area designated as flood-prone, with an
insurer or insurers which are financially sound and reputable and which have
been accorded a rating by A.M. Best Company, Inc. (or any successor rating
agency) of A-/X (or any replacement rating of equivalent stature) or better (or
A-/VII or better in the case of insurers whose parent companies are rated A-/X
or better); insurance companies satisfying the foregoing requirements are
referred to herein as "QUALIFIED INSURERS". In the event that an insurer ceases
to be a Qualified Insurer during the term of any Insurance policy, the Borrower
shall replace such coverage, at the end of the then current policy term, by a
policy issued by a Qualified Insurer. The specific requirements for the
insurance to be maintained in respect of the Mortgaged Properties shall be set
forth in the respective Mortgages; to the extent that the requirements set forth
in the respective Mortgages shall conflict with those which are contained in
this Agreement, the requirements of the respective Mortgages shall govern. The
Borrower shall, in addition, require that the insurer with respect to each such
Insurance policy provide for at least 30 days' advance written notice to the
Administrative Agent of any cancellation or termination of, or other change of
any nature whatsoever in, the coverage provided under any such policy, PROVIDED,
that if the Borrower's insurers will not provide more than 10 days' prior notice
of cancellation for nonpayment of premiums, such notice will be adequate in such
event.
7.3. PRIORITY OF MORTGAGES. The Borrower shall at all times maintain
and preserve the first and best priority of the Mortgages with respect to each
of the Mortgaged Properties, and shall not at any time create or suffer to be
created any other Lien or security interest in any of the Collateral, excepting
only Liens securing the payment of current and non-delinquent taxes and
assessments, both general and special, the effect of building, land use and
zoning laws, Permitted Encumbrances and other matters affecting title to the
Mortgaged Properties or any of the other Collateral as may be approved or
accepted by the Administrative Agent.
7.4. SECURITY INTERESTS. The Borrower will defend the Collateral
against all claims and demands of all persons at any time claiming the same or
any interest therein. The Borrower shall comply with the requirements of all
applicable laws and regulations in order to grant to the Administrative Agent
valid and perfected first mortgage liens encumbering all of the Mortgaged
Properties and first priority, perfected security interests in the balance of
the Collateral. The Administrative Agent is hereby authorized by the Borrower
(and the Management Company, as appropriate) to file any financing statements
covering the Collateral, whether or not the Borrower's (or the Management
Company's) signature appears thereon. The Borrower and the Management Company
each agrees to do whatever the Administrative Agent may reasonably request, from
time to time, by way of: (i) filing notices of liens, financing statements,
fixture filings and amendments, renewals and continuations thereof; (ii)
cooperating with the Administrative Agent's representatives; (iii) keeping stock
records; (iv) obtaining waivers from landlords and mortgagees and from
warehousemen and their landlords and mortgagees; (v) paying claims which might,
if unpaid, become a Lien on the Collateral or any portion or component thereof;
and (vi) performing such further acts as the Administrative Agent may reasonably
require in order to effect the purposes of this Agreement and the other Loan
Documents (excluding, however, any such matters as to which the Borrower or the
Management Company shall have caused to be bonded or otherwise discharged, or
shall have properly initiated and duly prosecuted a dispute with the claimant or
the party seeking to compel the Borrower's or the Management Company's
performance, all subject to and in compliance with the provisions of the
applicable Mortgage relative to the prosecution of the contests and disputes
permitted thereunder). Any and all fees, costs and expenses (including any
taxes, reasonable attorneys' fees, or costs for insurance of any kind), which
the
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Administrative Agent may incur with respect to the Collateral or the
Obligations; in filing public notices; in preparing or filing documents; making
title examinations or rendering opinions; in protecting, maintaining, or
preserving the Collateral or its interest therein; in enforcing or foreclosing
the Liens under any of the Loan Documents, whether through judicial procedures
or otherwise; or in defending or prosecuting any actions or proceedings arising
out of or relating to its transactions with the Borrower and/or the Management
Company under this Agreement or any other Loan Document, shall be borne and paid
by the Borrower promptly after the Administrative Agent's written demand
therefor. If any such costs or expenses are not promptly paid by the Borrower,
the Administrative Agent may pay the same on the Borrower's behalf, and the
amount so paid shall thereupon comprise Obligations hereunder, evidenced by the
Notes and secured by the other Loan Documents, and shall bear interest from the
date of such payment until the date the same are paid in full, at the interest
rate provided in section 1.8(c).
7.5. MAINTENANCE OF EXISTENCE. (a) The Borrower shall make all filings
under the Code necessary to preserve and maintain (i) its qualifications as a
REIT under the Code and (ii) the applicability to the Borrower and its
shareholders of the method of taxation provided for in section 857(b) of the
Code (and any successor provision thereto).
(b) The Borrower shall preserve and maintain its existence and all of
its rights, franchises and privileges as an Ohio real estate investment trust,
and its qualification to do business in each jurisdiction in which the character
of the Borrower's Property or the nature of the Borrower's business makes such
qualification necessary.
(c) The Management Company will preserve and maintain its existence and
all of its rights, franchises and privileges as a Delaware corporation, and its
qualification to do business in any other jurisdiction in which the character of
its Property or the nature of its business makes such qualification necessary.
7.6. COMPLIANCE WITH LAWS. (a) The Borrower and the Management Company
shall, and each hereby covenants and agrees to, comply with all acts, rules,
regulations, orders, directions and ordinances of any legislative,
administrative or judicial body or official (including, without limitation, all
Environmental Laws and the Americans with Disabilities Act (the "ADA"))
applicable to the Borrower's Property or any part thereof, or to the operation
of the Borrower's business.
(b) The Borrower will promptly notify the Lenders in the event that the
Borrower receives any notice, claim or demand from any governmental agency which
alleges that the Borrower or the Management Company is in violation of any of
the terms of, or has failed to comply with any applicable order issued pursuant
to any Federal, state or local statute regulating its operation and business
with respect to any Mortgaged Property, including, but not limited to, the
Occupational Safety and Health Act, the ADA and all Environmental Laws.
7.7. NOTICE OF LITIGATION; JUDGMENTS. The Borrower shall furnish or
cause to be furnished to the Lenders, promptly (and, in any event, within five
Business Days) after the Borrower shall have first become aware of the same, a
written notice describing, in detail acceptable to the Required Lenders: (a) any
final judgment in an amount exceeding $500,000 rendered against the Borrower or
any Affiliate of the Borrower; (b) the commencement or institution of any legal
or administrative action, suit, proceeding or investigation by or against the
Borrower or any Affiliate of the Borrower in or before any court, governmental
or regulatory body, agency, commission or official, board of arbitration or
arbitrator, the outcome of which could materially and adversely affect the
Borrower's current or future financial position, assets, business, operations or
prospects, or could prevent or impede the implementation or completion,
observance or performance of any of the arrangements or transactions
contemplated by any of the Loan Documents; or (c) the occurrence of any adverse
development, not previously disclosed by the Borrower to the Lenders in writing,
in any such action, suit, proceeding or investigation. In addition, as promptly
as possible after sending the notice of any such event or events, the Borrower
shall provide the Lenders with a supplemental notice relating to the event
described in such initial notice. Such supplemental notice shall include the
Borrower's description of the action that the Borrower has taken or proposed to
take with respect to such event.
7.8. NOTICE OF OTHER EVENTS. (a) If (and on each occasion that) any
event shall occur or any condition shall develop which constitutes a Default or
an Event of Default, then, promptly (and, in any event, within five Business
Days) after the Borrower shall have first become aware of the same, the Borrower
will furnish or cause to be furnished to the Lenders a written notice specifying
the nature and the date of the occurrence of such event or (as the case may
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be), the nature and the period of existence of such condition and what action
the Borrower is taking or proposes to take with respect thereto.
(b) Immediately upon the Borrower's or the Management Company's first
becoming aware of any of the following occurrences, the Borrower or the
Management Company, as applicable, will furnish or cause to be furnished to the
Lenders written notice with full particulars of (i) the business failure,
insolvency or bankruptcy of the Borrower or the Management Company; and (ii) any
defaults or events of default under any material agreement of the Borrower or
the Management Company or any material violations of any laws, regulations,
rules or ordinances of any governmental or regulatory body by the Borrower or
the Management Company with respect to any Mortgaged Property.
(c) If (and on each occasion that) any of the following events shall
occur:
(i) the Declaration of Trust or other organizational documents
of the Borrower shall at any time be modified or amended in any respect
whatever; or
(ii) the by-laws or code of regulations of the Borrower shall
at any time be modified or amended in any respect whatever;
then promptly (and, in any event, within five Business Days) after the
occurrence of any such event, the Borrower shall furnish the Lenders with a true
and complete copy of each such modification, amendment or supplement.
(d) Immediately upon (i) the Borrower's first becoming aware of the
occurrence of a Collateralization Event (as defined in the Canco Put Agreement),
and (ii) the Borrower's receipt of a Collateralization Notice (as defined in the
Canco Put Agreement), the Borrower will notify the Administrative Agent thereof
in writing (providing copies of any correspondence relating thereto), and the
Administrative Agent, in turn, will promptly furnish a copy of the Borrower's
notice to the Lenders.
7.9. INSPECTIONS. The Borrower and the Management Company shall permit
any officer, employee, consultant or other representative or agent of the
Administrative Agent or any Lender to visit and inspect, from time to time and
at any reasonable time, after prior notice to the Borrower, any of the assets or
Property owned or held under lease by the Borrower or the Management Company and
to examine the books of account, records, reports and the papers (and to make
copies thereof and to take extracts therefrom) of the Borrower and the
Management Company and to discuss the affairs, finances and accounts of the
Borrower with the trustees and executive officers of the Borrower and the
executive officers of the Management Company, and with the Borrower's
independent accountants.
7.10. PAYMENT OF TAXES AND OTHER CLAIMS. The Borrower and the
Management Company shall pay and discharge promptly all taxes, assessments and
other governmental charges or levies at any time imposed upon it or upon its
income, revenues or Property, as well as all claims of any kind (including
claims for labor, material or supplies) which, if unpaid, might by law become a
Lien or charge upon all or any part of its income, revenues or Property.
Notwithstanding the foregoing to the contrary, the Borrower or the Management
Company may, PROVIDED that there is not then an Event of Default hereunder,
contest the propriety or amount of any such taxes, assessments or governmental
charges, or of any such claims, if (a) such contest is instituted in good faith
and prosecuted with reasonable diligence; (b) such contest shall preclude the
sale or forfeiture of the affected Property (or the Borrower or the Management
Company shall discharge, by bonding or otherwise, the claim giving rise to the
contest or shall provide the Administrative Agent with such reasonable security
or other assurances as may be requested by the Administrative Agent in
connection with such contest); and (c) the Borrower shall indemnify the
Administrative Agent and the Lenders of and from any and all liability, loss,
cost or expense incurred by or asserted against the Administrative Agent or any
of the Lenders in connection with, or in consequence of, any such contest.
7.11. PAYMENT OF INDEBTEDNESS. The Borrower will duly and punctually
pay or cause to be paid the principal and interest on the Loans, all draws and
disbursements under the Letters of Credit and all fees and other amounts payable
hereunder or under the Loan Documents promptly as and when required by this
Agreement and/or the
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other Loan Documents. The Borrower shall pay all other Indebtedness (whether
existing on the date hereof or arising at any time thereafter) promptly as and
when the same is due and payable.
7.12. PERFORMANCE OF OBLIGATIONS UNDER THE LOAN DOCUMENTS. The Borrower
and the Management Company each will duly and properly perform, observe and
comply with all of its agreements, covenants and obligations under this
Agreement and each of the other Loan Documents.
7.13. GOVERNMENTAL CONSENTS AND APPROVALS. (a) The Borrower or the
Management Company, as the case may be, will obtain or cause to be obtained all
such approvals, consents, orders, authorizations and licenses from, give all
such notices promptly to, register, enroll or file all such agreements,
instruments or documents promptly with, and promptly take all such other action
with respect to, any governmental or regulatory authority, agency or official,
or any central bank or other fiscal or monetary authority, agency or official,
as may be required from time to time under any provision of any applicable law:
(i) for the performance by the Borrower or the Management
Company of any of its agreements or obligations under the Notes, this
Agreement or any of the other Loan Documents or for the payment by the
Borrower to the Administrative Agent or any Lender or Letter of Credit
Issuer of any sums which shall become due and payable by the Borrower
hereunder or thereunder;
(ii) to ensure the continuing legality, validity, binding
effect or enforceability of the Notes or any of the other Loan
Documents or of any of the agreements or obligations thereunder of the
Borrower or the Management Company; or
(iii) to continue the proper operation of the business and
operations of the Borrower or the Management Company, as the case may
be.
(b) The Borrower or the Management Company, as the case may be, shall
duly perform and comply with the terms and conditions of all such approvals,
consents, orders, authorizations and Licenses and Permits from time to time
granted to or made upon the Borrower or the Management Company, as the case may
be.
7.14. EMPLOYEE BENEFIT PLANS AND GUARANTEED PENSION PLANS. The Borrower
(a) will not establish any Guaranteed Pension Plans or Employee Benefit Plans
without the prior written consent of the Required Lenders (which will not be
unreasonably withheld or delayed), (b) will make full payment when due of all
amounts which, under the provisions of Employee Benefit Plans or under
applicable law, are required to be paid as contributions thereto, (c) will not
permit to exist any accumulated funding deficiency, whether or not waived, (d)
will file on a timely basis all reports, notices and other filings required by
any governmental agency with respect to any of its Employee Benefit Plans, (e)
will make any payments to Multiemployer Plans required to be made under any
agreement relating to such Multiemployer Plans, or under any law pertaining
thereto, (f) will not permit any amount of unfunded guarantied benefits to occur
with respect to any Guaranteed Pension Plan, (g) will furnish to all
participants, beneficiaries and employees under any of the Employee Benefit
Plans, within the periods prescribed by law, all reports, notices and other
information to which they are entitled under applicable law, and (h) will take
no action which would cause any of the Employee Benefit Plans to fail to meet
any qualification requirement imposed by the Code, as amended. As used in this
section, the term "ACCUMULATED FUNDING DEFICIENCY" has the meaning specified in
section 302 of ERISA and section 412 of the Code, and the term "UNFUNDED
GUARANTIED BENEFITS" has the meaning specified in section 4001 of ERISA.
7.15. FURTHER ASSURANCES. The Borrower and the Management Company, as
the case may be, will each execute, acknowledge and deliver, or cause to be
executed, acknowledged and delivered, any and all such further assurances and
other agreements or instruments, and take or cause to be taken all such other
action, as shall be reasonably requested by the Administrative Agent from time
to time in order to give full effect to any of the Loan Documents.
7.16. FINANCIAL COVENANTS. The Borrower will at all times comply with
the following financial covenants:
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(a) LEVERAGE RATIO. The Borrower shall at all times maintain a
ratio, on a combined basis for the Borrower, the Management Company and
their Subsidiaries, determined as of the most recently ended fiscal
quarter of the Borrower, of (i) Total Liabilities TO (ii) EBITDA for
the four consecutive fiscal quarters of the Borrower ended with such
fiscal quarter, of not more than 7.50 to 1.00.
(b) DEBT SERVICE COVERAGE RATIO. The Borrower shall at all
times maintain a ratio, on a combined basis for the Borrower, the
Management Company and their Subsidiaries, determined as of the most
recently ended fiscal quarter of the Borrower, of (i) EBITDA for the
four consecutive fiscal quarters ended with such fiscal quarter TO (ii)
the aggregate amount of all regularly scheduled payments of principal
(other than balloon payments) and interest on Indebtedness for Borrowed
Money for such four consecutive fiscal quarter period, of not less than
1.50 to 1.00 for any period ending on or after September 30, 1997.
(c) INTEREST COVERAGE RATIO. The Borrower shall at all times
maintain a ratio, on a combined basis for the Borrower, the Management
Company and their Subsidiaries, determined as of the most recently
ended fiscal quarter of the Borrower, of (i) EBITDA for the four
consecutive fiscal quarters ended with such fiscal quarter TO (ii) the
aggregate amount of all interest for such period on Indebtedness for
Borrowed Money, of not less than 1.60 to 1.00 for any period ending on
or after September 30, 1997.
(d) ADJUSTED NET WORTH. The Borrower shall at all times
maintain an Adjusted Net Worth of at least $168,000,000; PROVIDED that
the foregoing amount (as it may be increased from time to time as
provided herein) shall be increased by (i) an amount equal to 100% of
the net cash proceeds (i.e., net of underwriting discounts and
commissions, placement and advisory fees, and other customary fees,
costs and expenses associated therewith) from the sale or issuance by
the Borrower, the Management Company or any of their Subsidiaries of
its equity securities to any person other than an Affiliate in an
underwritten public offering or private placement with investors which
is completed after June 30, 1997 (specifically excluding from this
clause (i) any sale or issuance to management or employees pursuant to
a stock option plan, stock savings plan or similar employee benefit
arrangement); (ii) an amount equal to 100% of the increase in
shareholders' equity attributable to other issuances of equity by the
Borrower, any of its Subsidiaries or the Management Company
(specifically excluding from this clause (ii) any sale or issuance to
management or employees pursuant to a stock option plan, stock savings
plan or similar employee benefit arrangement); and (iii) all capital
gains recognized by the Borrower, its Subsidiaries and the Management
Company, on a combined basis, for financial reporting purposes,
subsequent to June 30, 1997, on any transaction involving the sale or
other disposition of assets or investments (other than dispositions of
obsolete or surplus equipment, made in the ordinary course of
business), net of any capital losses on any items comprising a portion
of any such transaction, except to the extent such capital gains are
distributed by the Borrower to the holders of shares of beneficial
interest in the Borrower.
(e) FUNDS FROM OPERATIONS. The Borrower shall at all times
maintain its Funds from Operations, determined as of the most recently
ended fiscal quarter of the Borrower, of not less than (i) $15,000,000
for any four consecutive fiscal quarter period ending on or prior to
September 30, 1997, and (ii) $19,000,000 as determined for a full
fiscal year (or as determined on an annualized basis in the case of the
first, second and third fiscal quarter of any fiscal year based on the
portion of the current fiscal year elapsed to date), in the case of any
fiscal quarter period ending thereafter.
(f) MINIMUM AGGREGATE BORROWING BASE. The Borrower shall at
all times maintain an Aggregate Borrowing Base not less than the sum of
the aggregate outstanding principal amount of Loans, PLUS the Letter of
Credit Outstandings, PLUS the Aggregate Measured Swap Credit Risk (if
any) of all Designated Hedge Agreements.
(g) TOTAL COMMITMENT TO APPRAISED LOAN VALUE RATIO. The
Borrower shall at all times maintain a ratio of (i) the Total
Commitment, PLUS the Aggregate Measured Swap Credit Risk (if any) of
all Designated Hedge Agreements, TO (ii) the Appraised Loan Value of
the Eligible Real Estate, expressed as a percentage, of not more than
60%. As used herein, the term "APPRAISED LOAN VALUE OF THE ELIGIBLE
REAL ESTATE" means the sum of (A) the fair market value of the Eligible
Real Estate constituting a part of the
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Mortgaged Property hereunder on the Closing Date which remains part of
the Mortgaged Property hereunder, as determined on the basis of the
appraisals referred to in section 5.1(t), and (B) the Appraised Value
of any Additional Property or Substitute Property, determined for any
such Property as of the date such Property becomes a Mortgaged Property
hereunder in compliance with section 7.17.
Notwithstanding anything to the contrary contained in this Agreement, for the
purpose of determining compliance with the foregoing financial covenants, the
appropriate financial items for each person and business, and their
Subsidiaries, acquired by the Borrower pursuant to the Marathon Transaction
shall be included (without duplication) in such computation for any applicable
period prior to the completion by the Borrower of the Marathon Transaction.
7.17. ADDITIONAL MORTGAGED PROPERTIES; SUBSTITUTE MORTGAGED PROPERTIES.
Subject to the terms and conditions set forth in this section 7.17, the Borrower
may, from time to time, supplement the collateral for the Loans by causing
certain real property owned by the Borrower to become additional Mortgaged
Properties, in accordance with the following provisions:
(a) If the Borrower shall desire to cause certain real
property owned by the Borrower to become a Mortgaged Property
hereunder, the Borrower shall so notify the Administrative Agent and
the Lenders. Such notice shall include: (i) a description of the
property which the Borrower would propose to become a Mortgaged
Property (the "ADDITIONAL PROPERTY"), including historical operating
results and occupancy levels of such Additional Property; (ii) an
appraisal establishing the fair market value of such Additional
Property, prepared by an appraiser who is a Member of the American
Institute of Real Estate Appraisers (or has a corresponding
professional designation acceptable to the Administrative Agent),
conforming to all requirements applicable to the Lenders with respect
to real estate collateral, and otherwise acceptable to the
Administrative Agent and the Required 80% Lenders; (iii) a commitment
for the issuance of a loan policy of title insurance (ALTA Form B, 1970
Form), issued by a title insurer acceptable to the Administrative Agent
and showing that (A) such Additional Property is owned by the Borrower
(or will be, prior to the execution and delivery of the Mortgage
encumbering such Additional Property), and (B) that, if such Additional
Property were to become a Mortgaged Property, the Mortgage encumbering
such Additional Property would be the first and best lien upon such
property, subject only to Permitted Encumbrances and the Lien of taxes
and assessments, both general and special, which are a Lien but are not
then delinquent or due and payable; (iv) a survey, prepared and
certified to the Administrative Agent (and the title company providing
the loan policy referred to below) in accordance with ALTA/ACSM
standards, showing the boundaries of the Additional Property, the
location of all improvements, required set-backs and such other
information as may be required pursuant to the foregoing standards,
acceptable to the Administrative Agent and sufficient to permit the
issuance of a loan policy of title insurance without exception for any
matter which would be revealed by a survey and physical inspection of
the Additional Property; (v) a Phase I environmental report, addressed
to the Administrative Agent and the Lenders (or accompanied by a letter
of reliance for their benefit) and acceptable to the Administrative
Agent and the Required 80% Lenders, showing that such Additional
Property is free of Hazardous Substances and from violations of
Environmental Laws, and otherwise in compliance with the requirements
set forth in this Agreement with respect to the Mortgaged Properties
and (vi) a statement, showing in detail and with substantiating
information reasonably acceptable to the Required 80% Lenders, the
Property NOI for the Additional Property for not less than one full
calendar year prior to the date of the notice with which such
information is furnished.
If the Administrative Agent and the Required 80% Lenders shall
approve the addition of the Additional Property as a Mortgaged
Property, the Administrative Agent shall so notify the Borrower, shall
assign a Coverage Factor and an initial Market Constant to such
Additional Property and shall, on the basis of the same, determine the
Borrowing Base for such property. If the Administrative Agent does not
so notify the Borrower that the addition of the Additional Property as
a Mortgaged Property has been so approved, such Additional Property
shall not become a Mortgaged Property.
Promptly after its receipt of such notice, the Borrower will
execute a Mortgage and such other Security Documents with respect to
such Additional Property as the Administrative Agent may require in
order to cause such Additional Property to comply with the requirements
of this Agreement and the other Loan
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Documents as Collateral for the Obligations, shall cause all such
Security Documents to be duly delivered to the Administrative Agent and
recorded in the appropriate public records, and will cause the title
company which issued the title commitment described above to issue a
loan policy of title insurance to the Administrative Agent, containing
such coverages and endorsements as the Administrative Agent may
require. Concurrently therewith, the Borrower and the Management
Company will, if so required by the Administrative Agent or the
Required 80% Lenders, enter into an amendment or supplement to this
Agreement to reflect inclusion of such Additional Property as a
Mortgaged Property and a component of the Eligible Real Estate, to
reflect the resulting changes in the Borrowing Base and to make such
other changes to this Agreement as may be necessary or appropriate in
view of the addition of such Additional Property to the Collateral.
(b) If the Borrower shall desire to cause certain real
property owned by the Borrower to become a Mortgaged Property in
substitution for a property which is then a Mortgaged Property
hereunder, the Borrower shall so notify the Administrative Agent and
the Lenders. Such notice shall include: (i) the identity of the
Mortgaged Property for which the Borrower intends to make such
substitution, and a description of the property which the Borrower
would propose to become a Mortgaged Property (the "SUBSTITUTE
PROPERTY"), including historical operating results and occupancy levels
of such Substitute Property; (ii) an appraisal establishing the fair
market value of such Substitute Property, prepared by an appraiser who
is a Member of the American Institute of Real Estate Appraisers (or has
a corresponding professional designation acceptable to the
Administrative Agent), conforming to all requirements applicable to the
Lenders with respect to real estate collateral and otherwise acceptable
to the Administrative Agent and the Required 80% Lenders; (iii) a
commitment for the issuance of a loan policy of title insurance (ALTA
Form B, 1970 Form), issued by a title insurer acceptable to the
Administrative Agent and showing that (A) the Substitute Property is
owned by the Borrower (or will be, prior to the execution and delivery
of the Mortgage encumbering such Substitute Property), and (B) that, if
such Substitute Property were to become a Substitute Property, the
Mortgage encumbering such Substitute Property would be the first and
best lien upon such property, subject only to Permitted Encumbrances
and the Lien of taxes and assessments, both general and special, which
are a Lien but are not then delinquent or due and payable; (iv) a
survey, prepared and certified to the Administrative Agent (and the
title company providing the loan policy referred to below) in
accordance with ALTA/ACSM standards, showing the boundaries of the
Substitute Property, the location of all improvements, required
set-backs and such other information as may be required pursuant to the
foregoing standards, acceptable to the Administrative Agent and
sufficient to permit the issuance of a loan policy of title insurance
without exception for any matter which would be revealed by a survey
and physical inspection of the Substitute Property; (v) a Phase I
environmental report, addressed to the Administrative Agent and the
Lenders (or accompanied by a letter of reliance for their benefit) and
acceptable to the Administrative Agent and the Required 80% Lenders,
showing that such Substitute Property is free of Hazardous Substances
and from violations of Environmental Laws, and is otherwise in
compliance with the requirements set forth in this Agreement with
respect to the Mortgaged Properties and (vi) a statement, showing in
detail and with substantiating information reasonably acceptable to the
Required 80% Lenders, the Property NOI for the Substitute Property for
not less than one full calendar year prior to the date of the notice
with which such information is furnished.
If the Administrative Agent and the Required 80% Lenders shall
approve the proposed substitution of the Substitute Property as a
Mortgaged Property, the Administrative Agent shall so notify the
Borrower, shall assign a Coverage Factor and an initial Market Constant
to such Substitute Property and shall, on the basis of the same,
determine the Borrowing Base for such property. If the Administrative
Agent does not so notify the Borrower that the proposed substitution of
the Substitute Property as a Mortgaged Property has been so approved,
such Substitute Property shall not become a Mortgaged Property and the
property for which it was to be substituted shall remain a Mortgaged
Property.
Promptly after its receipt of such notice, the Borrower shall
execute a Mortgage and such other Security Documents with respect to
such Substitute Property as the Administrative Agent may require in
order to cause such property to comply with the requirements of this
Agreement and the other Loan Documents as Collateral for the
Obligations, shall cause all such Security Documents to be duly
delivered to the Administrative Agent and or recorded in the
appropriate public records, and will cause the title company which
issued the title commitment described above to issue a loan policy of
title insurance to the Administrative
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Agent, containing such coverages and endorsements as the Administrative
Agent may require. Concurrently therewith, (x) or at such later date as
may be requested by the Borrower or as may be necessary in order to
avoid requiring the Borrower to make a prepayment of the Loans pursuant
to section 4.2(b) which the Borrower does not desire to become
obligated to make, the Administrative Agent shall execute and deliver
to the Borrower a release of the Mortgage encumbering the Mortgaged
Property for which such substitution was made, together with a release
of all other Security Documents in favor of the Administrative Agent
which pertain to such property (without thereby releasing or affecting
any Mortgage or Security Document affecting any other Mortgaged
Property), and (y) the Borrower and the Management Company will, if so
required by the Administrative Agent or the Required 80% Lenders, enter
into an amendment or supplement to this Agreement to reflect the
inclusion of such Substitute Property as a Mortgaged Property and a
component of the Eligible Real Estate, to reflect the resulting changes
in the Aggregate Borrowing Base and to make such other changes to this
Agreement as may be necessary or appropriate to reflect the
transactions effected pursuant to this section 7.17(b).
(c) All costs and expenses incurred or payable by the
Administrative Agent or any Lender with respect to or in connection
with the Borrower's exercise of its options under this section 7.17
(including, without limitation, reasonable attorney's fees and further
including any and all taxes, costs, fees and recording expenses in
connection with the implementation of the rights set forth in this
provision) shall be paid by the Borrower on demand.
7.18. INTEREST RATE AND CURRENCY HEDGING. Within 60 days following the
Initial Borrowing Date under the Original Credit Agreement, the Borrower will
enter into one or more Hedge Agreements which shall, collectively, have the
effect of fixing or "capping" the rate of interest on a notional amount of debt
of at least $45,000,000 for a period of at least two years, and which,
collectively, shall not under any circumstances involve an actual or potential
Aggregate Measured Swap Credit Risk in excess of $3,000,000. In addition, the
Borrower may from time to time enter into additional Hedge Agreements for the
purpose of protecting against changes in interest rate or currency exchange
risks, PROVIDED that no such Hedge Agreement shall contain any unusual
speculative features. Each Hedge Agreement entered into as contemplated hereby
shall (i) be embodied in a standard ISDA form of agreement which is acceptable
to the Administrative Agent with respect to any intercreditor issues, and (ii)
involve a counterparty who is a Lender or another financial institution
acceptable to the Administrative Agent. The Borrower will promptly provide to
the Administrative Agent a true and complete copy of each Hedge Agreement
entered into as contemplated hereby. At or following the effective date of any
such Hedge Agreement which involves any Aggregate Measured Swap Credit Risk, the
Administrative Agent may, upon written notification to the Borrower, the Lenders
and the counterparty, designate the credit exposure of such counterparty under
such Hedge Agreement as an obligation entitled to share, PARI PASSU with the
Obligations, in respect of the benefits provided by the Collateral under the
Security Documents, in accordance with the applicable provisions of this
Agreement and the Security Documents, and if the Administrative Agent so
designates such credit exposure, the applicable Hedge Agreement of such
counterparty shall be considered a "DESIGNATED HEDGE AGREEMENT"; PROVIDED that
the Administrative Agent shall not so designate any Hedge Agreement except
pursuant to instructions from, or with the consent of, the Required Lenders,
unless the counterparty is a Lender or an Affiliate of a Lender.
7.19. TENANT ESTOPPEL CERTIFICATES AND SUBORDINATION AGREEMENTS FOR
INITIALLY MORTGAGED PROPERTIES. The Borrower will use commercially reasonable
efforts to obtain and deliver to the Administrative Agent, within 60 days
following the Closing Date, such tenant estoppel certificates and tenant
subordination and nondisturbance agreements, acceptable in form and content to
the Administrative Agent, as the Administrative Agent may require with respect
to any tenant whose lease of any portion of any of the Mortgaged Properties
exceeded 40,000 square feet as of the Closing Date.
7.20. CERTAIN SUBSIDIARIES TO JOIN IN SUBSIDIARY GUARANTY. (a) In the
event that at any time after the Closing Date
(x) the Borrower has any Subsidiary (other than a Foreign
Subsidiary as to which section 7.20(b) applies) which (1) is not a
party to the Subsidiary Guaranty, and (2) has real property assets
and/or tangible
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personal property assets which are not encumbered by a mortgage,
security agreement or similar document and which have an aggregate fair
value in excess of $2,000,000,
(y) an Event of Default shall have occurred and be continuing
and the Borrower has any Subsidiary which is not a party to the
Subsidiary Guaranty,
the Borrower will promptly notify the Administrative Agent in writing of such
event, identifying the Subsidiary in question and referring specifically to the
rights of the Administrative Agent and the Lenders under this section 7.20. The
Borrower will, within 30 days following request therefor from the Administrative
Agent (who may give such request on its own initiative or upon request by any of
the Lenders), cause such Subsidiary to deliver to the Administrative Agent, in
sufficient quantities for the Lenders, (i) a duly executed counterpart of the
Subsidiary Guaranty (herein, as amended or supplemented, the "SUBSIDIARY
GUARANTY"), substantially in the form attached as Exhibit K hereto, or if the
Subsidiary Guaranty has previously been executed and delivered, a joinder
supplement, satisfactory in form and substance to the Administrative Agent and
the Required Lenders, duly executed by such Subsidiary, pursuant to which such
Subsidiary joins in the Subsidiary Guaranty as a guarantor thereunder, and (ii)
if such Subsidiary is a corporation, resolutions of the Board of Directors of
such Subsidiary, certified by the Secretary or an Assistant Secretary of such
Subsidiary as duly adopted and in full force and effect, authorizing the
execution and delivery of the Subsidiary Guaranty or such joinder supplement, as
the case may be, or if such Subsidiary is not a corporation, such other evidence
of the authority of such Subsidiary to execute the Subsidiary Guaranty or such
joinder supplement, as the case may be, as the Administrative Agent may
reasonably request.
(b) Notwithstanding the foregoing provisions of this section 7.20, the
Borrower shall not, unless an Event of Default shall have occurred and be
continuing, be required to cause a Foreign Subsidiary to execute and deliver or
otherwise join in the Subsidiary Guaranty if (i) to do so would subject the
Borrower to liability for additional United States income taxes by virtue of
section 956 (or other applicable provisions) of the Code in an amount the
Borrower considers material, and (ii) the Borrower provides the Administrative
Agent, within the 30-day period referred to in section 7.20(a), with
documentation, including computations prepared by the Borrower's internal tax
officer, its independent accountants or tax counsel, acceptable to the Required
Lenders, in support thereof.
(c) For the avoidance of doubt, it is noted that, based on the
representation (which the Borrower hereby makes) that at and as of the Closing
Date the Borrower will have no Subsidiary which meets the requirements of clause
(x) of section 7.20(a), the Subsidiary Guaranty is not being executed and
delivered at the Closing Date by any of the Subsidiaries of the Borrower.
SECTION 8. NEGATIVE COVENANTS.
The Borrower and the Management Company each hereby covenants and
agrees that so long as this Agreement is in effect and until such time as the
Total Commitment has been terminated, no Notes are outstanding and the Loans,
together with interest, Fees and all other Obligations hereunder, have been paid
in full, it shall comply with, observe, perform or fulfill all of the covenants
set forth below in this section 8 which are to be performed by the Borrower or
the Management Company, as the case may be, as follows:
8.1. LIMITATION ON NATURE OF BUSINESS. Neither the Borrower nor the
Management Company nor any Subsidiary of the Borrower will at any time make any
material alterations in the nature or character of the business of the Borrower,
the Management Company and any such Subsidiaries, taken as a whole, as carried
on at the date hereof, or undertake, conduct or transact any business in a
manner prohibited by applicable law.
8.2. LIMITATION ON CONSOLIDATION AND MERGER. The Borrower shall not
merge or consolidate with any other person, or convey, transfer, lease or
otherwise dispose of (whether in one transaction or in a series of transactions)
all or substantially all of its assets (whether now owned or hereafter acquired)
to any other person, or permit any of its Subsidiaries to do so, and the
Management Company will not do so, EXCEPT THAT, if no Change of Control would
result therefrom, (i) any person may merge with and into the Borrower if the
Borrower is the surviving entity of such merger , (ii) the Management Company or
any Subsidiary of the Borrower may merge into the Borrower if the Borrower is
the
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surviving entity of such merger, (iii) any Subsidiary of the Borrower may
merge with or into any other Subsidiary of the Borrower or (exclusive of the
Borrower, except as permitted above) any other person, and (iv) any Subsidiary
of the Borrower may sell or otherwise dispose of all or substantially all of its
assets, PROVIDED that (A) immediately after giving effect to any such merger or
sale or other disposition of assets referred to in clause (i), (ii), (iii) or
(iv), no Default (including, without limitation, any Default under section 8.8)
would exist, (B) the surviving corporation of any such merger referred to in
clause (i) is, immediately after giving effect to such merger, the Borrower, (C)
if the surviving corporation of any merger referred to in clause (iii) is not,
immediately after giving effect to such merger, a Subsidiary of the Borrower,
the Borrower and/or its Subsidiaries shall have received as consideration for
such merger cash, property or securities representing the fair market value of
the Borrower's and its Subsidiaries' interest in such Subsidiary immediately
prior to such merger (as determined by the trustees of the Borrower), and (D) in
the case of any sale or other disposition referred to in clause (iv), the
Borrower and/or its Subsidiaries shall have (except as otherwise permitted under
section 8.8 hereof) received as consideration for such sale or other disposition
cash, property or securities representing the fair market value of such assets
immediately prior to such sale or other disposition (as determined by the
trustees of the Borrower).
8.3. LIMITATION ON DISTRIBUTIONS, DIVIDENDS AND RETURN OF CAPITAL. (a)
The Borrower shall not, after the occurrence and during the continuance of an
Event of Default hereunder or under any Loan Document, or if after giving effect
thereto there would exist any Default or Event of Default involving section
7.16(d) hereof: (i) declare or pay any Distribution or cash dividends of any
kind on any Securities of any class in its capital; or (ii) make any payments on
account of the purchase or other acquisition or redemption or other retirement
of any Securities of any class in its capital.
(b) The Borrower shall not, directly or indirectly, at any time while
any Default or Event of Default exists hereunder, make any voluntary prepayment
or voluntary redemption of any kind on any Indebtedness for Borrowed Money
(other than the Obligations), or purchase or otherwise acquire any such
Indebtedness for Borrowed Money.
(c) The Borrower shall not at any time make (whether directly or
indirectly) any payments or other distributions of any kind to any Affiliate, or
transfer or assign (whether directly or indirectly) any Property or assets of
any kind to any Affiliate; EXCLUDING, HOWEVER, from the operation of the
foregoing provisions of this provision:
(i) capital contributions or payments to any Subsidiary;
(ii) payments on other transactions or contracts which are
not prohibited by section 8.6;
(iii) remuneration payable by the Borrower to its employees,
trustees or officers in amounts approved by its board of trustees;
(iv) reimbursements by the Borrower of the reasonable
business expenses of its employees, trustees and officers incurred in
the ordinary course of business; and
(v) payments, distributions or transfers which are
consolidated or combined on the Borrower's financial statements and are
not prohibited by any other provision of this Agreement.
(d) Notwithstanding any provision of this section 8.3 to the contrary,
the Borrower may make such Distributions as may be necessary to preserve the
Borrower's status and qualification as a REIT, PROVIDED that if, but for this
section 8.3(d) such Distribution would otherwise be prohibited by the terms of
this Agreement, the Borrower shall, prior to making any such Distribution,
provide the Administrative Agent with an opinion of counsel or other evidence
acceptable to the Administrative Agent confirming the necessity of such
Distribution to the preservation of the Borrower's status and qualification as a
REIT. The making of any Distribution under the circumstances described in this
section 8.3(d) shall not excuse any Default or Event of Default hereunder, or
constitute a waiver by the Administrative Agent or any Lender of any rights or
remedies which may be available to it hereunder or under any of the Loan
Documents in the event of a Default or an Event of Default hereunder.
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8.4. ACQUISITION OF MARGIN SECURITIES. The Borrower shall not own,
purchase or acquire (or enter into any contract to purchase or acquire) any
"margin security" as defined by any regulation of the Federal Reserve Board as
now in effect or as the same may hereafter be in effect UNLESS, prior to any
such purchase or acquisition, the Administrative Agent shall have received a
satisfactory opinion of counsel to the effect that such purchase or acquisition
will not cause this Agreement or the Notes to be in violation of Regulations G,
T, U, X or any other regulation of the Federal Reserve Board then in effect.
8.5. LIMITATION ON INDEBTEDNESS. (a) The Borrower will not, and will
not permit any Subsidiary of the Borrower to, and the Management Company will
not, create, assume or have outstanding at any time any Indebtedness for
Borrowed Money, OTHER THAN:
(i) Indebtedness under the Loan Documents;
(ii) the existing Indebtedness described on Annex VIII
hereto, and any refinancing, extension, renewal or refunding of any
such existing Indebtedness not involving an increase in the aggregate
outstanding principal amount of the Indebtedness so refinanced,
extended, renewed or refunded;
(iii) if at the time of the creation or assumption thereof no
Event of Default shall have occurred and be continuing, or would result
therefrom, additional Indebtedness of the Borrower not otherwise
permitted pursuant to the other clauses of this section 8.5(a),
consisting of short term unsecured borrowings obtained by the Borrower
from a bank or other institutional lender, or in the commercial paper
market, PROVIDED that (A) the outstanding principal balance of all such
borrowings shall not exceed $100,000,000 at any time, and (B) the
aggregate outstanding balance of the Borrower's borrowings in the
commercial paper market shall not exceed at any time the aggregate
unused portions of lines of credit made available to the Borrower for
the purpose of supporting such commercial paper borrowings by banks and
other institutional lenders, together with the amount of any unused
balance of the Total Commitment available hereunder and any unused
portion of any other credit facility otherwise permitted hereunder
which may then be available to the Borrower;
(iv) if at the time of the creation or assumption thereof no
Event of Default shall have occurred and be continuing, or would result
therefrom, additional Indebtedness of the Borrower, any Subsidiary or
the Management Company not otherwise permitted pursuant to the other
clauses of this section 8.5(a), consisting of Indebtedness
("NON-RECOURSE DEBT"), without limitation as to aggregate principal
amount, incurred to finance or refinance the ownership or acquisition
of real property or interests in real property; PROVIDED (A) such
Non-Recourse Debt is secured by mortgages, deeds of trust or deeds to
secure debt encumbering only the real property or real property
interests financed or refinanced thereby, (B) such NonRecourse Debt is
not guaranteed or otherwise supported, directly or indirectly by the
Borrower or any Subsidiary of the Borrower or the Management Company
(subject to customary guaranties and indemnities for fraud, misuse of
proceeds and environmental matters or such other matters as are
reasonably acceptable to the Administrative Agent under the
circumstances), and (C) the recourse of the applicable lender or
lenders in connection with any such Non-Recourse Debt is limited to the
real property or interests in real property financed or refinanced
thereby (subject to customary exceptions for fraud, misuse of proceeds
and environmental matters or such other matters as are reasonably
acceptable to the Administrative Agent under the circumstances);
(v) if at the time of the creation or assumption thereof no
Event of Default shall have occurred and be continuing, or would result
therefrom, additional Indebtedness of the Borrower not otherwise
permitted pursuant to the other clauses of this section 8.5(a),
consisting of Indebtedness incurred to finance or refinance the
ownership or acquisition of real property or interests in real
property; PROVIDED (A) such Indebtedness is secured by mortgages, deeds
of trust or deeds to secure debt encumbering only the real property or
interests in real property interests so financed or refinanced, (B) the
Indebtedness secured by any such real property or real property
interests does not exceed 100% of the fair value thereof (as determined
by the Borrower in good faith), and (C) the aggregate principal amount
of all Indebtedness referred to in this clause (v) outstanding at any
time does not exceed $40,000,000;
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(vi) the Indebtedness of each person which becomes a
Subsidiary of the Borrower as a result of the completion of the
Marathon Transaction, to the extent outstanding at the time it becomes
a Subsidiary of the Borrower, and any refinancing, extension, renewal
or refunding of any such Indebtedness not involving an increase in the
aggregate outstanding principal amount of the Indebtedness so
refinanced, extended, renewed or refunded, PROVIDED that such
Indebtedness is not guaranteed or otherwise supported, directly or
indirectly by the Borrower or any other Subsidiary of the Borrower or
the Management Company (subject to customary guaranties and indemnities
for fraud, misuse of proceeds and environmental matters or such other
matters as are reasonably acceptable to the Administrative Agent under
the circumstances);
(vii) Indebtedness of any Subsidiary of the Borrower owed to
the Borrower or to another Subsidiary of the Borrower; any Indebtedness
owed by the Management Company to the Borrower and its Subsidiaries and
arising out of normal working capital requirements of the Management
Company incident to its management activities relating to Property of
the Borrower and its Subsidiaries; and Indebtedness of the Borrower
owed to its Subsidiaries and the management Company, PROVIDED such
Indebtedness has been subordinated to the Obligations pursuant to
subordination provisions satisfactory in form and substance to the
Required Lenders;
(viii) Indebtedness under Hedge Agreements not constituting
Loan Documents, entered into as contemplated by section 7.18 hereof;
(ix) if at the time of the creation or assumption thereof no
Event of Default shall have occurred and be continuing, or would result
therefrom, additional Indebtedness of the Borrower not otherwise
permitted pursuant to the other clauses of this section 8.5(a),
consisting of Indebtedness secured by Liens permitted by clause (k) of
section 8.7 hereof, PROVIDED that the aggregate outstanding principal
amount thereof does not exceed $1,000,000 at any time;
(x) if approved in writing by the Required Lenders prior to
the time of the creation or assumption thereof, additional Indebtedness
of the Borrower and its Subsidiaries not otherwise permitted pursuant
to the other clauses of this section 8.5(a), consisting of Capitalized
Lease Obligations or other Contingent Obligations; and
(xi) if at the time of the creation or assumption thereof no
Event of Default shall have occurred and be continuing, or would result
therefrom, additional unsecured Indebtedness of the Borrower not
otherwise permitted pursuant to the foregoing clauses of this section
8.5(a), consisting of Subordinated Indebtedness;
PROVIDED, that if any such Indebtedness referred to in clause (iv), (v) or (vi)
above is incurred, created, assumed or becomes outstanding in connection with
the acquisition of any Property having a fair value in excess of $10,000,000,
the Borrower shall have delivered to the Administrative Agent at least two
Business Days prior to such incurrence, creation or assumption a certificate of
a responsible financial officer of the Borrower demonstrating that the
Borrower's PRO FORMA projected ratios to which reference is made in section
7.16(a), (b) and (c), for the succeeding four fiscal quarters and giving effect
to such acquisition and such Indebtedness and assuming an occupancy rate with
respect to rental property equal to the lesser of 90% occupancy or the actual
rate of occupancy, will, based on the assumptions contained in such PRO FORMA
projections (which shall in all events be reasonable), meet the requirements of
such section 7.16(a), (b) and (c) as of the end of each of such fiscal quarters.
(b) The Borrower shall provide the Lenders with written notice,
quarterly within 45 days after the end of each fiscal quarter of the Borrower
during the pendency of this Agreement, showing in detail acceptable to the
Required Lenders the amount, nature, purpose and material terms of the
Borrower's Indebtedness for Borrowed Money (other than the Indebtedness
represented by the Loan Documents). Such notice shall be accompanied by a
statement in detail and content acceptable to the Required Lenders demonstrating
compliance with all of the requirements established by this Agreement, including
without limitation those which are contained in section 8.5(a), and in section
7.16.
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8.6. GUARANTEES. The Borrower shall not, or permit any of its
Subsidiaries to, and the Management Company shall not, guarantee, directly or
indirectly, any Indebtedness for Borrowed Money of any other person, except by
endorsement of negotiable instruments for deposit or collection in the ordinary
course of business, and except for (i) the Contingent Obligations represented by
the Canco Put Agreement, (ii) any Contingent Obligations of any Subsidiary of
Canco in respect of the Canco Credit Agreement, and (iii) indemnity obligations
not to exceed $10 million in the aggregate to permit the Borrower's Affiliates
and Subsidiaries to obtain bid, performance, completion and similar bonds;
PROVIDED that nothing in this covenant shall be deemed to restrict the Borrower,
any Subsidiary or the Management Company from entering into any customary
guaranty or indemnity for fraud, misuse of proceeds or environmental or other
matters of the nature referred to in clause (iv) of section 8.5(a) hereof.
8.7. LIENS. The Borrower will not, and will not permit any of its
Subsidiaries to, and the Management Company will not, create, incur, assume or
suffer to exist any Lien upon or with respect to any Property or assets of any
kind (real or personal, tangible or intangible) of the Borrower or any such
Subsidiary or the Management Company whether now owned or hereafter acquired, or
sell any such Property or assets subject to an understanding or agreement,
contingent or otherwise, to repurchase such Property or assets (including sales
of accounts or rents receivable or notes with recourse to the Borrower or any of
its Subsidiaries or the Management Company, other than for purposes of
collection in the ordinary course of business) or assign any right to receive
income, or file or permit the filing of any financing statement under the UCC or
any other similar notice of Lien under any similar recording or notice statute,
EXCEPT:
(a) Liens for taxes not yet delinquent or Liens for taxes
being contested in good faith and by appropriate proceedings for which
adequate reserves (in the good faith judgment of the management of the
Borrower) have been established;
(b) Liens in respect of Property or assets imposed by law
which were incurred in the ordinary course of business, such as
carriers', warehousemen's, materialmen's and mechanics' Liens and other
similar Liens arising in the ordinary course of business, which do not
in the aggregate materially detract from the value of such Property or
assets or materially impair the use thereof in the operation of the
business of the Borrower or any Subsidiary or the Management Company;
(c) Liens created by this Agreement or the other Loan
Documents;
(d) Liens securing Indebtedness permitted by clause (ii),
(iv), (v) or (vi) of section 8.5(a), PROVIDED any such Lien attaches
only to the Property or assets financed or refinanced by such
Indebtedness;
(e) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under section
9.1(j);
(f) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government
contracts, performance and return-of-money bonds and other similar
obligations incurred in the ordinary course of business (exclusive of
obligations in respect of the payment for borrowed money);
(g) Leases or subleases granted to others not interfering in
any material respect with the business of the Borrower or any of its
Subsidiaries and not otherwise prohibited by the terms of any Loan
Document;
(h) easements, rights-of-way, restrictions, minor defects or
irregularities in title and other similar charges or encumbrances not
interfering in any material respect with the ordinary conduct of the
business of the Borrower or any of its Subsidiaries;
(i) Liens arising from financing statements regarding leases
not in violation of this Agreement;
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(j) Liens created by virtue of Capitalized Lease Obligations
or other lease obligations not prohibited by the terms of this
Agreement, PROVIDED that such Liens are only in respect of the Property
or assets subject to, and secure only, the respective Capital Lease or
other lease obligation;
(k) Liens (i) placed upon equipment or machinery used in the
ordinary course of business of the Borrower or any Subsidiary at the
time of (or within 180 days after) the acquisition thereof by the
Borrower or any such Subsidiary to secure Indebtedness incurred to pay
all or a portion of the purchase price thereof, PROVIDED that the Lien
encumbering the equipment or machinery so acquired does not encumber
any other asset of the Borrower or any Subsidiary; or (ii) existing on
specific tangible assets at the time acquired by the Borrower or any
such Subsidiary or on assets of a person at the time such person first
becomes a Subsidiary of the Borrower, PROVIDED that (A) any such Liens
were not created at the time of or in contemplation of the acquisition
of such assets or person by the Borrower or any of its Subsidiaries,
(B) in the case of any such acquisition of a person, any such Lien
attaches only to specific tangible assets of such person and not assets
of such person generally, (C) the Indebtedness secured by any such Lien
does not exceed 100% of the fair market value of the asset to which
such lien attaches, determined at the time of the acquisition of such
asset or the time at which such person becomes a Subsidiary of the
Borrower (except in the circumstances described in clause (ii) above to
the extent such Liens constituted customary purchase money Liens at the
time of incurrence entered into in the ordinary course of business),
and (D) the Indebtedness secured thereby is permitted by section
8.5(a);
(l) Liens on the Property of any person at the time such
person becomes a Subsidiary of the Borrower, PROVIDED that no such Lien
is created in anticipation of such person becoming a Subsidiary of the
Borrower; and Liens securing any Indebtedness incurred to refinance any
Indebtedness secured by any such Lien, PROVIDED any such Lien attaches
only to the Property or assets secured by the Indebtedness which is so
refinanced;
(m) Liens, not securing Indebtedness for Borrowed Money,
granted to (i) partners or participants in joint venture arrangements
(or any of their Affiliates), securing performance by the Borrower or a
Subsidiary of obligations to make capital contributions or perform
other obligations associated with participation in such partnership or
joint venture, or (ii) persons with whom the Borrower or a Subsidiary
has agreed to exchange any Property, to secure the Borrower's or such
Subsidiary's obligations in connection therewith;
(n) Liens on cash and Cash Equivalents with an aggregate
valuation not in excess of 110% of the outstanding obligations under
the Canco Credit Agreement, securing obligations of the Borrower under
the Canco Put Agreement;
(o) Liens on cash and Cash Equivalents in such amounts as are
required by the Put-Call Agreement (as defined in Annex VII) as in
effect on the Effective Date; and
(p) Permitted Encumbrances.
8.8. SALES OF ASSETS, ETC. The Borrower shall not sell or otherwise
transfer, or permit any Subsidiary to sell or otherwise transfer, directly or
indirectly (by merger or otherwise), any assets or other Property (including,
without limitation, any shares of capital stock of any Subsidiary) outside of
the ordinary course of business, EXCEPT THAT (i) the foregoing restriction shall
not apply to transfers by a Subsidiary of the Borrower to the Borrower or to a
Wholly-Owned Subsidiary of the Borrower, or by the Borrower to a Wholly-Owned
Subsidiary of the Borrower; (ii) if no Event of Default shall have occurred and
be continuing or would result therefrom, the Borrower or any Subsidiary may sell
or otherwise transfer, outside of the ordinary course of business, any Mortgaged
Property for consideration consisting of cash, stock, securities or other
Property having a fair value at least equal to the Mortgaged Property so sold or
otherwise transferred, in connection with the addition or substitution of an
Additional Property or Substitute Property in compliance with the requirements
of section 7.17; and (iii) if no Event of Default shall have occurred and be
continuing or would result therefrom, the Borrower or any Subsidiary may sell or
otherwise transfer, outside of the ordinary course of business, assets or other
Property, other than any Mortgaged Property, for consideration consisting of
cash, stock, securities or other Property having a fair value at least equal to
the assets or other Property so sold or otherwise transferred (as determined by
the Borrower in good faith), PROVIDED that the net cash proceeds of any such
sale or
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transfer are (A) reinvested in the business of the Borrower and its Subsidiaries
within six months following receipt thereof, or (B) applied to the repayment,
prepayment or other retirement of Indebtedness for Borrowed Money, or (C) to the
extent not so reinvested or applied, are paid as a Distribution in accordance
with section 8.3 hereof.
8.9. LEASING OF ELIGIBLE REAL ESTATE. Neither the Borrower nor the
Management Company will enter into, or permit to exist, any lease of all or any
portion of any of the Eligible Real Estate, OTHER THAN:
(a) presently existing occupancy leases of portions of any
Property constituting a Mortgaged Property, and renewals of any thereof
entered into in the ordinary course of business at lease rates and
other terms which are consistent with prevailing market conditions in
the area at the time of execution or renewal thereof, PROVIDED any such
lease which covers more than 40,000 square feet is subject and
subordinate to the Lien of the Mortgage covering such Mortgaged
Property or the tenant has entered into a subordination and
non-disturbance agreement with respect thereto which is satisfactory in
form and substance to the Administrative Agent;
(b) occupancy leases of portions of any Property constituting
a Mortgaged Property, entered into or renewed after the Closing Date in
the ordinary course of business at lease rates and other terms which
are consistent with prevailing market conditions in the area at the
time of execution or renewal thereof, PROVIDED any such lease is
subject and subordinate to the Lien of the Mortgage covering such
Mortgaged Property or the tenant has entered into a subordination and
non-disturbance agreement with respect thereto which is satisfactory in
form and substance to the Administrative Agent, and, PROVIDED, FURTHER,
that in the case of any such lease which (i) covers more than 40,000
square feet of space, or (ii) has a basic term, including any renewals
at the option of the tenant at fixed rental rates, in excess of 15
years, the Borrower shall have provided to the Administrative Agent at
least 10 days prior to the execution of any commitment therefor a
notice describing in reasonable detail the principal terms thereof.
8.10. TRANSACTIONS WITH AFFILIATES. The Borrower shall not enter into
or participate in any agreements or transactions of any kind with any Affiliates
of the Borrower, EXCEPT: (i) agreements or transactions that individually
produce annual payments of less than $50,000; (ii) agreements or transactions
entered into in the ordinary course of business on an arms-length basis; (iii)
agreements, including but not limited to net-lease arrangements with the
Management Company, which are permitted pursuant to section 8.3(c)(v); or (iv)
those transactions set forth on Annex VII hereto.
8.11. LIMITATION ON CERTAIN ACTIONS. In the event of any conflict
between the provisions of this section 8 and the financial covenants set forth
in section 7.16, the latter shall control. The Borrower shall not take any
action otherwise permitted by any provision of this section 8 if such action
would result in a violation of any one or more, or all, of the financial
covenants set forth in section 7.16.
SECTION 9. EVENTS OF DEFAULT; REMEDIES.
9.1. EVENTS OF DEFAULT. The occurrence of any of the following
specified events (each an "EVENT OF DEFAULT") shall constitute an Event of
Default:
(a) PRINCIPAL AND INTEREST: any principal, interest or any
other sum payable under this Agreement or the Notes shall not be paid
within five days of when due;
(b) REPRESENTATION AND WARRANTIES: any representation or
warranty at any time made by or on behalf of the Borrower or the
Management Company in this Agreement, any Loan Document or in any
certificate, written report or statement furnished to the
Administrative Agent or the Lenders in connection therewith shall prove
to have been untrue, incorrect or breached in any material respect on
or as of the date on which the same was made or was deemed to have been
made or repeated;
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(c) CERTAIN COVENANTS: the Borrower or the Management Company
shall fail to comply with any of the covenants set forth in sections
7.2(b), 7.5(a), 7.8(a), 7.16, 8.2, 8.3, 8.5, 8.6, 8.7, 8.8 or 8.9;
(d) OTHER COVENANTS: the Borrower or the Management Company
shall fail to perform, comply with or observe any other covenant or
agreement contained in this Agreement and such failure or breach shall
continue for more than 30 days after the earlier of the date on which
the Borrower shall have first become aware of such failure or breach or
the Administrative Agent or any Lender shall have first notified the
Borrower of such failure or breach (PROVIDED, HOWEVER, that solely with
respect to defaults of the nature described in this section 9.1(d)
which cannot be cured by the payment of money and cannot using
appropriate diligence be cured within such 30-day period, the Borrower
shall not be deemed to have defaulted hereunder, PROVIDED that the
Borrower shall commence reasonable curative action with respect to such
matter within such 30-day period and shall thereafter diligently and
continuously prosecute the same to a timely completion);
(e) LOAN DOCUMENTS: the Borrower or the Management Company
shall fail to observe or perform in any material fashion any of its
obligations or undertakings under any Loan Document other than this
Agreement, and such failure shall continue beyond the applicable period
of grace (if any) provided therein, or any Loan Document shall cease,
except as specifically provided herein, to be legal, valid, binding or
enforceable in accordance with its terms;
(f) LITIGATION: any action at law, suit in equity or other
legal or administrative proceeding to amend, cancel, revoke or rescind
any Loan Document shall be commenced by or on behalf of the Borrower or
the Management Company or by any court or any other Governmental
Authority, or any court or any other Governmental Authority shall make
a determination, or issue a judgment, order, decree or ruling to the
effect that, any one or more of the covenants, agreements or
obligations of the Borrower or the Management Company hereunder or
under any one or more of the other Loan Documents are illegal, invalid
or unenforceable in accordance with the terms thereof;
(g) ACCELERATION OF OTHER INDEBTEDNESS; COLLATERALIZATION
EVENT UNDER CANCO CREDIT AGREEMENT: the Borrower or any Subsidiary
shall default under any agreement, instrument or contract relating to
any Indebtedness of the Borrower or any such Subsidiary or by which any
of its assets or Property is bound, other than any Non-Recourse Debt,
and such default shall result in any such Indebtedness of the Borrower
or any such Subsidiary having an outstanding principal balance,
immediately prior to the occurrence of such default, of $1,000,000 or
more becoming or being declared due and payable prior to the date on
which such Indebtedness or any part thereof would otherwise have become
due and payable; or any Collateralization Event (as defined in the
Canco Put Agreement) shall occur and the consequences thereof shall not
be waived as provided in the Canco Put Agreement, and the Required
Lenders shall have determined in their reasonable judgment that as a
result thereof the Borrower's ability to refinance the Obligations is
materially adversely affected;
(h) INSOLVENCY-VOLUNTARY: if the Borrower or the Management
Company shall: (1) take any action for the termination, winding up,
liquidation or dissolution of the Borrower or the Management Company,
as the case may be; (2) make a general assignment for the benefit of
creditors, become insolvent or be unable to pay its debts as they
mature; (3) file a petition in voluntary liquidation or bankruptcy; (4)
file a petition or answer or consent seeking the reorganization of the
Borrower or the Management Company, as the case may be, or the
readjustment of any of the Indebtedness of the Borrower or the
Management Company, as the case may be; (5) commence any case or
proceeding under applicable insolvency or bankruptcy laws now or
hereafter existing; (6) consent to the appointment of any receiver,
administrator, custodian, liquidator or trustee of all or any part of
its assets or Property; (7) take any corporate or other organizational
action for the purpose of effecting any of the foregoing; or (8) be
adjudicated as bankrupt or insolvent;
(i) INSOLVENCY-INVOLUNTARY: if any petition for any
proceedings in bankruptcy or liquidation or for the reorganization or
readjustment of Indebtedness of the Borrower or the Management Company,
as the case may be, shall be filed, or any case or proceeding shall be
commenced, under any applicable bankruptcy or insolvency laws now or
hereafter existing, against the Borrower or the Management Company,
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as the case may be, or any receiver, administrator, custodian,
liquidator or trustee shall be appointed for the Borrower or the
Management Company, as the case may be, or for all or any part of the
Borrower's or the Management Company's, as the case may be, assets or
Property, or any order for relief shall be entered in a proceeding with
respect to the Borrower or the Management Company, as the case may be,
under the provisions of the United States Bankruptcy Code, as amended,
and such proceeding or such appointment shall not be dismissed or
discharged, as the case may be, within 45 days after the filing or
appointment thereof;
(j) JUDGMENTS, ETC.: any final and non-appealable judgment,
order or decree for the payment of money in excess of $500,000 shall be
rendered against the Borrower or the Management Company, as the case
may be, and shall not be discharged within 30 days after the date of
the entry thereof;
(k) ERISA: any Reportable Event shall occur and, as of the
date thereof or any subsequent date, the sum of the various liabilities
of the Borrower and its ERISA Affiliates including, without limitation,
any liability to the Pension Benefit Guaranty Corporation or its
successor or to any other party under sections 4062, 4063, or 4064 of
ERISA or any other provision of law resulting from or otherwise
associated with such event exceeds $50,000; or the Borrower or any of
its ERISA Affiliates as an employer under any Multiemployer Plan shall
have made a complete or partial withdrawal from such Multiemployer
Plans and the plan sponsors of such Multiemployer Plans shall have
notified such withdrawing employer that such employer has incurred a
withdrawal liability requiring a payment in an amount exceeding
$50,000; or
(l) LOSS OF LICENSES OR PERMITS: any of the Licenses and
Permits now held or hereafter acquired by the Borrower shall be revoked
or terminated and not renewed and the absence of any such Licenses and
Permits would have a material adverse impact on the business, Property,
prospects, profits or condition (financial or otherwise) of the
Borrower.
9.2. ACCELERATION, ETC. Upon the occurrence of any Event of Default,
and at any time thereafter, if any Event of Default shall then be continuing,
the Administrative Agent shall, upon the written request of the Required
Lenders, by written notice to the Borrower, take any or all of the following
actions, without prejudice to the rights of the Administrative Agent or any
Lender to enforce its claims against the Borrower, except as otherwise
specifically provided for in this Agreement (PROVIDED that, if an Event of
Default specified in section 9.1(h) or (i) shall occur with respect to the
Borrower, the result which would occur upon the giving of written notice by the
Administrative Agent as specified in clauses (i) and (ii) below shall occur
automatically without the giving of any such notice): (i) declare the Total
Commitment terminated, whereupon the Commitment of each Lender shall forthwith
terminate immediately and any Commitment Commission shall forthwith become due
and payable without any other notice of any kind; (ii) declare the principal of
and any accrued interest in respect of all Loans, all Unpaid Drawings and all
obligations owing hereunder and thereunder to be, whereupon the same shall
become, forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower; (iii)
enforce, as Administrative Agent (or direct the Administrative Agent to
enforce), any or all of the Liens and security interests created pursuant to the
Security Documents; (iv) terminate any Letter of Credit which may be terminated
in accordance with its terms; and (v) direct the Borrower to pay (and the
Borrower hereby agrees that on receipt of such notice or upon the occurrence of
an Event of Default with respect to the Borrower under section 9.1(e), it will
pay) to the Administrative Agent an amount of cash equal to the aggregate Stated
Amount of all Letters of Credit then outstanding (such amount to be held as
security after the Borrower's reimbursement obligations in respect thereof).
9.3. REMEDIES. Upon and during the continuance of an Event of Default,
the Administrative Agent and each Lender may proceed to protect and enforce all
or any of its rights, remedies, powers and privileges under this Agreement, the
Notes or any of the other Loan Documents by action at law, suit in equity or
other appropriate proceedings, whether for specific performance of any covenant
contained in this Agreement, the Notes or any of the other Loan Documents, or in
aid of the exercise of any power granted to the Administrative Agent or any
Lender herein or therein.
9.4. APPLICATION OF LIQUIDATION PROCEEDS. All monies received by the
Administrative Agent or any Lender from the exercise of remedies hereunder or
under the Security Documents, the other Loan Documents or under
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any other documents relating to this Agreement shall, unless otherwise required
by the terms of the Security Documents, the other Loan Documents or by
applicable law, be applied as follows:
(i) FIRST, to the payment of all expenses (to the extent not
paid by the Borrower) incurred by the Administrative Agent and the
Lenders in connection with the exercise of such remedies, including,
without limitation, all costs and expenses of collection, reasonable
attorneys' fees, court costs and foreclosure expenses;
(ii) SECOND, to the payment PRO RATA of interest then accrued
on the outstanding Loans;
(iii) THIRD, to the payment PRO RATA of any fees then accrued
and payable to the Administrative Agent, any Letter of Credit Issuer or
any Lender under this Agreement in respect of the Loans or the Letter
of Credit Outstandings;
(iv) FOURTH, to the payment PRO RATA of (A) the principal
balance then owing on the outstanding Loans, (B) the Stated Amount of
the Letter of Credit Outstandings (to be held and applied by the
Administrative Agent as security for the reimbursement obligations in
respect thereof), and (C) the amounts owing in respect of any
termination of any of the Designated Hedge Agreements;
(v) FIFTH, to the payment to the Lenders of any amounts then
accrued and unpaid under sections 1.10, 1.11, 2.5 and 4.4 hereof, and
if such proceeds are insufficient to pay such amounts in full, to the
payment of such amounts PRO RATA;
(vi) SIXTH, to the payment PRO RATA of all other amounts owed
by the Borrower or the Management Company to the Administrative Agent,
to any Letter of Credit Issuer or any Lender under this Agreement, any
Security Document, or any other Loan Document, and if such proceeds are
insufficient to pay such amounts in full, to the payment of such
amounts PRO RATA; and
(vii) FINALLY, any remaining surplus after all of the
Obligations have been paid in full, to the Borrower or to whomsoever
shall be entitled thereto.
SECTION 10. DEFINITIONS AND TERMS.
10.1. CERTAIN DEFINED TERMS. As used herein, the following terms shall
have the meanings herein specified unless the context otherwise requires:
"ACCOUNTANTS" means Xxxxxx Xxxxxxxx LLP, or another "Big Six" firm of
certified public accountants selected by the Borrower from time to time as its
auditing and accounting firm.
"ADMINISTRATIVE AGENT" shall have the meaning provided in the first
paragraph of this Agreement and shall include any successor to the
Administrative Agent appointed pursuant to section 11.9.
"ADJUSTED NET WORTH" means combined shareholders' equity, as determined
for the Borrower, the Management Company and their Subsidiaries on a combined
basis in accordance with GAAP, REDUCED by the sum of (i) any revaluation in the
book value of any asset resulting in the write-up thereof which is reflected in
the financial statements of the Borrower subsequent to June 30, 1997, other than
write-ups permitted under GAAP, (ii) goodwill, (iii) all unamortized debt
discount and expense, (iv) the aggregate amount of all deferred charges, and
(iv) organizational expenses and other items treated as intangibles in
accordance with GAAP.
"AFFILIATE" means, in relation to any person (herein, an "AFFILIATED
PERSON"), any person (other than a Subsidiary) which (directly or indirectly)
controls or is controlled by or is under common control with such Affiliated
Person. For the purposes of this definition, the term "control" shall mean the
possession (directly or indirectly) of the power to direct or to cause the
direction of the management or the policies of a person, whether through the
ownership of shares of any class in the capital or any other voting securities
of such person, by contract or otherwise.
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"AGGREGATE BORROWING BASE" means, as at any time during the pendency of
this Agreement, the sum of the Borrowing Bases for each Mortgaged Property then
included in the Eligible Real Estate.
"AGGREGATE MEASURED SWAP CREDIT RISK" means, as at any time during the
pendency of this Agreement that an Hedge Agreement is in effect, the amount
determined by the Administrative Agent in accordance with the terms of such
Hedge Agreement as being the Borrower's measured credit risk thereunder to the
counterparty at such time.
"AGREEMENT" shall mean this Amended and Restated Credit Agreement,
including all the Annexes and Exhibits hereto, as the same may be from time to
time further modified, amended and/or supplemented.
"APPRAISED VALUE" means, as to each Additional Property or Substitute
Property, the fair market value of such property as determined by an appraiser
who is a member of the American Institute of Real Estate Appraisers (or has a
corresponding professional designation acceptable to the Administrative Agent),
pursuant to an appraisal acceptable to the Administrative Agent and the Required
Lenders prepared and delivered in conformity with any and all regulations and
legal requirements applicable to the Lenders with respect to real property
collateral.
"ASSIGNMENT AGREEMENT" shall mean an Assignment Agreement substantially
in the form of Exhibit G hereto.
"AUTHORIZED OFFICER" shall mean any executive officer or employee of
the Borrower or the Management Company designated as such in writing to the
Administrative Agent by the Borrower or the Management Company.
"BASE RATE" shall mean, for any period, a fluctuating interest rate per
annum as shall be in effect from time to time which rate per annum shall at all
times be equal to the greater of (i) the rate of interest established by
National City Bank in Cleveland, Ohio, from time to time, as its prime rate,
whether or not publicly announced, which interest rate may or may not be the
lowest rate charged by it for commercial loans or other extensions of credit;
and (ii) the Federal Funds Effective Rate in effect from time to time PLUS 1/2
of 1% per annum.
"BASE RATE LOAN" shall mean each Loan bearing interest at the rates
provided in section 1.8(a).
"BORROWER" shall have the meaning provided in the first paragraph of
this Agreement.
"BORROWING" shall mean the incurrence of Loans, consisting of one Type
of Loan, by the Borrower from all of the Lenders having Commitments, on a PRO
RATA basis on a given date (or resulting from conversions on a given date),
having in the case of Eurodollar Loans the same Interest Period.
"BORROWING BASE" shall mean, with respect to each Mortgaged Property
comprised within the Eligible Real Estate, the value ascribed to such Mortgaged
Property for certain purposes in respect of the transactions contemplated by
this Agreement, and shall be calculated and reported, quarterly, by dividing
such Mortgaged Property's Property NOI by the product resulting from the
multiplication of such Mortgaged Property's Coverage Factor by its Market
Constant, to-wit:
Property NOI
-----------------------
Borrowing Base = (Coverage Factor) x (Market Constant)
As of the date hereof, the initial Aggregate Borrowing Base has been determined
to be $147,171,100, computed as described in Annex III.
"BUSINESS DAY" shall mean (i) for all purposes other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which shall be
in Cleveland, Ohio a legal holiday or a day on which banking institutions are
authorized by law or other governmental actions to close and (ii) with respect
to all notices and determinations in connection with, and payments of principal
and interest on, Eurodollar Loans, any day which is a Business Day described in
clause (i) and which is also a day for trading by and between banks in U.S.
dollar deposits in the interbank Eurodollar market.
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"CANCO" shall mean 3357392 Canada Inc., a Canadian company into which
Imperial Parking Limited, a Canadian company has been amalgamated, and its
successors and assigns.
"CANCO CREDIT AGREEMENT" shall mean a credit agreement providing credit
facilities of up to Cdn.$50,000,000 to Canco and its Subsidiaries.
"CANCO PUT AGREEMENT" shall mean an agreement of the Borrower, for the
benefit of the lenders under the Canco Credit Agreement, containing terms and
provisions substantially to the effect provided in the form of Put Agreement
supplied by the Borrower immediately prior to the execution and delivery of this
Agreement by the Administrative Agent and the Lenders, providing, among other
things, for (i) the purchase by the Borrower, in certain events, for cash of any
or all of the outstanding loans, commitments and other obligations of any or all
of the lenders under the Canco Credit Agreement, and/or (ii) in certain
circumstances, the Borrower to provide collateral security for its obligations
under the Canco Put Agreement.
"CAPITAL LEASE" as applied to any person shall mean any lease of any
property (whether real, personal or mixed) by that person as lessee which, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that person.
"CAPITALIZED LEASE OBLIGATIONS" shall mean all obligations under
Capital Leases of the Borrower or any of its Subsidiaries in each case taken at
the amount thereof accounted for as liabilities in accordance with GAAP.
"CASH EQUIVALENTS" shall mean (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (PROVIDED that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than one year from the date of acquisition, (ii) U.S. dollar denominated time
deposits, certificates of deposit and bankers' acceptances of (x) any Lender or
(y) any bank whose short-term commercial paper rating from S&P is at least A-1
or the equivalent thereof or from Xxxxx'x is at least P-1 or the equivalent
thereof (any such bank, an "APPROVED LENDER"), in each case with maturities of
not more than one year from the date of acquisition, (iii) commercial paper
issued by any Lender or Approved Lender or by the parent company of any Lender
or Approved Lender and commercial paper issued by, or guaranteed by, any
industrial or financial company with a short- term commercial paper rating of at
least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent
thereof by Moody's, or guaranteed by any industrial company with a long term
unsecured debt rating of at least A or A2, or the equivalent of each thereof,
from S&P or Moody's, as the case may be, and in each case maturing within one
year after the date of acquisition, (iv) investments in money market funds
substantially all the assets of which are comprised of securities of the types
described in clauses (i) through (iii) above, (v) investments in money market
funds associated with "sweep accounts" maintained with a Lender or Approved
Lender, (vi) deposits and investments made in accordance with the security
requirements of the Canco Put Agreement referred to in section 6.11(c) hereof
and/or any of the Put-Call Agreement, the Security Trust Indenture, the Deposit
Agreement and/or the Ancillary Agreement, each as referred to in Annex VII
hereto, in any case without giving effect to any future modifications thereof
contractually increasing the security required to be provided thereunder, and
(vii) without limitation of the preceding clause, in the case of any Foreign
Subsidiary, aggregate deposits not in excess of $5,000,000 (or the equivalent in
any applicable foreign currency) with any financial institution or institutions,
each of which has undivided capital and surplus of at least $250,000,000 (or the
equivalent in any foreign currency).
"CHANGE OF CONTROL" shall mean and include any of the following:
(i) during any period of two consecutive calendar years,
individuals who at the beginning of such period constituted the
Borrower's trustees (together with any new trustees whose election by
the Borrower's trustees or whose nomination for election by the
Borrower's shareholders was approved by a vote of at least two-thirds
of the trustees then still in office who either were trustees at the
beginning of such period or whose election or nomination for election
was previously so approved) cease for any reason to constitute a
majority of the trustees then in office;
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(ii) any person or group (as such term is defined in section
13(d)(3) of the Securities Exchange Act of 1934, as amended (the "1934
ACT")), shall acquire, directly or indirectly, beneficial ownership
(within the meaning of Rule 13d-3 and 13d-5 of the 0000 Xxx) of more
than 35%, on a fully diluted basis, of the economic or voting interest
in the Borrower's shares of beneficial interest (or other equity
securities equivalent thereto);
(iii) the full time active employment of Xxxxx X. Xxxxxxxxxx
as chief executive officer of the Borrower shall be voluntarily
terminated by the Borrower or Xx. Xxxxxxxxxx, or shall otherwise cease,
other than by reason of death or disability, unless a successor
acceptable to the Required Lenders shall have been appointed or elected
and actually taken office within three months following any such
termination or cessation, in which case the name of such successor
shall be substituted for the name of the person he or she replaces for
purposes of this clause (iii);
(iv) the shareholders of the Borrower approve a merger or
consolidation of the Borrower with any other person, other than a
merger or consolidation which would result in the voting securities of
the Borrower outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted or
exchanged for voting securities of the surviving or resulting entity)
more than 75% of the combined voting power of the voting securities of
the Borrower or such surviving or resulting entity outstanding after
such merger or consolidation;
(v) the shareholders of the Borrower approve a plan of
complete liquidation of the Borrower or an agreement or agreements for
the sale or disposition by the Borrower of all or substantially all of
the Borrower's assets; and/or
(vi) any "change in control" or any similar term as defined
in any of the indentures, credit agreements or other instruments
governing any Indebtedness of the Borrower or any of its Subsidiaries,
in circumstances where the holders of such securities or indebtedness
(or an agent or trustee therefor) exercise rights upon the occurrence
of a "change in control" to require prepayment, redemption or
repurchase by the Borrower involving an aggregate payment by the
Borrower in excess of $1,000,000, or the Borrower otherwise becomes
obligated upon the occurrence of such a "change in control" to make any
such payment.
"CLOSING DATE" shall mean the date, on or after the Effective Date,
upon which the conditions specified in section 5.1 are satisfied, which date is
December 16, 1997.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and the rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the Effective
Date and any subsequent provisions of the Code, amendatory thereof, supplemental
thereto or substituted therefor.
"COLLATERAL" means any and all rights and interests in or to property
now or hereafter pledged, given or granted as security for the Obligations
pursuant to any of the Loan Documents, including, without limitation, those
Mortgaged Properties which are more particularly described in the forms of
Mortgages attached as Exhibits D-7 through D-10 hereto and in the Mortgages
being amended by the amendments to Mortgages in the forms of the amendments
attached as Exhibits D-1 through D-6 hereto.
"COMMITMENT" shall mean, with respect to each Lender, the amount set
forth opposite such Lender's name in Annex I as its "Commitment" as the same may
be reduced from time to time pursuant to section 3.2 and/or 9 or adjusted from
time to time as a result of assignments to or from such Lender pursuant to
section 12.4.
"COMMITMENT COMMISSION" shall have the meaning provided in section
3.1(a).
"COMPLIANCE CERTIFICATE" means a certificate, substantially in the form
of Exhibit J, evidencing the Borrower's compliance with the requirements imposed
upon it by this Agreement, to be furnished to the Lenders quarterly.
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"CONTINGENT OBLIGATION" means any direct or indirect liability,
contingent or otherwise, with respect to any Indebtedness, lease, dividend,
letter of credit, banker's acceptance or other obligation of another person
incurred to provide assurance to the obligee of such obligation that such
obligation will be paid or discharged, that any agreements relating thereto will
be complied with, or that the holders of such obligation will be protected (in
whole or in part) against loss in respect thereof. Contingent Obligations shall
include, without limitation, (i) the direct or indirect guaranty, endorsement
(otherwise than for collection or deposit in the ordinary course of business),
comaking, discounting with recourse or sale with recourse by any person of the
obligation of another person; (ii) any liability for the obligations of another
person through any agreement (contingent or otherwise) (A) to purchase,
repurchase or otherwise acquire such obligation or any security therefor, or to
provide funds for the payment or discharge of such obligation (whether in the
form of loans, advances, stock purchases, capital contributions or otherwise),
(B) to maintain the solvency of any balance sheet item, level of income or
financial condition of another, or (C) to make take-or-pay, pay-or-play or
similar payments if required regardless of nonperformance by any other party or
parties to an agreement, if in the case of any agreement described under
subclauses (A), (B) or (C) of this sentence the purpose or intent thereof is to
provide the assurance described above. The amount of any Contingent Obligation
shall be equal to the amount of the obligation so guaranteed or otherwise
supported.
"COVERAGE FACTOR" shall mean the factor, determined by the
Administrative Agent from time to time on not less than 30 days' prior written
notice to the Borrower and the Lenders, with respect to each respective
Mortgaged Property included as Eligible Real Estate, by which the Market
Constant for such Mortgaged Property shall be multiplied to determine the
denominator used to calculate the Borrowing Base attributable to such Mortgaged
Property. In determining any Coverage Factor for any Mortgaged Property or any
changes therein (i) the Administrative Agent shall make such determinations
(other than the initial determinations set forth on Annex III) only pursuant to
instructions from, or with the consent of, the Required Lenders, and (ii) no
Coverage Factor shall ever be less than 1.2X nor greater than 1.3X. The initial
Coverage Factor for each initial Mortgaged Property is set forth on Annex III.
"CREDIT EVENT" shall mean the making of any Loans and/or the issuance
of any Letter of Credit.
"CREDIT PARTY" means the Borrower, the Management Company and any
Affiliate of either which shall have executed and delivered any Loan Document.
"DECLARATION OF TRUST" means the Borrower's Amended Declaration of
Trust, dated July 25, 1986, as the same may hereafter be amended from time to
time.
"DEFAULT" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"DEFAULTING LENDER" shall mean any Lender with respect to which a
Lender Default is in effect.
"DESIGNATED HEDGE AGREEMENT" shall have the meaning provided in section
7.18.
"DISTRIBUTION" means: (i) the declaration or payment of any dividends
or other distributions on or in respect of capital stock or other equity
interests, including but not limited to certificates of beneficial interest
(except distributions in such equity interests); or (ii) the redemption,
acquisition or other retirement of Securities, except such redemptions,
acquisitions or other retirements made as a part of the same transaction from
the net proceeds of the sale of such Securities.
"EBITDA" means, for any fiscal quarter or other fiscal period of the
Borrower, on a combined basis for the Borrower, the Management Company and their
Subsidiaries, the Borrower's Net Income for such fiscal quarter or other fiscal
period, increased by the sum for such quarter or period of interest expense,
income and franchise tax expense, and amortization and depreciation (in each
case as determined in accordance with GAAP) deducted in determining Net Income
for such quarter or period.
"EFFECTIVE DATE" shall have the meaning provided in section 12.10.
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"ELIGIBLE REAL ESTATE" means all of the Mortgaged Properties.
"ELIGIBLE TRANSFEREE" shall mean and include a commercial bank,
financial institution or other "accredited investor" (as defined in SEC
Regulation D), in each case which is not a direct competitor of the Borrower or
engaged in the same or similar business as the Borrower, or any of its
respective Subsidiaries or is not an Affiliate of any such competitors of the
Borrower or any of its respective Subsidiaries.
"EMPLOYEE BENEFIT PLAN" means an "employee benefit plan" as defined in
Section 3(3) of ERISA.
"ENVIRONMENTAL INDEMNITY AGREEMENTS" means the environmental indemnity
agreements now or hereafter executed and delivered by the Borrower to the
Administrative Agent, substantially in the form of Exhibit F hereto.
"ENVIRONMENTAL LAWS" means all present and future laws, statutes,
ordinances, rules, regulations, orders, and determinations of any Federal, state
or local governmental authority pertaining to health, protection of the
environment, natural resources, conservation, wildlife, waste management,
regulation of activities involving Hazardous Substances, and pollution,
including, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act ("SUPERFUND" or "CERCLA"), 42 U.S.C. Section
9601 ET SEQ., the Superfund Amendments and Reauthorization Act of 1986 ("XXXX"),
42 U.S.C. Section 9601(20)(D), the Resource Conservation and Recovery Act
("RCRA"), 42 U.S.C. Section 6901 ET SEQ., the Federal Water Pollution Control
Act, as amended by the Clean Water Act (the "CLEAN WATER ACT"), 33 U.S.C.
Section 1251 ET SEQ., the Clean Air Act ("CAA"), 42 U.S.C. Section 7401 ET SEQ.,
and the Toxic Substances Control Act, 15 U.S.C. Section 2601 ET SEQ., together
with any and all applicable licenses, permits or governmental approvals
pertaining to, or establishing standards with respect to, any of the foregoing
matters, as any of the foregoing may be amended or supplemented.
"ENVIRONMENTAL CLAIMS" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, Liens,
notices of non-compliance or violation, investigations or proceedings relating
in any way to any Environmental Law or any permit issued under any such law
(hereafter "CLAIMS"), including, without limitation, (a) any and all Claims by
governmental or regulatory authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and (b) any and all Claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from the storage, treatment or Release (as defined
in CERCLA) of any Hazardous Substances or arising from alleged injury or threat
of injury to health, safety or the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974 and
the rules and regulations issued thereunder, as the same may be amended from
time to time, and including any successor statute.
"ERISA AFFILIATE" means, in relation to any person, any trade or
business (whether or not incorporated) which is a member of a group of which
that person is a member and which is under common control with such person
within the meaning of the regulations promulgated under Section 414 of the Code,
as amended.
"ERISA LIABILITIES" means the aggregate of all unfunded vested benefits
under any plan of the Borrower or any ERISA Affiliate of the Borrower under any
Plan covered by ERISA that is not a Multi-employer Plan, and all potential
withdrawal liabilities of any thereof under all Multiemployer Plans.
"EURODOLLAR LOANS" shall mean each Loan bearing interest at the rates
provided in section 1.8(b).
"EURODOLLAR RATE" shall mean with respect to each Interest Period for a
Eurodollar Loan, (A) the offered quotation to first-class banks in the interbank
Eurodollar market, as determined by the Administrative Agent for dollar deposits
of amounts in same day funds comparable to the outstanding principal amount of
the Eurodollar Loan of the Administrative Agent for which an interest rate is
then being determined with maturities comparable to the Interest Period to be
applicable to such Eurodollar Loan, determined as of 11:00 A.M. (London time) on
the date which is two Business Days prior to the commencement of such Interest
Period, in each case divided (and rounded upward to the next whole multiple of
1/16 of 1%) by (B) a percentage equal to 100% minus the then stated maximum rate
of all reserve requirements (including, without limitation, any marginal,
emergency, supplemental, special or other reserves)
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applicable to any member bank of the Federal Reserve System in respect of
Eurocurrency liabilities as defined in Regulation D (or any successor category
of liabilities under Regulation D).
"EVENT OF DEFAULT" shall have the meaning provided in section 9.1.
"EXISTING LETTER OF CREDIT" shall have the meaning provided in section
2.1(d).
"EXPIRATION DATE" shall mean December 15, 1997.
"FACING FEE" shall have the meaning provided in section 3.1(c)
"FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any period, a
fluctuating interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal Funds transactions with members of the
Federal Reserve System arranged by Federal Funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Administrative Agent from three Federal
Funds brokers of recognized standing selected by the Administrative Agent.
"FEES" shall mean all amounts payable pursuant to, or referred to in,
section 3.1.
"FOREIGN SUBSIDIARY" shall mean any Subsidiary (i) which is not
incorporated under the laws of one of the States of the United States, or under
the laws of the District of Columbia, and substantially all of whose assets and
properties are located, or substantially all of whose business is carried on,
outside the United States, or (ii) substantially all of whose assets consist of
Subsidiaries that are Foreign Subsidiaries as defined in clause (i) of this
definition.
"FUNDS FROM OPERATIONS" means, for any fiscal period of the Borrower,
on a combined basis for the Borrower, the Management Company and their
Subsidiaries, the Borrower's Net Income PLUS depreciation and amortization
expenses for such period.
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" or "GAAP" means generally
accepted accounting principles in effect from time to time in the United States,
consistently applied as regards any specific fiscal period.
"GOVERNMENTAL AUTHORITY" shall mean any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"GUARANTEED PENSION PLAN" means any pension plan maintained by the
Borrower or any ERISA Affiliate of the Borrower, or to which the Borrower or any
ERISA Affiliate contributes, some or all of the benefits under which are
guaranteed by the Pension Benefit Guaranty Corporation within the U.S.
Department of Labor.
"HAZARDOUS SUBSTANCES" means (i) any hazardous wastes and/or toxic
chemicals, materials, substances or wastes as defined by or for the purposes of
any of the Environmental Laws; (ii) any "oil", as defined by the Clean Water
Act, as amended from time to time, and regulations promulgated thereunder
(including crude oil or any fraction thereof and any petroleum products or
derivatives thereof); (iii) any substance, the presence of which is prohibited,
regulated or controlled by any other applicable federal or state or local laws,
regulations, statutes or ordinances now in force or hereafter enacted relating
to waste disposal or environmental protection with respect to the exposure to,
or manufacture, possession, presence, use, generation, storage, transportation,
treatment, release, emission, discharge, disposal, abatement, cleanup, removal,
remediation or handling of any such substances; (iv) any asbestos or
asbestos-containing materials, polychlorinated biphenyls ("PCBS") in the form of
electrical equipment, fluorescent light fixtures with ballasts, cooling oils or
any other form, urea formaldehyde, atmospheric radon at levels over four
picocuries per cubic liter; (v) any solid, liquid, gaseous or thermal irritant
or contaminant, such as smoke, vapor, soot, fumes, alkalis, acids, chemicals,
pesticides, herbicides, sewage, industrial sludge or other similar wastes; (iv)
industrial, nuclear or medical by-products; and (vii) any underground storage
tank(s).
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"HEDGE AGREEMENT" shall mean any swap, cap, collar, forward purchase or
other similar agreement or arrangement designed to protect against fluctuations
in interest rates or currency exchange rates, and all amendments, extensions,
renewals and modifications thereof and any agreements in replacement thereof or
in substitution therefor.
"INDEBTEDNESS" means, in relation to any person, at any particular
time, all of the obligations of such person which, in accordance with GAAP,
would be classified as indebtedness upon a balance sheet (including any footnote
thereto) of such person prepared at such time, and in any event shall include,
without limitation:
(i) all indebtedness of such person arising or incurred
under or in respect of (A) any guaranties (whether direct or indirect)
by such person of the indebtedness, obligations or liabilities of any
other person, or (B) any endorsement by such person of any of the
indebtedness, obligations or liabilities of any other person (otherwise
than as an endorser of negotiable instruments received in the ordinary
course of business and presented to commercial banks for collection of
deposit), or (C) the discount by such person, with recourse to such
person, of any of the indebtedness, obligations or liabilities of any
other person;
(ii) all indebtedness of such person arising or incurred
under or in respect of any agreement, contingent or otherwise made by
such person (A) to purchase any indebtedness of any other person or to
advance or supply funds for the payment or purchase of any indebtedness
of any other person or (B) to purchase, sell or lease (as lessee or
lessor) any property, products, materials or supplies or to purchase or
sell transportation or services, primarily for the purpose of enabling
any other person to make payment of any indebtedness of such other
person or to assure the owner or holder of such other person's
indebtedness against loss, regardless of the delivery or non-delivery
of the property, products, materials or supplies or the furnishing or
non-furnishing of the transportation or services, or (C) to make any
loan, advance, capital contribution or other investment in any other
person for the purpose of assuring a minimum equity, asset base,
working capital or other balance sheet condition for or as at any date,
or to provide funds for the payment of any liability, dividend or stock
liquidation payment, or otherwise to supply funds to or in any manner
invest in any other person;
(iii) all indebtedness, obligations and liabilities secured by
or arising under or in respect of any Lien, upon or in Property owned
by such person, even though such person has not assumed or become
liable for the payment of such indebtedness, obligations and
liabilities;
(iv) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to
Property acquired by such person, even though the rights and remedies
of the seller or lender (or lessor) under such agreement in the event
of default are limited to repossession or sale of such Property; and
(v) all indebtedness arising or incurred under or in respect
of any Contingent Obligation.
"INDEBTEDNESS FOR BORROWED MONEY" means at any particular time, all
Indebtedness (i) in respect of any money borrowed (including pursuant to this
Agreement); (ii) under or in respect of any Contingent Obligation (whether
direct or indirect) of any money borrowed; (iii) evidenced by any loan or credit
agreement, promissory note, debenture, bond, guaranty or other similar written
obligation to pay money; or (iv) arising under leases which, in accordance with
GAAP, should be reflected as indebtedness on a balance sheet.
"INTEREST PERIOD" with respect to any Loan shall mean the interest
period applicable thereto, as determined pursuant to section 1.9.
"INVESTMENT" means any investment in any other person by stock
purchase, capital contribution, loan, advance, guaranty of any Indebtedness or
creation or assumption of any other liability in respect of any Indebtedness of
such person (including, without limitation, any liability of any kind described
in clause (i) or (ii) of the definition of the term "Indebtedness" set forth in
this section), or the transfer or sale of Property (otherwise than in the
ordinary course of the business) to any other person for less than payment in
full in cash of the transfer or sale price or the fair value thereof (whichever
of such price or value is higher).
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"LEASE ASSIGNMENTS" mean, collectively, the Assignments of Rents and
Leases now or hereafter executed and delivered by the Borrower and the
Management Company to the Administrative Agent pursuant to the Original Credit
Agreement or this Agreement, substantially in the form of Exhibits E-7 through
E-11 hereto. The Lease Assignments include the amendments to previously executed
Lease Assignments substantially in the form of Exhibits E-1 through E-6 hereto.
"LEGAL REQUIREMENTS" means all applicable laws, rules, regulations,
ordinances, judgments, orders, decrees, injunctions, arbitral awards, permits,
licenses, authorizations, directions and requirements of all governments,
departments, commissions, boards, courts, authorities, agencies, and officials
and officers thereof, that are in effect now or at any time in the future.
"LENDER" shall have the meaning provided in the first paragraph of this
Agreement.
"LENDER DEFAULT" shall mean (i) the refusal (which has not been
retracted) of a Lender, in violation of the requirements of this Agreement, to
make available its portion of any incurrence of Loans or to fund its portion of
any unreimbursed payment under section 2.4(c) or (ii) a Lender having notified
the Administrative Agent and/or the Borrower that it does not intend to comply
with the obligations under section 1.1 and/or section 2.4(c), in the case of
either (i) or (ii) as a result of the appointment of a receiver or conservator
with respect to such Lender, at the direction or request of any regulatory
agency or authority.
"LETTER OF CREDIT" shall have the meaning provided in section 2.1(a).
"LETTER OF CREDIT FEE" shall have the meaning provided in section
3.1(b).
"LETTER OF CREDIT ISSUER" shall mean (i) NCB and/or (ii) such other
Lender that is requested, and agrees, to so act by the Borrower and is
acceptable to the Administrative Agent; PROVIDED, that without the approval of
the Administrative Agent, no Lender other than the Administrative Agent shall be
a Letter of Credit Issuer.
"LETTER OF CREDIT OUTSTANDINGS" shall mean, at anytime, the sum,
without duplication, of (i) the aggregate Stated Amount of all outstanding
Letters of Credit and (ii) the aggregate amount of all Unpaid Drawings.
"LETTER OF CREDIT REQUEST" shall have the meaning provided in section
2.2(a).
"LICENSES AND PERMITS" means all licenses, permits, registrations and
recordings thereof and all applications for such licenses, permits and
registrations now owned or hereafter acquired by the Borrower and required or
necessary for the business operations of the Borrower.
"LIEN" means any lien, mortgage, pledge, security interest, charge or
other encumbrance of any kind, including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to give
any security interest.
"LOAN" shall have the meaning provided in section 1.1. Loans may be
Base Rate Loans or Eurodollar Loans.
"LOAN DOCUMENTS" mean this Agreement, the Notes, the Lease Assignments,
the Mortgages, the Environmental Indemnity Agreement, any Designated Hedge
Agreement and any other agreement, instrument, certificate or document now or
hereafter executed in connection with or pursuant to this Agreement.
"MARATHON TRANSACTION" shall mean collectively (i) the Borrower's
acquisition in 1996 of a minority interest in a joint venture formed to acquire
nine regional shopping malls from Marathon U. S. Realties, Inc., and (ii) the
Borrower's acquisition in September 1997 of the entire remaining equity
interests in such joint venture.
"MARGIN STOCK" shall have the meaning provided in Regulation U.
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"MARKET CONSTANT" means the factor, determined by the Administrative
Agent from time to time on not less than 30 days' prior written notice to the
Borrower and the Lenders, by reference to a standard level constant payment
table for a fully amortizing loan with a maturity of at least 20 years' (but not
more than 25 years') duration, for use in calculating the Borrowing Base with
reference to Eligible Real Estate. In determining any Market Constant for any
Mortgaged Property or any changes therein (i) the Administrative Agent shall
make such determinations (other than the initial determinations set forth on
Annex III) only pursuant to instructions from, or with the consent of, the
Required Lenders, and (ii) no Market Constant shall ever be less than 8% nor
greater than 12%. The initial Market Constant factors for the respective
Mortgaged Properties comprising the Eligible Real Estate as of the date hereof
are set forth on Annex III. Market Constant factors for the respective Mortgaged
Properties comprising Eligible Real Estate may be redetermined as of May 1 and
as of November 1 of each subsequent full or partial calendar year during the
pendency of this Agreement.
"MATURITY DATE" means the second anniversary of the Closing Date,
unless extended as provided in section 3.4, or sooner terminated as herein
provided.
"MINIMUM BORROWING AMOUNT" shall mean (i) for Base Rate Loans,
$500,000, with minimum increments thereafter of $100,000 and (ii) for Eurodollar
Loans, $5,000,000, with minimum increments thereafter of $1,000,000.
"MOODY'S" shall mean Xxxxx'x Investors Service, Inc. and its
successors.
"MORTGAGE" means (i) each of the Mortgages delivered pursuant to the
Original Credit Agreement; (ii) each of the mortgages, deeds of trust, deeds to
secure debt and other similar instruments in the form of Exhibit D-7 through
D-11 hereto, dated as of a date on or before the date hereof or such later date
as the property subject thereto becomes a Mortgaged Property and part of the
Collateral, granted by the Borrower and the Management Company to the
Administrative Agent or to a trustee selected by the Administrative Agent, as
security for the Obligations; and (iii) any other mortgages, deed of trust,
deeds to secure debt and other similar instruments which may hereafter be
granted to the Administrative Agent, or to a trustee selected by the
Administrative Agent, to secure the Obligations, in each case together with the
amendments the forms of which are attached as Exhibits D-1 through D-6 hereto
and any and all other amendments, modifications or supplements thereto.
"MORTGAGED PROPERTIES" means those properties which are now or
hereafter encumbered by Mortgages, but only during the period in which such
properties are so encumbered. The Mortgaged Properties which exist as of the
date of this Agreement are identified on Annex III.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in Section
4001(a) (3) of ERISA which is maintained for employees of the Borrower, or any
ERISA Affiliate of the Borrower.
"NCB" means National City Bank, a national banking association, and its
successors and assigns.
"NET INCOME" or the "BORROWER'S NET INCOME" means the net income of the
Borrower, the Management Company and their Subsidiaries, as computed on a
combined basis in accordance with GAAP, as reported in the Borrower's most
recent combined financial statements included in the report on Form 10-Q or
10-K, as filed with the SEC; PROVIDED that there shall be excluded from such net
income (i) all items of gain or loss which are properly classified as
extraordinary in accordance with GAAP; and (ii) all earnings attributable to
minority interests accounted for by the equity method of accounting, except to
the extent such earnings are actually distributed to the Borrower, the
Management Company and their Subsidiaries.
"NON-DEFAULTING LENDER" shall mean each Lender other than a Defaulting
Lender.
"NON-RECOURSE DEBT" shall have the meaning provided in section
8.5(a)(iv).
"NOTE" shall have the meaning provided in section 1.5(a).
"NOTICE OF BORROWING" shall have the meaning provided in section
1.3(a).
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"NOTICE OF CONVERSION" shall have the meaning provided in section 1.6.
"NOTICE OFFICE" shall mean the office of the Administrative Agent at
National City Center, 0000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000, or such
other office as the Administrative Agent may designate to the Borrower from time
to time.
"OBLIGATIONS" shall mean all amounts, direct or indirect, contingent or
absolute, of every type or description, and at any time existing, owing to the
Administrative Agent or any Lender pursuant to the terms of this Agreement or
any other Loan Document.
"PARTICIPANT" shall have the meaning provided in section 2.4(a).
"PAYMENT OFFICE" shall mean the office of the Administrative Agent at
National City Center, 0000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000, or such
other office as the Administrative Agent may designate to the Borrower from time
to time.
"PERCENTAGE" shall mean, at any time for each Lender with a Commitment,
the percentage obtained by dividing such Lender's Commitment by the Total
Commitment, PROVIDED that if the Total Commitment has been terminated, the
Percentage of each Lender shall be determined by dividing such Lender's
Commitment immediately prior to such termination by the Total Commitment
immediately prior to such termination.
"PERMITTED ENCUMBRANCES" means those encumbrances affecting any
Mortgaged Property which are permitted by the Mortgage pertaining thereto.
"PERSON" shall mean any individual, partnership, joint venture, firm,
corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.
"PROPERTY" means all types of real, personal, tangible, intangible or
mixed property.
"PROPERTY NOI" means, as to each Mortgaged Property included within the
Eligible Real Estate, the income produced by the operation of such Mortgaged
Property for the most recent period of four consecutive fiscal quarters (whether
or not in the same fiscal year) for which financial information is available,
LESS normal operating expenses for such Mortgaged Property for such period. For
the purposes of calculating Property NOI, amortization, depreciation and capital
expenditures for property improvements or tenant alterations for any Mortgaged
Property shall not be considered to be "normal operating expenses" in respect of
such Mortgaged Property.
"REGULATION D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing reserve requirements.
"REGULATION U" shall mean Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing margin requirements.
"REIT" means a qualified real estate investment trust, as defined in
the Code.
"REPORTABLE EVENT" shall mean an event described in section 4043(c) of
ERISA with respect to a Plan other than those events as to which the 30-day
notice period is waived under subsection .13, .14, .16, .18, .19 or .20 of PBGC
Regulation section 2615.
"REQUIRED 80% LENDERS" shall mean Non-Defaulting Lenders whose
outstanding Loans and Unutilized Commitments constitute more than 80% of the sum
of the total outstanding Loans and Unutilized Commitments of Non-Defaulting
Lenders.
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"REQUIRED LENDERS" shall mean Non-Defaulting Lenders whose outstanding
Loans and Unutilized Commitments constitute at least 66+2/3% of the sum of the
total outstanding Loans and Unutilized Commitments of Non-Defaulting Lenders.
"S&P" shall mean Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc., and its successors.
"SEC" shall mean the United States Securities and Exchange Commission
or any successor agency.
"SEC REGULATION D" shall mean Regulation D as promulgated under the
Securities Act of 1933, as amended, as the same may be in effect from time to
time.
"SECTION 4.4(B)(II) CERTIFICATE" shall have the meaning provided in
section 4.4(b)(ii).
"SECURITIES" means any stock, shares, voting trust certificates,
certificates of beneficial interest bonds, debentures, notes, or other evidences
of indebtedness, secured or unsecured, convertible, subordinated or otherwise,
or in general any instruments commonly known as "securities" or any certificates
of interest, shares or participation in temporary or interim certificates for
the purchase or acquisition of, or any right to subscribe to, purchase or
acquire, any of the foregoing.
"SECURITY DOCUMENTS" shall mean, collectively, any Lease Assignments,
any Mortgages, the Environmental Indemnity Agreement, and each other agreement,
assignment or instrument creating or purporting to create a Lien or establish or
create any rights in favor of the Administrative Agent as security for the
Obligations.
"STATED AMOUNT" of each Letter of Credit shall mean the maximum
available to be drawn thereunder (regardless of whether any conditions or other
requirements for drawing could then be met).
"SUBSIDIARY" of any person shall mean and include (i) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such person directly or
indirectly through Subsidiaries and (ii) any partnership, association, joint
venture or other entity in which such person directly or indirectly through
Subsidiaries, has more than a 50% equity interest at the time. Unless otherwise
expressly provided, all references herein to "Subsidiary" shall mean a
Subsidiary of the Borrower.
"SUBSIDIARY GUARANTY" shall have the meaning provided in section
7.20(a).
"SUBORDINATED INDEBTEDNESS" means Indebtedness which has been
subordinated to the prior payment in full of the Obligations pursuant to
subordination provisions satisfactory in form and substance to the Required
Lenders.
"TAXES" shall have the meaning provided in section 4.4.
"TOTAL COMMITMENT" shall mean the sum of the Commitments of the
Lenders.
"TOTAL LIABILITIES" means, on a combined basis, all indebtedness,
obligations and other liabilities of the Borrower, the Management Company and
their Subsidiaries, whether matured or unmatured, liquidated or unliquidated,
direct or indirect, absolute or contingent, joint or several, secured or
unsecured, arising by contract, operation of law or otherwise, which are
classified as liabilities in accordance with GAAP on a combined balance sheet of
the Borrower, the Management Company and their Subsidiaries. Notwithstanding the
foregoing, any deferred obligations, deferred capital gains and other deferred
income shall be excluded from Total Liabilities.
"TYPE" shall mean any type of Loan determined with respect to the
interest option applicable thereto, I.E., a Base Rate Loan or Eurodollar Loan.
"UNPAID DRAWING" shall have the meaning provided in section 2.3(a).
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"UNUTILIZED COMMITMENT" for any Lender at any time shall mean the
excess of (i) such Lender's Commitment at such time over (ii) the sum of (x) the
principal amount of Loans made by such Lender and outstanding at such time and
(y) such Lender's Percentage of Letter of Credit Outstandings at such time.
"UNUTILIZED TOTAL COMMITMENT" shall mean, at any time, the excess of
(i) the Total Commitment at such time over (ii) the sum of (x) the aggregate
principal amount of all Loans then outstanding plus (y) the aggregate Letter of
Credit Outstandings at such time.
"WHOLLY-OWNED SUBSIDIARY" shall mean each Subsidiary of the Borrower
all of whose capital stock, equity interests and partnership interests are owned
directly or indirectly by the Borrower, its officers, stockholders and
affiliates but excluding any Subsidiary primarily engaged in the business of
issuing insurance and/or insurance policies.
"WRITTEN", "written" or "IN WRITING" shall mean any form of written
communication or a communication by means of telex, facsimile transmission,
telegraph or cable.
10.2. ACCOUNTING TERMS. Except as otherwise specifically provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; PROVIDED that, if the
Borrower notifies the Administrative Agent that the Borrower requests an
amendment to any provision hereof to eliminate the effect of any change
occurring after the Effective Date in GAAP or in the application thereof to such
provision (or if the Administrative Agent notifies the Borrower that the
Required Lenders request an amendment to any provision hereof for such
purposes), regardless of whether any such notice is given before or after such
change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance with the requirements of this
Agreement.
10.3. TERMS GENERALLY. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise, (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any person shall be construed to include such person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to sections, Annexes
and Exhibits shall be construed to refer to sections of, and Annexes and
Exhibits to, this Agreement, and (e) the words "asset" and "property" shall be
construed to have the same meaning and effect and to refer to any and all real
property, tangible and intangible assets and properties, including cash,
securities, accounts and contract rights, and interests in any of the foregoing.
10.4. CERTAIN FINANCIAL REFERENCES. All references herein to financial
position, assets, liabilities, indebtedness, results of operations, stockholders
equity and other financial items which are to be determined for the Borrower and
its Subsidiaries and the Management Company on a combined basis shall be
determined for the Borrower, the Management Company and their respective
Subsidiaries on a combined basis in accordance with GAAP.
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SECTION 11. THE ADMINISTRATIVE AGENT.
11.1. APPOINTMENT. Each Lender hereby irrevocably designates and
appoints NCB as Administrative Agent to act as specified herein and in the other
Loan Documents, and each such Lender hereby irrevocably authorizes NCB as the
Administrative Agent for such Lender, to take such action on its behalf under
the provisions of this Agreement and the other Loan Documents and to exercise
such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
The Administrative Agent agrees to act as such upon the express conditions
contained in this section 11. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Administrative Agent shall not have any duties
or responsibilities, except those expressly set forth herein or in the other
Loan Documents, nor any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or otherwise exist against the Administrative Agent.
The provisions of this section 11 are solely for the benefit of the
Administrative Agent, and the Lenders, and no Credit Party shall have any rights
as a third party beneficiary of any of the provisions hereof. In performing its
functions and duties under this Agreement, the Administrative Agent shall act
solely as agent of the Lenders and does not assume and shall not be deemed to
have assumed any obligation or relationship of agency or trust with or for any
Credit Party.
11.2. DELEGATION OF DUTIES. The Administrative Agent may execute any of
its duties under this Agreement or any other Loan Document by or through agents
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Administrative Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care except to the extent otherwise required by
section 11.3.
11.3. EXCULPATORY PROVISIONS. Neither the Administrative Agent nor any
of its respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such person under or in connection with this Agreement (except
for its or such person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by the Borrower or any other Credit Party or
any of their respective officers contained in this Agreement, any other Loan
Document or in any certificate, report, statement or other document referred to
or provided for in, or received by the Administrative Agent under or in
connection with, this Agreement or any other Loan Document or for any failure of
the Borrower or any other Credit Party or any of their respective officers to
perform its obligations hereunder or thereunder. The Administrative Agent shall
not be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement, or to inspect the properties, books or records of the
Borrower or any other Credit Party. The Administrative Agent shall not be
responsible to any Lender for the effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any Loan
Document or for any representations, warranties, recitals or statements made
herein or therein or made in any written or oral statement or in any financial
or other statements, instruments, reports, certificates or any other documents
in connection herewith or therewith furnished or made by the Administrative
Agent to the Lenders or by or on behalf of the Borrower or any other Credit
Party to the Administrative Agent or any Lender or be required to ascertain or
inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained herein or therein or as to the use
of the proceeds of the Loans or of the existence or possible existence of any
Default or Event of Default.
11.4. RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent shall
be entitled to rely, and shall be fully protected in relying, upon any note,
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, facsimile transmission, telex or teletype message, statement, order or
other document or conversation believed by it, in good faith, to be genuine and
correct and to have been signed, sent or made by the proper person or persons
and upon advice and statements of legal counsel (including, without limitation,
counsel to the Borrower or any other Credit Party), independent accountants and
other experts selected by the Administrative Agent. The Administrative Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such advice
or concurrence of the Required Lenders as it deems appropriate or it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Administrative Agent shall in all cases be fully
protected
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in acting, or in refraining from acting, under this Agreement and the other Loan
Documents in accordance with a request of the Required Lenders, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders.
11.5. NOTICE OF DEFAULT. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Lender or
the Borrower or any other Credit Party referring to this Agreement, describing
such Default or Event of Default and stating that such notice is a "notice of
default." In the event that the Administrative Agent receives such a notice, the
Administrative Agent shall give prompt notice thereof to the Lenders. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders,
PROVIDED that unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the
Lenders.
11.6. NON-RELIANCE. Each Lender expressly acknowledges that neither the
Administrative Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates have made any representations or warranties to
it and that no act by the Administrative Agent hereinafter taken, including any
review of the affairs of the Borrower or other Credit Party, shall be deemed to
constitute any representation or warranty by the Administrative Agent to any
Lender. Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative Agent, or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
assets, operations, property, financial and other conditions, prospects and
creditworthiness of the Borrower and the other Credit Parties and made its own
decision to make its Loans hereunder and enter into this Agreement. Each Lender
also represents that it will, independently and without reliance upon the
Administrative Agent, or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement, and to make such investigation as it deems necessary to inform
itself as to the business, assets, operations, property, financial and other
conditions, prospects and creditworthiness of the Borrower and the other Credit
Parties. The Administrative Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the business,
operations, assets, property, financial and other conditions, prospects or
creditworthiness of the Borrower or any other Credit Party which may come into
the possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates.
11.7. INDEMNIFICATION. The Lenders agree to indemnify the
Administrative Agent in its capacity as such ratably according to their
respective Loans and unutilized Commitments, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, reasonable expenses or disbursements of any kind whatsoever which may at
any time (including, without limitation, at any time following the payment of
the Obligations) be imposed on, incurred by or asserted against the
Administrative Agent in its capacity as such in any way relating to or arising
out of this Agreement or any other Loan Document, or any documents contemplated
by or referred to herein or the transactions contemplated hereby or any action
taken or omitted to be taken by the Administrative Agent under or in connection
with any of the foregoing, but only to the extent that any of the foregoing is
not paid by the Borrower or another Credit Party, PROVIDED that no Lender shall
be liable to the Administrative Agent for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements to the extent resulting solely from the
Administrative Agent's gross negligence or willful misconduct. If any indemnity
furnished to the Administrative Agent for any purpose shall, in the opinion of
the Administrative Agent, be insufficient or become impaired, the Administrative
Agent may call for additional indemnity and cease, or not commence, to do the
acts indemnified against until such additional indemnity is furnished. The
agreements in this section 11.7 shall survive the payment of all Obligations.
11.8. THE ADMINISTRATIVE AGENT IN INDIVIDUAL CAPACITY. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower, the other Credit
Parties and their Affiliates as though not acting as Administrative Agent
hereunder. With respect to the Loans made by it and all Obligations owing to it,
the Administrative Agent shall have the same rights and powers under this
Agreement as any Lender and may exercise the same as though it were not the
Administrative Agent, and the terms "Lender" and "Lenders" shall include the
Administrative Agent in its individual capacity.
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11.9. SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign as the Administrative Agent upon 20 days' notice to the Lenders and the
Borrower. The Required Lenders, upon not less than 20 days' prior written notice
to the Administrative Agent and the Borrower, may remove the Administrative
Agent. In connection with any such retirement or removal the Required Lenders
shall appoint from among the Lenders a successor Administrative Agent for the
Lenders subject to prior approval by the Borrower (such approval not to be
unreasonably withheld or delayed), whereupon such successor agent shall succeed
to the rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall include such successor agent effective upon its
appointment, and the resigning or removed Administrative Agent's rights, powers
and duties as the Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement. After the retiring Administrative Agent's
resignation or removal hereunder as the Administrative Agent, the provisions of
this section 11 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Administrative Agent under this Agreement.
11.10. OTHER AGENTS. Any Lender identified herein as a Documentation
Agent, Managing Agent, CoAgent, Syndication Agent or any other corresponding
title, other than "Administrative Agent", shall have no right, power,
obligation, liability, responsibility or duty under this Agreement or any other
Loan Document except those applicable to all Lenders as such. Each Lender
acknowledges that it has not relied, and will not rely, on any Lender so
identified in deciding to enter into this Agreement or in taking or not taking
any action hereunder.
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SECTION 12. MISCELLANEOUS.
12.1. PAYMENT OF EXPENSES ETC. The Borrower agrees to: (i) whether or
not the transactions herein contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses of the Administrative Agent in connection with
the negotiation, preparation, execution and delivery of the Loan Documents and
the documents and instruments referred to therein and any amendment, waiver or
consent relating thereto (including, without limitation, the reasonable fees and
disbursements of Xxxxx, Day, Xxxxxx & Xxxxx, in connection with the preparation
of the Loan Documents and the consummation of the transactions contemplated
hereby, and of the Administrative Agent and each of the Lenders in connection
with the enforcement of the Loan Documents and the documents and instruments
referred to therein (including, without limitation, the reasonable fees and
disbursements of counsel for the Administrative Agent and for each of the
Lenders); (ii) in the event (x) that any of the Mortgages are foreclosed in
whole or in part or that any of the Mortgages are put into the hands of an
attorney for collection, suit, action or foreclosure, (y) of the foreclosure of
any mortgage prior to or subsequent to any of the Mortgages in which proceeding
the Administrative Agent is made a party, or (z) of the bankruptcy, insolvency,
rehabilitation or other similar proceeding in respect of the Borrower or any of
its Subsidiaries, pay all costs of collection and defense, including reasonable
attorneys' fees in connection therewith and in connection with any appellate
proceeding or postjudgment action involved therein, which shall be due and
payable together with all required service or use taxes; (iii) pay and hold the
Administrative Agent and each of the Lenders harmless from and against any and
all present and future stamp and other similar taxes with respect to the
foregoing matters and save each of the Lenders harmless from and against any and
all liabilities with respect to or resulting from any delay or omission (other
than to the extent attributable to such Lender) to pay such taxes; and (iv)
indemnify each Lender and the Administrative Agent, its officers, directors,
employees, representatives and agents (collectively, "INDEMNITEES") from and
hold each of them harmless against any and all losses, liabilities, claims,
damages or expenses incurred by any of them as a result of, or arising out of,
or in any way related to, or by reason of (a) any Environmental Claims, as
provided in the Environmental Indemnity Agreement, (b) any investigation,
litigation or other proceeding (whether or not the Administrative Agent or any
Lender is a party thereto) related to the entering into and/or performance of
any Loan Document or the use of the proceeds of any Loans hereunder or the
consummation of any transactions contemplated in any Loan Document, including,
in each case, without limitation, the reasonable fees and disbursements of
counsel incurred in connection with any such investigation, litigation or other
proceeding (but excluding any such losses, liabilities, claims, damages or
expenses to the extent incurred by reason of the gross negligence or willful
misconduct of the person to be indemnified or of any other Indemnitee who is
such person or an Affiliate of such person). To the extent that the undertaking
to indemnify, pay or hold harmless any person set forth in the preceding
sentence may be unenforceable because it is violative of any law or public
policy, the Borrower shall make the maximum contribution to the payment and
satisfaction of each of the indemnified liabilities which is permissible under
applicable law.
12.2. RIGHT OF SETOFF. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence of an Event of Default, each Lender is hereby
authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to the Borrower or to any other person, any
such notice being hereby expressly waived, to set off and to appropriate and
apply any and all deposits (general or special) and any other Indebtedness at
any time held or owing by such Lender (including, without limitation, by
branches and agencies of such Lender wherever located) to or for the credit or
the account of the Borrower against and on account of the Obligations and
liabilities of the Borrower to such Lender under this Agreement or under any of
the other Loan Documents, including, without limitation, all interests in
Obligations the Borrower purchased by such Lender pursuant to section 12.4(b),
and all other claims of any nature or description arising out of or connected
with this Agreement or any other Loan Document, irrespective of whether or not
such Lender shall have made any demand hereunder and although said Obligations,
liabilities or claims, or any of them, shall be contingent or unmatured.
12.3. NOTICES. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, facsimile transmission or cable communication)
and mailed, telegraphed, telexed, transmitted, cabled or delivered, if to the
Borrower, at Xxxxx 0000, 00 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000, attention:
Chief Financial Officer (facsimile: (000) 000-0000); if to any Lender at its
address specified for such Lender on Annex I hereto; if to the Administrative
Agent, at its Notice Office; or, at such other address as shall be designated by
any party in a written notice to the other parties hereto. All such notices and
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communications shall be mailed, telegraphed, telexed, telecopied, or cabled or
sent by overnight courier, and shall be effective when received.
12.4. BENEFIT OF AGREEMENT. (a) This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto, PROVIDED that no Credit Party may assign or
transfer any of its rights or obligations hereunder without the prior written
consent of all the Lenders, and PROVIDED, FURTHER, that any assignment by a
Lender of any of its rights or obligations hereunder shall be made in accordance
with section 12.4(b) hereof. Notwithstanding the foregoing, each Lender may at
any time grant participations in any of its rights hereunder or under any of the
Notes to another financial institution, PROVIDED that in the case of any such
participation, (i) the participant shall not have any rights under this
Agreement or any of the other Loan Documents, including rights of consent,
approval or waiver (the participant's rights against such Lender in respect of
such participation to be those set forth in the agreement executed by such
Lender in favor of the participant relating thereto), (ii) such Lender's
obligations under this Agreement (including, without limitation, its Commitment
hereunder) shall remain unchanged, (iii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iv) such Lender shall remain the holder of any Note for all purposes of this
Agreement and (v) the Borrower, the Administrative Agent, and the other Lenders
shall continue to deal solely and directly with the selling Lender in connection
with such Lender's rights and obligations under this Agreement, and all amounts
payable by the Borrower hereunder shall be determined as if such Lender had not
sold such participation, except that the participant shall be entitled to the
benefits of sections 1.10, 1.11 and 4.4 of this Agreement to the extent that
such Lender would be entitled to such benefits if the participation had not been
entered into or sold, and, PROVIDED FURTHER, that no Lender shall transfer,
grant or sell any participation under which the participant shall have rights to
approve any amendment to or waiver of this Agreement or any other Loan Document
except to the extent such amendment or waiver would (x) extend the final
scheduled maturity of the Loans in which such participant is participating (it
being understood that any waiver of the making of, or the application of, any
prepayment of the principal of the Loans shall not constitute an extension of
the final maturity date thereof), or reduce the rate or extend the time of
payment of interest or Fees thereon (except in connection with a waiver of the
applicability of any post-default increase in interest rates), or reduce the
principal amount thereof, or increase such participant's participating interest
in any Commitment over the amount thereof then in effect (it being understood
that a waiver of any Default or Event of Default or of any mandatory prepayment
or a mandatory reduction in the Total Commitment, or a mandatory prepayment,
shall not constitute an increase in any participating interest in any
Commitment), (y) release all or any substantial portion of the Collateral (in
each case except as expressly provided in the Loan Documents) or (z) consent to
the assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement.
(b) Notwithstanding the foregoing, (x) any Lender may assign all or a
fixed portion of its Loans and/or Commitment, and its rights and obligations
hereunder, to an Affiliate of such Lender or to another Lender that is not a
Defaulting Lender, and (y) any Lender may assign all, or if less than all, a
fixed portion equal to at least $5,000,000 in the aggregate for the assigning
Lender or assigning Lenders, of its Loans and/or Commitment, and its rights and
obligations hereunder, to one or more Eligible Transferees, each of which
assignees shall become a party to this Agreement as a Lender by execution of an
Assignment Agreement, PROVIDED that, (i) in the case of any assignment of a
portion of the Loans and/or Commitment of a Lender, such Lender shall retain a
minimum fixed portion thereof equal to at least $5,000,000, (ii) at such time
Annex I shall be deemed modified to reflect the Commitment of such new Lender
and of the existing Lenders, (iii) upon surrender of the old Notes, new Notes
will be issued, at the Borrower's expense for the cost of preparation thereof,
to such new Lender and to the assigning Lender, such new Notes to be in
conformity with the requirements of section 1.5 (with appropriate modifications)
to the extent needed to reflect the revised Commitments, (iv) in the case of
clause (y) only, the consent of the Administrative Agent (which shall not be
unreasonably withheld or delayed) shall be required in connection with any such
assignment, and (v) the Administrative Agent shall receive at the time of each
such assignment, from the assigning or assignee Lender, the payment of a
non-refundable assignment fee of $3,000 and, PROVIDED FURTHER, that such
transfer or assignment will not be effective until notice thereof is given to
the Borrower and such transfer or assignment is recorded by the Administrative
Agent on the Lender Register (as hereinafter defined in section 12.16)
maintained by it. To the extent of any assignment pursuant to this section
12.4(b) the assigning Lender shall be relieved of its obligations hereunder with
respect to its assigned Commitment. At the time of each assignment pursuant to
this section 12.4(b) to a person which is not already a Lender hereunder and
which is not a United States person (as such term is defined in section
7701(a)(30) of the Code) for Federal income tax purposes, the respective
assignee Lender shall provide to the Borrower and the Administrative Agent
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the appropriate Internal Revenue Service Forms (and, if applicable a section
4.04(b)(ii) Certificate) described in section 4.4(b). To the extent that an
assignment of all or any portion of a Lender's Commitment and related
outstanding Obligations pursuant to this section 12.4(b) would, at the time of
such assignment, result in increased costs under section 1.10 from those (if
any) being charged by the respective assigning Lender prior to such assignment,
then the Borrower shall not be obligated to pay such increased costs (although
the Borrower shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
assignment). Nothing in this section 12.4 shall prevent or prohibit any Lender
from pledging its Notes or Loans to a Federal Reserve Bank in support of
borrowings made by such Lender from such Federal Reserve Bank.
(c) Notwithstanding any other provisions of this section 12.4, no
transfer or assignment of the interests or obligations of any Lender hereunder
or any grant of participation therein shall be permitted if such transfer,
assignment or grant would require the Borrower to file a registration statement
with the SEC or to qualify the Loans under the "Blue Sky" laws of any State.
(d) Each Lender initially party to this Agreement hereby represents,
and each person that became a Lender pursuant to an assignment permitted by this
section 12.4 will, upon its becoming party to this Agreement, represent that it
is a commercial lender, other financial institution or other "accredited"
investor (as defined in SEC Regulation D) which makes or acquires loans in the
ordinary course of its business and that it will make or acquire Loans for its
own account in the ordinary course of such business, PROVIDED that subject to
the preceding sections 12.4(a) and (b), the disposition of any promissory notes
or other evidences of or interests in Indebtedness held by such Lender shall at
all times be within its exclusive control.
12.5. NO WAIVER: REMEDIES CUMULATIVE. No failure or delay on the part
of the Administrative Agent or any Lender in exercising any right, power or
privilege hereunder or under any other Loan Document and no course of dealing
between the Borrower and the Administrative Agent or any Lender shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, power
or privilege hereunder or under any other Loan Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which the Administrative
Agent or any Lender would otherwise have. No notice to or demand on the Borrower
in any case shall entitle the Borrower to any other or further notice or demand
in similar or other circumstances or constitute a waiver of the rights of the
Administrative Agent or the Lenders to any other or further action in any
circumstances without notice or demand.
12.6. PAYMENTS PRO RATA. (a) The Administrative Agent agrees that
promptly after its receipt of each payment from or on behalf of the Borrower in
respect of any Obligations, it shall distribute such payment to the Lenders
(other than any Lender that has expressly waived its right to receive its PRO
RATA share thereof) PRO RATA based upon their respective shares, if any, of the
Obligations with respect to which such payment was received.
(b) Each of the Lenders agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Loan Documents, or otherwise)
which is applicable to the payment of the principal of, or interest on, the
Loans or Fees, of a sum which with respect to the related sum or sums received
by other Lenders is in a greater proportion than the total of such Obligation
then owed and due to such Lender bears to the total of such Obligation then owed
and due to all of the Lenders immediately prior to such receipt, then such
Lender receiving such excess payment shall purchase for cash without recourse or
warranty from the other Lenders an interest in the Obligations to such Lenders
in such amount as shall result in a proportional participation by all of the
Lenders in such amount, PROVIDED that if all or any portion of such excess
amount is thereafter recovered from such Lender, such purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest.
12.7. CALCULATIONS: COMPUTATIONS. (a) The financial statements to be
furnished to the Lenders pursuant hereto shall be made and prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by the Borrower to the Lenders); PROVIDED, that except as otherwise specifically
provided herein, all computations determining compliance with sections 4.2, 7.16
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and 8, including definitions used therein, shall utilize accounting principles
and policies in effect at the time of the preparation of, and in conformity with
those used to prepare, the December 31, 1996 financial statements delivered to
the Lenders pursuant to section 6.5.
(b) All computations of interest on Base Rate Loans hereunder shall be
made on the actual number of days elapsed over a year of 365 or 366 days, as
applicable, and all computations of interest on Eurodollar Loans and Fees
hereunder shall be made on the actual number of days elapsed over a year of 360
days.
12.8. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY
TRIAL. (a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF OHIO, EXCEPT THAT THE
PROVISIONS FOR THE CREATION, PERFECTION, AND ENFORCEMENT OF THE LIENS CREATED
PURSUANT TO THE MORTGAGES SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE
LAW OF THE STATE IN WHICH THE APPLICABLE REAL PROPERTY IS LOCATED, IT BEING
UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE
LAW OF THE STATE OF OHIO SHALL GOVERN THE VALIDITY AND ENFORCEABILITY OF ALL
LOAN DOCUMENTS, INCLUDING ALL MORTGAGES, AND ALL OF THE OBLIGATIONS ARISING
HEREUNDER OR THEREUNDER. TO THE FULLEST EXTENT PERMITTED BY LAW, THE BORROWER
HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW
OF ANY JURISDICTION OTHER THAN THE STATE OF OHIO GOVERNS THIS AGREEMENT OR ANY
OF THE OTHER LOAN DOCUMENTS, EXCEPT TO THE EXTENT AFORESAID WITH RESPECT TO THE
LIENS CREATED BY THE MORTGAGES. Any legal action or proceeding with respect to
this Agreement or any other Loan Document may be brought in the courts of the
State of Ohio or of the United States for the Northern District of Ohio, and, by
execution and delivery of this Agreement, the Borrower hereby irrevocably
accepts for itself and in respect of its Property, generally and
unconditionally, the jurisdiction of the aforesaid courts. The Borrower hereby
further irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to the Borrower at its
address for notices pursuant to section 12.3, such service to become effective
30 days after such mailing or at such earlier time as may be provided under
applicable law. Nothing herein shall affect the right of the Administrative
Agent or any Lender to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against the Borrower in any
other jurisdiction.
(b) The Borrower hereby irrevocably waives any objection which it may
now or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement or any other
Loan Document brought in the courts specifically referred to in section 12.8(a)
above and hereby further irrevocably waives and agrees not to plead or claim in
any such court that any such action or proceeding brought in any such court has
been brought in an inconvenient forum.
(c) Each of the parties to this Agreement hereby irrevocably waives all
right to a trial by jury in any action, proceeding or counterclaim arising out
of or relating to this Agreement, the other Loan Documents or the transactions
contemplated hereby or thereby.
(d) The following notice is included herein in accordance with Oregon
Revised Statutes Section 41.580:
NOTICE
"UNDER OREGON LAW, MOST AGREEMENTS, PROMISES, AND COMMITMENTS MADE BY LENDER
AFTER OCTOBER 3, 1989, CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE
NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE
BORROWER'S RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY
LENDER TO BE ENFORCEABLE."
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12.9. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same agreement. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.
12.10. EFFECTIVENESS. This Agreement shall become effective on the date
(the "EFFECTIVE DATE") on which the Borrower and each of the Lenders shall have
signed a copy hereof (whether the same or different copies) and shall have
delivered the same to the Administrative Agent at the Notice Office of the
Administrative Agent or, in the case of the Lenders, shall have given to the
Administrative Agent telephonic (confirmed in writing), written telex or
facsimile transmission notice (actually received) at such office that the same
has been signed and mailed to it.
12.11. HEADINGS DESCRIPTIVE. The headings of the several sections and
other portions of this Agreement are inserted for convenience only and shall not
in any way affect the meaning or construction of any provision of this
Agreement.
12.12. AMENDMENT OR WAIVER. Neither this Agreement nor any terms hereof
or thereof may be changed, waived, discharged or terminated UNLESS such change,
waiver, discharge or termination is in writing signed by the Borrower and the
Required Lenders, PROVIDED that no such change, waiver, discharge or termination
shall, without the consent of each Lender (other than a Defaulting Lender)
affected thereby, (i) extend the final maturity date applicable to a Loan or a
Commitment (it being understood that any waiver of the making of, or application
of, any prepayment of the principal of the Loans shall not constitute an
extension of such final maturity thereof), reduce the rate or extend the time of
payment of interest (other than as a result of waiving the applicability of any
post-default increase in interest rates) or Fees thereon, or reduce the
principal amount thereof, or increase the Commitment of any Lender over the
amount thereof then in effect (it being understood that a waiver of any Default
or Event of Default or of any mandatory prepayment or a mandatory reduction in
the Total Commitment shall not constitute an increase in the Commitment of any
Lender), (ii) release all or any substantial portion of the Collateral (in each
case except as expressly provided in the Loan Documents), (iii) change the
definition of the term "Change of Control", (iv) amend, modify or waive any
provision of this section 12.12, or section 11.7, 12.1, 12.4, 12.6 or 12.7(b),
(v) reduce the percentage specified in, or otherwise modify, the definition of
Required Lenders or Required 80% Lenders, or change any provision of this
Agreement to eliminate or otherwise reduce any explicit requirement that any
specified action or document be approved by or be satisfactory to all of the
Lenders, or (vi) consent to the assignment or transfer by the Borrower of any of
its rights and obligations under this Agreement. No provision of section 2 or 11
may be amended without the consent of (x) any Letter of Credit Issuer adversely
affected thereby or (y) the Administrative Agent, respectively.
12.13. SURVIVAL. All indemnities set forth herein including, without
limitation, in section 1.10, 1.11, 2.5, 4.4, 11.7 or 12.1 shall survive the
execution and delivery of this Agreement and the making and repayment of Loans.
12.14. DOMICILE OF LOANS. Each Lender may transfer and carry its Loans
at, to or for the account of any branch office, subsidiary or affiliate of such
Lender, PROVIDED that the Borrower shall not be responsible for costs arising
under section 1.10 or 4.4 resulting from any such transfer (other than a
transfer pursuant to section 1.12) to the extent not otherwise applicable to
such Lender prior to such transfer.
12.15. CONFIDENTIALITY. Subject to section 12.4, the Lenders shall hold
all non-public information obtained pursuant to the requirements of this
Agreement which has been identified as such by the Borrower in accordance with
its customary procedure for handling confidential information of this nature and
in accordance with safe and sound banking practices and in any event may make
disclosure reasonably required by any BONA FIDE transferee or participant in
connection with the contemplated transfer of any Loans or Commitment or
participation therein (PROVIDED that each such prospective transferee and/or
participant shall execute an agreement for the benefit of the Borrower with such
prospective transferor Lender containing provisions substantially identical to
those contained in this section 12.15), to its auditors, attorneys or as
required or requested by any governmental agency or representative thereof or
pursuant to legal process, PROVIDED that, unless specifically prohibited by
applicable law or court order, each Lender shall notify the Borrower of any
request by any governmental agency or representative thereof (other than any
such request in connection with an examination of the financial condition of
such Lender by such governmental agency) for disclosure of any such non-public
information prior to disclosure of such information, and PROVIDED FURTHER that
in no event shall
65
66
any Lender be obligated or required to return any materials furnished by or on
behalf of the Borrower or any other Credit Party. The Borrower hereby agrees
that the failure of a Lender to comply with the provisions of this section 12.15
shall not relieve the Borrower of any of the obligations to such Lender under
this Agreement and the other Loan Documents.
12.16. LENDER REGISTER. The Borrower hereby designates the
Administrative Agent to serve as its agent, solely for purposes of this section
12.16, to maintain a register (the "LENDER REGISTER") on which it will record
the Commitments from time to time of each of the Lenders, the Loans made by each
of the Lenders and each repayment in respect of the principal amount of the
Loans of each Lender. Failure to make any such recordation, or any error in such
recordation, shall not affect the Borrower's obligations in respect of such
Loans. With respect to any Lender, the transfer of the Commitments of such
Lender and the rights to the principal of, and interest on, any Loan made
pursuant to such Commitments shall not be effective until such transfer is
recorded on the Lender Register maintained by the Administrative Agent with
respect to ownership of such Commitments and Loans and prior to such recordation
all amounts owing to the transferor with respect to such Commitments and Loans
shall remain owing to the transferor. The registration of assignment or transfer
of all or part of any Commitments and Loans shall be recorded by the
Administrative Agent on the Lender Register only upon the acceptance by the
Administrative Agent of a properly executed and delivered Assignment Agreement
pursuant to section 12.4(b). The Borrower agrees to indemnify the Administrative
Agent from and against any and all losses, claims, damages and liabilities of
whatsoever nature which may be imposed on, asserted against or incurred by the
Administrative Agent in performing its duties under this section 12.16.
12.17. LIMITATIONS ON LIABILITY OF THE LETTER OF CREDIT ISSUERS. The
Borrower assumes all risks of the acts or omissions of any beneficiary or
transferee of any Letter of Credit with respect to its use of such Letters of
Credit. Neither any Letter of Credit Issuer nor any of its officers or directors
shall be liable or responsible for: (a) the use which may be made of any Letter
of Credit or any acts or omissions of any beneficiary or transferee in
connection therewith; (b) the validity, sufficiency or genuineness of documents,
or of any endorsement thereon, even if such documents should prove to be in any
or all respects invalid, insufficient, fraudulent or forged; (c) payment by a
Letter of Credit Issuer against presentation of documents that do not comply
with the terms of a Letter of Credit, including failure of any documents to bear
any reference or adequate reference to such Letter of Credit; or (d) any other
circumstances whatsoever in making or failing to make payment under any Letter
of Credit, EXCEPT that such Borrower shall have a claim against a Letter of
Credit Issuer, and a Letter of Credit Issuer shall be liable to the Borrower, to
the extent of any direct, but not consequential, damages suffered by the
Borrower which the Borrower proves were caused by (i) such Letter of Credit
Issuer's willful misconduct or gross negligence or (ii) such Letter of Credit
Issuer's willful failure to make lawful payment under any Letter of Credit after
the presentation to it of documentation strictly complying with the terms and
conditions of such Letter of Credit. In furtherance and not in limitation of the
foregoing, a Letter of Credit Issuer may accept documents that appear on their
face to be in order, without responsibility for further investigation.
12.18. GENERAL LIMITATION OF LIABILITY. No claim may be made by the
Borrower, any Lender, the Administrative Agent, any Letter of Credit Issuer or
any other person against the Administrative Agent, any Letter of Credit Issuer,
or any other Lender or the Affiliates, directors, officers, employees, attorneys
or agents of any of them for any special, consequential or punitive damages in
respect of any claim for breach of contract or any other theory of liability
arising out of or related to the transactions contemplated by this Agreement or
any of the other Loan Documents, or any act, omission or event occurring in
connection therewith; and each of the Borrower, each Lender, the Administrative
Agent and each Letter of Credit Issuer hereby waives, releases and agrees not to
xxx or counterclaim upon any such claim for any such damages, whether or not
accrued and whether or not known or suspected to exist in its favor.
12.19. NO DUTY. All attorneys, accountants, appraisers, consultants and
other professional persons (including the firms or other entities on behalf of
which any such person may act) retained by the Administrative Agent or any
Lender with respect to the transactions contemplated by the Loan Documents shall
have the right to act exclusively in the interest of the Administrative Agent or
such Lender, as the case may be, and shall have no duty of disclosure, duty of
loyalty, duty of care, or other duty or obligation of any type or nature
whatsoever to the Borrower, to any of the other Credit Parties, to any of their
Subsidiaries, or to any other person, with respect to any matters within the
scope of such representation or related to their activities in connection with
such representation.
66
67
12.20. LENDERS AND AGENT NOT FIDUCIARY TO CREDIT PARTIES, ETC. The
relationship among the Credit Parties and their Subsidiaries, on the one hand,
and the Administrative Agent, each Letter of Credit Issuer and the Lenders, on
the other hand, is solely that of debtor and creditor, and the Administrative
Agent, each Letter of Credit Issuer and the Lenders have no fiduciary or other
special relationship with the Credit Parties and their Subsidiaries, and no term
or provision of any Loan Document, no course of dealing, no written or oral
communication, or other action, shall be construed so as to deem such
relationship to be other than that of debtor and creditor.
12.21. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties herein shall survive the making of Loans and the issuance of
Letters of Credit hereunder, the execution and delivery of this Agreement and
the other documents the forms of which are attached as Exhibits hereto, the
issue and delivery of the Notes, any disposition thereof by any holder thereof,
and any investigation made by the Administrative Agent or any Lender or any
other holder of any of the Notes or on its behalf. All statements contained in
any certificate or other document delivered to the Administrative Agent or any
Lender or any holder of any Notes by or on behalf of the Borrower or any other
Credit Party pursuant hereto or otherwise specifically for use in connection
with the transactions contemplated hereby shall constitute representations and
warranties by the Borrower hereunder, made as of the respective dates specified
therein or, if no date is specified, as of the respective dates furnished to the
Administrative Agent or any Lender.
12.22. LIMITATION ON ENFORCEMENT OF SECURITY DOCUMENTS. The Lenders
agree that the Security Documents may be enforced by the action of the
Administrative Agent, in each case acting upon the instructions of the Required
Lenders and that no Lender shall have any right individually to seek to enforce
or to enforce any Security Document or to realize upon the security to be
granted by any Security Document, it being understood and agreed that such
rights and remedies may be exercised by the Administrative Agent for the benefit
of the Lenders upon the terms of this Agreement and any Security Document.
12.23. LIABILITY OF BORROWER'S TRUSTEES, ETC. Notwithstanding any
provision of this Agreement to the contrary, this Agreement has been executed
and delivered by a duly authorized officer of the Borrower, for and on behalf of
the Borrower's trustees. The Administrative Agent and each Lender each
acknowledges that neither the trustees of the Borrower, nor any additional or
successor trustees of the Borrower, nor any beneficiary, officer, employee or
agent of the Borrower, shall have any personal, individual liability hereunder
or under any of the Loan Documents. The Administrative Agent and each Lender
agrees to look solely to the Property and assets of the Borrower (and, where so
provided herein or in any of the Loan Documents, to the Property and assets of
the Management Company) for the satisfaction of all claims of any nature arising
under or in connection with this Agreement.
[The balance of this page is intentionally blank.]
67
68
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Agreement to be duly executed and delivered as of the date first above
written.
FIRST UNION REAL ESTATE EQUITY AND MORTGAGE
MORTGAGE
INVESTMENTS
BY: /s/ Xxxxxx Knicik
---------------------------------------
SENIOR VICE PRESIDENT & TREASURER
FIRST UNION MANAGEMENT, INC.
BY: /s/ Authorized Signer
---------------------------------------
VICE PRESIDENT
NATIONAL CITY BANK,
INDIVIDUALLY AND AS
ADMINISTRATIVE AGENT
BY: /s/ Authorized Signer
---------------------------------------
SENIOR VICE PRESIDENT
KEYBANK NATIONAL ASSOCIATION,
INDIVIDUALLY AND AS
DOCUMENTATION AGENT
BY: /s/ Authorized Signer
---------------------------------------
VICE PRESIDENT
THE HUNTINGTON NATIONAL BANK
BY: /s/ Authorized Signer
---------------------------------------
ASSISTANT VICE PRESIDENT
68
69
FIRST MERIT BANK
BY: /s/ Authorized Signer
---------------------------------------
VICE PRESIDENT
BANKERS TRUST COMPANY,
INDIVIDUALLY AND AS
SYNDICATION AGENT
BY: /s/ Authorized Signer
---------------------------------------
VICE PRESIDENT
MELLON BANK, N. A.
BY: /s/ Authorized Signer
---------------------------------------
ASSISTANT VICE PRESIDENT
69
70
ANNEX I
INFORMATION AS TO LENDERS
NAME OF LENDER COMMITMENT DOMESTIC LENDING OFFICE EURODOLLAR LENDING OFFICE
---------------------------------------------------------------------------------------------------------------------
National City Bank $30,000,000 National City Bank National City Bank
National City Center National City Center
0000 Xxxx Xxxxx Xxxxxx 0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000 Xxxxxxxxx, Xxxx 00000
CONTACTS/NOTIFICATION METHODS:
National City Bank
National City Center
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attn.: Metro/Ohio Division
Facsimile: (000) 000-0000
Xxxxxxx X. XxXxxx
Senior Vice President
Direct Dial: (000) 000-0000
CONTACT FOR BORROWINGS, PAYMENTS, ETC.:
Xxxxxx Xxxxxx
Metro/Ohio Division
Direct Dial: (000) 000-0000
Facsimile: (000) 000-0000
LETTER OF CREDIT NOTIFICATION:
National City Bank
National City Center
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attn.: Metro/Ohio Division
Facsimile: (000) 000-0000
Xxxxxxx X. XxXxxx
Vice President
Direct Dial: (000) 000-0000
PAYMENT INSTRUCTIONS:
ABA # 000000000
Account # 151804
Attention: Commercial Loan Operations
Reference: First Union Real Estate
---------------------------------------------------------------------------------------------------------------------
KeyBank National $25,000,000 KeyBank National Association KeyBank National Association
Association Key Center Key Center
000 Xxxxxx Xxxxxx 000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000 Xxxxxxxxx, Xxxx 00000
CONTACTS/ NOTIFICATION METHODS:
KeyBank National Association
Key Center
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attn.: Commercial Real Estate Group
Facsimile: (000) 000-0000
Xxxxxxx Xxxxx
Vice President
Direct Dial: (000) 000-0000
Facsimile: (000) 000-0000
CONTACT FOR BORROWINGS, PAYMENTS, ETC.:
71
NAME OF LENDER COMMITMENT DOMESTIC LENDING OFFICE EURODOLLAR LENDING OFFICE
---------------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxxxxxxx
Commercial Real Estate
Phone: 000-0000
FAX: 000-0000
WIRING INFORMATION:
ABA # 000000000
Account #2880904128
Attention: Commercial Loan Operations
Reference: First Union Real Estate
---------------------------------------------------------------------------------------------------------------------
The Huntington $20,000,000 The Huntington National Bank The Huntington National Bank
National Bank 000 Xxxxxx Xxxxxx 000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000 Xxxxxxxxx, Xxxx 00000
NOTICES/PRIMARY CONTACTS:
The Huntington National Bank
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attn.: Xxxxx Xxxx
Facsimile: (000) 000-0000
Xxxxx Xxxx
Vice President
Direct Dial: (000) 000-0000
CONTACT FOR BORROWINGS, PAYMENTS, ETC.:
Xxxx Xxxxxx
Commercial Real Estate
Phone: 000-0000
FAX: 000-0000
WIRING INFORMATION:
ABA # 000000000
Account # None
Attention: Cleveland Commercial Loan
Operations
Reference: First Union Real Estate
---------------------------------------------------------------------------------------------------------------------
First Merit Bank $10,000,000 First Merit Bank First Merit Bank
000 Xxxx Xxxxxxxx Xxxxxx 000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000 Xxxxxxxxx, Xxxx 00000
NOTICES:
First Merit Bank
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxx Xxxxxxx, Vice President
Facsimile: (000) 000-0000
PRIMARY CONTACTS:
Xxxx Xxxxxxx
Vice President
Direct Dial: (000) 000-0000
CONTACT FOR BORROWINGS, PAYMENTS, ETC.:
Xxxxxx Xxxxx
Commercial Loans
Phone: 000-0000
FAX: 000-0000
72
NAME OF LENDER COMMITMENT DOMESTIC LENDING OFFICE EURODOLLAR LENDING OFFICE
---------------------------------------------------------------------------------------------------------------------
WIRING INFORMATION:
ABA # 000000000
Account # None
Attention: Xxxxxx Xxxxx - Ext. 5653
Reference: First Union Real Estate
=====================================================================================================================
Bankers Trust $25,000,000 Bankers Trust Company Bankers Trust Company
Company 00xx Xxxxx 00xx Xxxxx
000 Xxxxxxx Xxxxxx 000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
NOTICES:
Same as above
Attn.: Xxxxx Xxxxxxxx
Tel.: (000) 000-0000
Fax.: (000) 000-0000
PRIMARY CONTACTS:
Same as above
CONTACT FOR BORROWINGS, PAYMENTS, ETC.:
Xxxxxx X. Xxxxxx
Assistant Vice President
Bankers Trust Company
14th Floor
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel.: (000) 000-0000
Fax.: (000) 000-0000/6029
CONTACT FOR LETTER OF CREDIT MATTERS:
Xxxxx Xxxxxxx
Vice President
Bankers Trust Company
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel.: (000) 000-0000
Fax.: (000) 000-0000
WIRING INFORMATION:
ABA # 021 00 1033
Account No.: 00000000
Attention: Commercial Loan Division
Reference: First Union Xxxxx Estate Equity
and Mortgage Investments
=====================================================================================================================
Mellon Bank, N. A. $15,000,000 Mellon Bank, X. X. Xxxxxx Bank, N. A.
1 Mellon Bank Center 0 Xxxxxx Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000 Xxxxxxxxxx, Xxxxxxxxxxxx 00000
NOTICES:
Mellon Bank, N. A.
Suite 2915
1 Mellon Bank Center
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn.: Xxxxxx Xxxxxxxx
Assistant Vice President
Tel.: (000) 000-0000
Fax.: (000) 000-0000
PRIMARY CONTACT:
Same as above
CONTACT FOR BORROWINGS, PAYMENT, ETC.:
Xxxx Xxx
73
NAME OF LENDER COMMITMENT DOMESTIC LENDING OFFICE EURODOLLAR LENDING OFFICE
---------------------------------------------------------------------------------------------------------------------
Tel.: (000) 000-0000
Fax.: (000) 000-0000
WIRING INSTRUCTIONS:
ABA # 0000-0000-0
Attention: Commercial Loan Operations
Reference: First Union Real Estate Equity and
Mortgage Investments
Account No.: 990856115
Attn.: Xxxx Xxx
Tel.: (000) 000-0000
Fax.: (000) 000-0000
=====================================================================================================================
74
ANNEX II
INFORMATION AS TO SUBSIDIARIES AND EQUITY INVESTMENTS
NAME OF JURISDICTION PERCENTAGE OF NAMES AND JURISDICTIONS JURISDICTIONS
SUBSIDIARY WHERE OUTSTANDING STOCK ADDRESSES WHERE WHERE
AND ORGANIZED OR OTHER EQUITY OF MINORITY QUALIFIED AS SUBSTANTIAL
TYPE OF INTERESTS OWNED HOLDERS, A FOREIGN ASSETS
ORGANIZATION (INDICATING WHETHER IF ANY CORPORATION LOCATED
OWNED BY THE OR
BORROWER OR A OTHER ENTITY
SPECIFIED SUBSIDIARY)
------------------------------------------------------------------------------------------------------------------------
Xxxx Ohio 100%, by the N/A N/A Louisiana
Building Borrower
Corporation,
a corporation
------------------------------------------------------------------------------------------------------------------------
3006302 Nova Scotia 100%, by the N/A N/A Ohio (interest
Nova Scotia Borrower in notes)
Company, a
corporation
------------------------------------------------------------------------------------------------------------------------
First Union Delaware 100%, by the X/X X/X Xxxxxxx,
Xxxxxxxx Xxxxxxxx Xxxxxx (100%
Holdings, interest in
Inc., a 3006714 Nova
corporation Scotia
Company)
------------------------------------------------------------------------------------------------------------------------
3006714 Nova Scotia 100%, by First Union N/A N/A Ontario,
Nova Scotia Canadian Holdings, Canada
Company Inc.
------------------------------------------------------------------------------------------------------------------------
3006712 Nova Scotia 100%, by the N/A N/A Manitoba;
Nova Scotia Borrower Saskatchewan;
Company, a Alberta and
corporation British
Columbia,
Canada
------------------------------------------------------------------------------------------------------------------------
First Delaware 100%, by the N/A N/A Ohio (50%
Southwest I, Borrower interest in First
Inc., a Union
corporation Southwest
L.L.C.)
------------------------------------------------------------------------------------------------------------------------
First Union Delaware 50% by the Borrower N/A Louisiana Ohio (interest
Southwest and 50% by First in Southwest
L.L.C., a Southwest I, Inc. Shopping
limited Centers Co. I,
liability L.L.C.)
company
75
NAME OF JURISDICTION PERCENTAGE OF NAMES AND JURISDICTIONS JURISDICTIONS
SUBSIDIARY WHERE OUTSTANDING STOCK ADDRESSES WHERE WHERE
AND ORGANIZED OR OTHER EQUITY OF MINORITY QUALIFIED AS SUBSTANTIAL
TYPE OF INTERESTS OWNED HOLDERS, A FOREIGN ASSETS
ORGANIZATION (INDICATING WHETHER IF ANY CORPORATION LOCATED
OWNED BY THE OR
BORROWER OR A OTHER ENTITY
SPECIFIED SUBSIDIARY)
------------------------------------------------------------------------------------------------------------------------
Southwest Delaware 100% by First Union N/A Louisiana Louisiana
Shopping Southwest L.L.C. (Pecanland
Centers Co. Mall, Monroe,
I, L.L.C., a Louisiana) and
limited Ohio (interest
liability in Southwest
company Shopping
Centers Co. II
L.L.C. and
Temple
Shopping
Center Co.
L.L.C.)
------------------------------------------------------------------------------------------------------------------------
First Delaware 100%, by the N/A Louisiana and Ohio (100%
Southwest II, Borrower Texas interest in First
Inc., a XX XX,
corporation L.L.C.)
------------------------------------------------------------------------------------------------------------------------
First XX XX, Delaware 100% by First N/A Louisiana; Ohio (1%
L.L.C., a Southwest II, Inc. Texas; and interest in
limited Oklahoma Southwest
liability Shopping
company Centers Co. II,
L.L.C.)
------------------------------------------------------------------------------------------------------------------------
Southwest Delaware 99% by Southwest N/A Arkansas; Xxxx Xxxxx
Xxxxxxxx Xxxxxxxx Xxxxxxx Xx. Xxxxxxxxx; Mall, Little
Centers Co. I, L.L.C.; 1% by Texas; Rock,
II, L.L.C., a First XX XX, L.L.C. Oklahoma; Arkansas;
limited and New Alexandria
liability Mexico Mall,
company Alexandria,
Louisiana;
Xxxxx Xxxxx
Xxxx, Xxxxx
Xx, Xxx
Xxxxxx;
Mesilla Valley
Mall,Las
Cruces, New
Mexico;
Shawnee Mall,
Shawnee,
Oklahoma;Xxxx
en Mall,
76
NAME OF JURISDICTION PERCENTAGE OF NAMES AND JURISDICTIONS JURISDICTIONS
SUBSIDIARY WHERE OUTSTANDING STOCK ADDRESSES WHERE WHERE
AND ORGANIZED OR OTHER EQUITY OF MINORITY QUALIFIED AS SUBSTANTIAL
TYPE OF INTERESTS OWNED HOLDERS, A FOREIGN ASSETS
ORGANIZATION (INDICATING WHETHER IF ANY CORPORATION LOCATED
OWNED BY THE OR
BORROWER OR A OTHER ENTITY
SPECIFIED SUBSIDIARY)
------------------------------------------------------------------------------------------------------------------------
Killeen,
Texas; Brazos
Mall, Lake
Jackson, Texas
------------------------------------------------------------------------------------------------------------------------
Temple Delaware 99% by Southwest N/A Texas Texas (50%
Shopping Shopping Centers Co. partnership
Center Co., I, L.L.C. and 1% by interest in
L.L.C., a the Borrower shopping mall)
limited (Temple Mall,
liability Temple,
company Texas)
================== ================ ========================= ================ ================== ====================
CERTAIN INVESTMENTS
-None-
77
ANNEX III
LIST OF INITIAL MORTGAGED PROPERTIES, MARKET CONSTANTS
AND COVERAGE FACTORS
PROPERTY APPRAISED 12 MONTH COVERAGE MARKET BORROWING
VALUE PROPERTY NOI FACTOR CONSTANT BASE
(6/30/97)
--------------------------------------------------------------------------------------------------------------------------
Illuminating Building $36,000,000 $3,692,200 1.30 10.71% $26,518,700
Cleveland, Ohio
--------------------------------------------------------------------------------------------------------------------------
Xxxxxxxxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxx $47,400,000 $4,781,800 1.20 10.71% $37,206,700
--------------------------------------------------------------------------------------------------------------------------
Kandi Mall $16,000,000 $1,456,100 1.30 10.71% $10,458,200
Willmar, Minnesota
--------------------------------------------------------------------------------------------------------------------------
Xxxxxx Village Apartments $12,800,000 $1,291,900 1.30 9.87% $10,068,600
Clarkston, Georgia
--------------------------------------------------------------------------------------------------------------------------
Briarwood Apartments $7,775,000 $836,700 1.30 9.87% $6,520,900
Fayetteville, North Carolina
--------------------------------------------------------------------------------------------------------------------------
Crossroads Mall $16,200,000 $1,530,000 1.30 10.71% $10,989,000
Ft. Dodge, Iowa
--------------------------------------------------------------------------------------------------------------------------
Mall 205 $28,500,000 $2,447,000 1.30 10.71% $17,575,200
--------------------------------------------------------------------------------------------------------------------------
Mountaineer Mall $14,000,000 $1,806,000 1.30 10.71% $12,971,300
--------------------------------------------------------------------------------------------------------------------------
Woodfield Apartments $4,010,000 $356,000 1.30 9.87% $2,774,500
--------------------------------------------------------------------------------------------------------------------------
Windgate Apartments $6,400,000 $591,000 1.30 9.87% $4,606,000
--------------------------------------------------------------------------------------------------------------------------
Valley Mall $11,450,000 $1,041,700 1.30 10.71% $7,481,900
--------------------------------------------------------------------------------------------------------------------------
TOTALS $200,535,000(1)
@60%= $19,830,400
$120,321,000 $147,171,100(2)
==========================================================================================================================
---------------
1 All amounts in this column are subject to receipt of appraisals.
2 The individual Borrowing Base for each Mortgaged Property, and the
Aggregate Borrowing Base for all Mortgaged Properties, were determined
using a Market Constant of 10.71% for certain Properties, which was
based upon an interest rate of 8.875% and an amortization period of 20
years, and a Market Constant of 9.87% for certain other Properties,
which was based upon an interest rate of 8.750% and an amortization
period of 25 years, in each case as selected by the Administrative
Agent.
78
ANNEX IV
DESCRIPTION OF CERTAIN PROPERTY DISPOSITIONS
-None-
79
ANNEX V
DESCRIPTION OF CERTAIN LITIGATION
1. Xxxxx vs. First Union Management, Inc., et al.
Court of Common Pleas, Cuyahoga County, Ohio
Case No. 284120
---------------
This action alleging wrongful discharge on account of age
discrimination was filed in February, 1995, by a former executive
officer of the management company. Xxxxx was employed in various
positions in the management company from 1985, but his employment was
terminated in 1994 on account of failure to perform in accordance with
performance standards established by upper management. Xxxxx sued;
claiming that he was discharge don account of his age. Both the Trust
and the management company were named as defendants. The Trust has been
dismissed as defendant upon Motion for Summary Judgment.
The case has been reassigned to Judge Xxxxxxx Celebrese. No new trial
date has been set. A pretrial conference is scheduled for February
1998. Management believes that the claim asserted by Xxxxx in this
action is totally without merit.
This case will be vigorously defended.
2. Beechwood Contract, Incorporation vs. Bridges & Company, Inc., First
Union Real Estate Equity Mortgage and Investments, et al.
Circuit Court of Monogalia County, West Virginia
Civil Action No. 94-C-39
------------------------
This action was filed in January, 1994 and relates to a dispute
stemming from a construction contract for improvements at Mountaineer
Mall in Morgantown, West Virginia. Beechwood Contracting Corporation
("Beechwood") was a subcontractor to Bridges and Company, Inc.
("Bridges"), which was the general contractor for the construction
project. Beechwood alleged that Bridges breached the subcontract
between them by violating various conditions set forth in Beechwood's
original bid. Beechwood claimed it was unable to complete the work on
time and sued for direct and consequential damages in excess of $3
Million. Beechwood also asked for punitive damages from Bridges in the
amount of $4.5 Million. Beechwood filed a mechanics lien on the
property and in its lawsuit, asserted a claim against First Union in
the amount of $2.9 Million.
First Union filed a cross claim against Bridges asserting that any
damages suffered by Beechwood were caused by Bridges. First Union
sought indemnification from Bridges.
Bridges filed a cross claim against First Union alleging that First
Union breached its contract with Bridges by furnishing defective plans
and specifications. The cross claim of Bridges did not specify an
amount but demanded an amount sufficient to compensate Bridges for
First Union's alleged breach.
In July, 0000 Xxxxxxxxx filed for bankruptcy but has been permitted to
pursue its claims in this litigation.
After a series of motions for summary judgment by both Bridges and
First Union, which motions were denied, a jury trial was held in March
of 1996. The jury, after due deliberation, returned the verdict in
favor of Beechwood against Bridges in the amount of $85,550.00, and
upon the cross claim of Bridges relating to the Beechwood matter,
against First Union in the amount of $14,600.00. First Union has paid
the cross claim verdict of $14,600.00.
80
During the course of the litigation, First Union withheld final payment
under the contract with Bridges, In August, 1996 the court granted
partial summary judgment to Bridges against First Union in the amount
of $117,106.00, contingent upon the release of the original mechanic's
lien in the amount of $2.9 Million. A new mechanic's lien for
$388,575.00 has been substituted. First Union still holds $225,132.00
from the final contract amount under the contract. A bench trial on the
remaining claims and counterclaims was held on May 21, 1997. First
Union stipulated to an amount owing under the contract to bridges of
approximately $200,000.00. First Union asserts that under the
provisions of the contract between it and Bridges, Bridges must
indemnify First Union for attorney's fees and expenses incurred in
connection with the defense of the Beechwood claim, which amount is
$209,804.00. This claim was presented at the trial in May. A decision
is pending.
2
81
ANNEX VI
LIST OF CERTAIN EMPLOYEE BENEFIT PLANS
AND
GUARANTEED PENSION PLANS
DESCRIPTION
First Union Money Purchase Plan, adopted effective January 1, 1995, administered
by a pension committee of Trust officers appointed by the Board.
Additionally, see Benefits Lists attached.
82
ANNEX VII
DESCRIPTION OF CERTAIN MATERIAL AGREEMENTS
The Borrower and the Management Company (and certain subsidiaries,
partnerships and joint ventures thereof) are parties to net leases for each of
the properties managed by the Management Company (or such subsidiaries,
partnerships or joint ventures) for the Borrower.
The Borrower and the Management Company are parties to an assignment
where the Borrower has assigned its rights and obligations under a Share
Purchase Agreement, dated as of February 18, 1997, among the Borrower, Impark
Investments Inc., the persons listed on Schedule 1 thereto and certain others
(as amended from time to time), and the Management Company has accepted such
assignment pursuant to an Assignment, dated March 27, 1997, between the Borrower
and the Management Company.
The Borrower and certain Canadian subsidiaries of the Management
Company are parties to an Asset Purchase Agreement where such subsidiaries have
agreed to sell, assign, transfer and convey all of their respective interests in
and to certain real property to the Borrower and the Borrower has agreed to
accept such sale, assignment transfer and conveyance. In addition, as part of
the Asset Purchase Agreement, a Canadian subsidiary of the Management Company
has agreed to take reasonable commercial steps to acquire the remaining 50%
interest it does not currently own in a joint venture, whereupon it will either
(i) acquire certain real property owned by such joint venture and transfer all
of its right, title and interest in such real property to the Borrower or (ii)
cause the joint venture to transfer all of its right, title and interest in such
real property to the Borrower.
The Borrower is a party to a Put-Call Agreement, dated April 17, 1997
(the "PUT-CALL AGREEMENT"), by and among the Borrower, Impark Investments, Inc.
("Investco") and certain shareholders of 3357392 Canada Inc. identified therein
(the "Onex Associates") pursuant to which the Borrower granted to Investco and
the Onex Associates certain put rights and Investco and the Onex Associates
granted the Borrower certain call rights with respect to certain shares Investco
and the Onex Associates own in 3357392 Canada Inc.
The Borrower is a party to a Security Trust Indenture, dated April 17,
1997, by and among the Borrower, Investco, Onex Associates and Montreal Trust
Company of Canada pursuant to which the Borrower pledged certain securities
described therein to secure Borrower's obligations under the Put-Call Agreement.
The Borrower is a party to a Deposit Agreement, dated April 17, 1997,
by and among the Borrower, Investco, Onex Associates and Montreal Trust Company
pursuant to which Investco and the Onex Associates deposited certain shares with
the Montreal Trust Company that are the subject of the Put-Call Agreement.
The Borrower is a party to an Ancillary Agreement, dated April 17,
1997, by and between Borrower, BT Bank of Canada ("BT") and Hong Kong Bank of
Canada ("HKB") pursuant to which BT and HKB have the right under certain
circumstances to require Borrower to purchase certain loans then outstanding by
BT and HKB under an Amended and Restated Credit Agreement, dated April 17, 1997,
among Imperial Parking Limited, BT and HKB.
83
ANNEX VIII
DESCRIPTION OF INDEBTEDNESS FOR BORROWED MONEY,
INCLUDING THAT OWED TO THE BORROWER BY AFFILIATES
As of June 30, 1997
(In Thousands)
First Union Real Estate Investments
Mortgage Loans $119,453.00
Senior Notes 100,000.00
Other Liabilities 22,513.00
FIRST UNION REAL ESTATE
INVESTMENTS FINANCE SUB(3)
Loans to Canco I, Canco 2 $30,600.00
AS OF JUNE 30, 1997
(IN THOUSANDS)
PROFORMA
FIRST UNION REAL ESTATE INVESTMENTS
Mortgage Loans(4) $323,180.00
Senior Notes 100,000.00
Other Liabilities(4) 61,513.00
FIRST UNION REAL ESTATE
INVESTMENTS FINANCE SUB(3)
Loans to Canco 1, Canco 2 $30,600
----------
3 In connection with the transaction described in the third paragraph of
Annex VII, Canco will incur indebtedness to Bankers Trust under the
Canco Agreement and the Borrower will incur Contingent Obligations with
respect thereto.
4 Includes adjustments to reflect full consolidation of debt of the
remaining 74% JV partners' interest in a portfolio of nine shopping
malls.
84
ANNEX IX
DESCRIPTION OF LETTERS OF CREDIT DEEMED ISSUED UNDER
THE CREDIT AGREEMENT
Letter of Credit No. 4942, issued by National City Bank on
November 25, 1996 in the amount of USD $150,000, pursuant to
the application of the Borrower, for the benefit of Genesis
Underwriting Management, with an expiration date of 12/31/97.
85
EXHIBIT A-1
NOTICE OF BORROWING
[Date]
National City Bank,
as Administrative Agent for the Lenders party
to the Credit Agreement referred to below
National City Center
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Metro/Ohio Division
------------------------------
Re: Notice of Borrowing under Amended and Restated
Credit Agreement, dated as of November 1, 1997
----------------------------------------------
Ladies and Gentlemen:
The undersigned, First Union Real Estate Equity and Mortgage
Investments (the "BORROWER"), refers to the Amended and Restated Credit
Agreement, dated as of November 1, 1997 (as amended from time to time, the
"CREDIT AGREEMENT", the terms defined therein being used herein as therein
defined), among the Borrower, First Union Management, Inc., the financial
institutions from time to time party thereto (the "LENDERS"), and you, as
Administrative Agent for such Lenders, and hereby gives you notice, irrevocably,
pursuant to section 1.3(a) of the Credit Agreement, that the undersigned hereby
requests one or more Borrowings under the Credit Agreement, and in that
connection sets forth in the schedule attached hereto the information relating
to each such Borrowing (collectively the "PROPOSED BORROWING") as required by
section 1.3(a) of the Credit Agreement.
The Borrower hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the Proposed Borrowing:
(A) the representations and warranties of the Credit Parties
contained in the Credit Agreement and the other Loan Documents are and
will be true and correct in all material respects, before and after
giving effect to the Proposed Borrowing and to the application of the
proceeds thereof, as though made on such date, except to the extent
that such representations and warranties expressly relate to an earlier
specified date, in which case such representations and warranties were
true and correct in all material respects as of the date when made;
(B) no Default or Event of Default has occurred and is
continuing, or would result from such Proposed Borrowing or from the
application of the proceeds thereof; and
(C) after giving effect to the Proposed Borrowing, the sum of
the outstanding Loans, the Letter of Credit Outstandings and the
Aggregate Measured Swap Credit Risk (if any) of all Designated Hedge
Agreements, will not exceed the Aggregate Borrowing Base.
Very truly yours,
FIRST UNION REAL ESTATE EQUITY
AND MORTGAGE INVESTMENTS
By:
----------------------------------
Title:
86
BORROWING SCHEDULE
PROPOSED BORROWING #1:
BUSINESS DAY INTEREST PERIOD
OF Aggregate Amount IF LOANS ARE
PROPOSED BORROWING Type of Loans of Loans EURODOLLAR LOANS
-------------------------------------------------------------------------------------------------------------------------
Base Rate Loans One Month
_________________, Two Months
19____ Eurodollar Loans $____________________ Three Months
Six Months
[Circle One of Nine Months
Above] Twelve Months
[Circle one of
above]
=========================================================================================================================
PROPOSED BORROWING #2:
BUSINESS DAY INTEREST PERIOD
OF Aggregate Amount IF LOANS ARE
PROPOSED BORROWING Type of Loans of Loans EURODOLLAR LOANS
-------------------------------------------------------------------------------------------------------------------------
Base Rate Loans One Month
_________________, Two Months
19____ Eurodollar Loans $____________________ Three Months
Six Months
[Circle One of Nine Months
Above] Twelve Months
[Circle one of
above]
=========================================================================================================================
PROPOSED BORROWING #3:
BUSINESS DAY INTEREST PERIOD
OF Aggregate Amount IF LOANS ARE
PROPOSED BORROWING Type of Loans of Loans EURODOLLAR LOANS
-------------------------------------------------------------------------------------------------------------------------
Base Rate Loans One Month
_________________, Two Months
19____ Eurodollar Loans $____________________ Three Months
Six Months
[Circle One of Nine Months
Above] Twelve Months
[Circle one of
above]
=========================================================================================================================
87
EXHIBIT A-2
LETTER OF CREDIT REQUEST
No. (5)
--------------
Dated (6)
----------
National City Bank,
as Administrative Agent for the Lenders party
to the Credit Agreement referred to below
National City Center
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Metro/Ohio Division
------------------------------
Re: Letter of Credit Request under Amended and Restated
Credit Agreement, dated as of November 1, 1997
----------------------------------------------
Ladies and Gentlemen:
The undersigned, First Union Real Estate Equity and Mortgage
Investments (the "BORROWER"), refers to the Amended and Restated Credit
Agreement, dated as of November 1, 1997 (as amended, modified or supplemented
from time to time, the "CREDIT AGREEMENT", the capitalized terms defined therein
being used herein as therein defined), among the Borrower, First Union
Management, Inc., the financial institutions from time to time party thereto
(the "LENDERS"), and you, as Administrative Agent for such Lenders.
The undersigned hereby requests that ______, as a Letter of Credit
Issuer, issue a Letter of Credit on ______, 199_ (the "DATE OF
ISSUANCE") in the aggregate amount of $____, for the account
of____________________.
The beneficiary of the requested Letter of Credit will be _______,(7)
and such Letter of Credit will be in support of _______(8) and will have a
stated termination date of _____.(9)
The Borrower hereby certifies that the following statements are true on
the date hereof, and will be true on the Date of Issuance:
(A) the representations and warranties of the Credit Parties
contained in the Credit Agreement and the other Loan Documents are
and will be true and correct in all material respects, before and
after giving
--------
5 Letter of Request Number.
6 Date of Letter of Request (at least five Business Days prior to the
Date of Issuance or such lesser number as may be agreed by the relevant
Letter of Credit Issuer).
7 Insert name and address of beneficiary.
8 Insert description of the supported obligations, name of agreement
and/or the commercial transaction to which this Letter of Credit
Request relates.
9 Insert last date upon which drafts may be presented (which may not be
later than twelve months after the Date of Issuance or beyond the
Business Day next preceding the Maturity Date).
88
effect to the issuance of the Letter of Credit requested hereby, as
though made on the Date of Issuance, except to the extent that such
representations and warranties expressly relate to an earlier specified
date, in which case such representations and warranties were true and
correct in all material respects as of the date when made;
(B) no Default or Event of Default has occurred and is
continuing, or would result after giving effect to the issuance of the
Letter of Credit requested hereby; and
(C) after giving effect to the issuance of the Letter of
Credit requested hereby, the sum of the outstanding Loans, the Letter
of Credit Outstandings and the Aggregate Measured Swap Credit Risk (if
any) of all Designated Hedge Agreements, will not exceed the Aggregate
Borrowing Base.
Copies of all documentation with respect to the supported transaction
are attached hereto.
Very truly yours,
FIRST UNION REAL ESTATE EQUITY
AND MORTGAGE INVESTMENTS
By: ____________________________________
Title:.
2
89
EXHIBIT B
REVOLVING NOTE
$_______________ Cleveland, Ohio
_______, 1997
FOR VALUE RECEIVED, the undersigned FIRST UNION REAL ESTATE EQUITY AND
MORTGAGE INVESTMENTS, a real estate investment trust organized under the laws of
the State of Ohio (herein, together with its successors and assigns, the
"BORROWER"), hereby promises to pay to the order of _________________________
(the "LENDER"), in lawful money of the United States of America in immediately
available funds, at the office of National City Bank (the "ADMINISTRATIVE
AGENT") located at National City Center, 0000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxx
00000, on the Maturity Date (as defined in the Agreement referred to below), the
principal sum of ________________ DOLLARS ($_____ ) or, if less, the then unpaid
principal amount of all Loans (as defined in the Agreement) made by the Lender
pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount of each Loan made by the Lender in like money at said office from the
date hereof until paid at the rates and at the times provided in section 1.8 of
the Agreement.
This Note is one of the Notes referred to in the Amended and Restated
Credit Agreement, dated as of November 1, 1997, among the Borrower, First Union
Management, Inc., the financial institutions from time to time party thereto
(including the Lender), and National City Bank, as Administrative Agent (as from
time to time in effect, the "AGREEMENT"), and is entitled to the benefits
thereof and of the other Loan Documents (as defined in the Agreement). As
provided in the Agreement, this Note is subject to mandatory prepayment prior to
the Maturity Date, in whole or in part. The Notes amend and restate Notes
previously outstanding under the Agreement. Any indebtedness outstanding under
any of such prior Notes which is owed to the Lender at the time this Note is
executed and delivered shall continue outstanding hereunder.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
Notwithstanding any provision of this Note to the contrary, this Note
has been executed and delivered by a duly authorized officer of the Borrower,
for and on behalf of the Borrower's trustees. The Lender acknowledges that
neither the trustees of the Borrower, nor any additional or successor trustees
of the Borrower, nor any beneficiary, officer, employee or agent of the
Borrower, shall have any personal, individual liability hereunder or under any
of the Loan Documents. The Lender agrees to look solely to the property and
assets of the Borrower (and, where so provided in any of the Loan Documents, to
the property and assets of the Management Company) for the satisfaction of all
claims of any nature arising under or in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF OHIO.
FIRST UNION REAL ESTATE EQUITY
AND MORTGAGE INVESTMENTS
By:____________________________________
Senior Vice President & Treasurer
90
LOANS AND PAYMENTS OF PRINCIPAL
==============================================================================================================================
AMOUNT
OF
DATE AMOUNT TYPE PRINCIPAL UNPAID
OF OF OF INTEREST PAID OR PRINCIPAL MADE
NOTATION LOAN LOAN PERIOD PREPAID BALANCE BY
------------------------------------------------------------------------------------------------------------------------------
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==============================================================================================================================
91
EXHIBIT C
FORM OF OPINION OF SPECIAL COUNSEL TO THE BORROWER
[Closing Date]
National City Bank,
as Administrative Agent for the Lenders party
to the Credit Agreement referred to below
National City Center
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Metro/Ohio Division
------------------------------
--and--
each of the Lenders party to the
Credit Agreement referred to below
Re: U.S. $125,000,000 Amended and Restated Credit Agreement
with First Union Real Estate Equity and Mortgage Investments
------------------------------------------------------------
Ladies and Gentlemen:
The undersigned have acted as counsel to First Union Real Estate Equity
and Mortgage Investments, an Ohio real estate investment trust ("FURE") in
connection with the establishment of a $125,000,000 revolving credit loan
facility pursuant to a certain Amended and Restated Credit Agreement (the
"Credit Agreement") dated as of November 1, 1997, by and among FURE, First Union
Management, Inc., a Delaware corporation ("FUMI"), the financial institutions
named as Lenders therein (the "Lenders"), and National City Bank, as
Administrative Agent for the Lenders under the Credit Agreement (the
"Administrative Agent"). This opinion is delivered to you at your request in
connection with the transactions contemplated by the Credit Agreement.
Capitalized terms used herein but not defined herein shall have the meanings
ascribed to such terms in the Credit Agreement.
In rendering the opinions expressed below, we have examined the
following documents:
l. the Credit Agreement;
2. the Notes dated of even date herewith from FURE in favor of
the Lenders in the aggregate principal amount of $125,000,000 (the
"Notes");
3. the Open-End Mortgage Deed and Security Agreement, dated as
of September 19, 1996 (the "Original Mortgage"), as amended by
Amendment No. 1 thereto ("Amendment No. 1 to Mortgage"), dated as of
November 1, 1997, from FURE and FUMI in favor of the Administrative
Agent (the Original Mortgage, as so amended, the "Mortgage") relating
to certain property described therein and located in Cuyahoga County,
Ohio (the "Property");
4. the Assignment of Leases, Rents, Contracts, Income and
proceeds related to the Property, dated as of September 19, 1996 (the
"Original Assignment"), as amended by Amendment No. 1 thereto
("Amendment No. 1 to Assignment"), dated as of November 1, 1997, from
FURE and FUMI in favor of the Administrative Agent (the Original
Assignment, as so amended, the "Assignment");
92
5. the UCC-1 financing statements related to the Property
executed by FURE and FUMI as Debtors with the Administrative Agent as
the Secured Party, as filed in the records of Cuyahoga County, Ohio and
with the Ohio Secretary of State (the "Financing Statements");
6. the Amended and Restated Environmental Indemnity Agreement,
dated as of November 1, 1997, from FURE and FUMI in favor of the
Administrative Agent; and
7. solely to the extent necessary for the purposes of the
opinion in paragraph 5 below, each mortgage, deed of trust, deed to
secure debt, assignment of leases, amendment to any of the foregoing,
and UCC-1 financing statement related to any of the foregoing,
contemporaneously or heretofore executed and delivered by FURE and FUMI
in favor of the Administrative Agent as contemplated by section 5.1 of
the Credit Agreement, relating to certain property described therein
and located outside of the State of Ohio.
Documents referred to in items 1-6 above are sometimes collectively referred to
as the "Ohio Documents"; documents referred to in item 7 above are sometimes
collectively referred to as the "Non-Ohio Documents"; and documents referred to
in items 1-7 above are sometimes collectively referred to as the "Loan
Documents".
In addition, we have examined and relied on the originals, or copies
certified or otherwise identified to our satisfaction, of such other instruments
and other certificates of public officials and such other persons, documents,
laws, statutes, ordinances, regulations and other matters and we have made
investigations of law, as we have deemed appropriate as a basis for the opinions
expressed below.
In stating our opinion, we have, with your permission, made the
following assumptions:
A. The Loan Documents to be executed by the Lenders or the
Administrative Agent have been duly and validly authorized, executed
and delivered by the Lenders or the Administrative Agent and constitute
the valid, binding and enforceable obligations of the Lenders or the
Administrative Agent.
X. XXXX has rights in the Collateral.
C. Value has been given by the Lenders for the security
interests in the Property and the Collateral in addition to the value
given by the Lenders in the form of the indebtedness secured by the
Original Mortgage, the Original Assignment and other security (the
"Original Indebtedness").
D. The Notes evidence the Original Indebtedness as
supplemented by the additional indebtedness contemplated by the Credit
Agreement, the Original Indebtedness has not been paid in full, and
there is a substantial principal balance outstanding on the Original
Indebtedness on the date hereof which will not be paid off or otherwise
satisfied by funding upon closing of the transactions contemplated by
the Credit Agreement.
E. Executed counterparts of each of Amendment No. 1 to
Mortgage and Amendment No. 1 to Assignment have been or will be
recorded with the Cuyahoga County Recorder's Office (the "Recording
Office"). The Original Mortgage was recorded in the Recording Office in
Volume 96-09399, Page 12 et seq., and has not been satisfied or
discharged of record, and the Original Assignment was recorded in the
Recorder's Office in Volume 96-09399, Page 45 et seq., and has not been
satisfied or discharged of record.
F. The Financing Statements contain the correct name of the
Administrative Agent as secured party and the current address of the
secured party from which information concerning the security interests
may be obtained.
G. The Financing Statements have been filed with each of the
office of the Ohio secretary of State (the "Filing Office") and the
Recording Office.
H. Each document submitted to us as an original is authentic.
2
93
I. Each document submitted to us as a certified, conformed or
photostatic copy conforms to the authentic original document.
J. Each document submitted to us as the execution form of such
document is the execution form of such document and will be executed in
such form.
K. Each of the Loan Documents will be completed by attachment
of all exhibits and schedules identified by each of the Loan Documents,
and such exhibits and schedules are correct and complete.
As to certain questions of fact that are material to our opinion, we
have relied upon the representations, warranties, recitals and expressed
intentions made or set forth in the Loan Documents. With respect to such
matters, we have not made any independent investigation or verification of the
information contained therein for purposes of this opinion except as may be
expressly set forth in this opinion.
The opinions expressed herein are limited to the laws of the state of
Ohio. We express no opinion as to the possible application of laws of any other
jurisdiction or to the effect of such laws on the transactions evidenced by the
Loan Documents.
Based upon and subject to the foregoing, and subject to the exceptions,
limitations, assumptions and qualifications set forth below, we are of the
opinion that, under applicable law in effect on the date of this opinion:
x. XXXX is (a) a real estate investment trust that is
qualified to transact business in the State of Ohio; (b) governed by
Chapter 1747 of the Ohio Revised Code; (c) has been assigned Real
Estate Investment Trust No. RT28; and (d) has complied with all
provisions of the laws of the state of Ohio governing real estate
investment trusts in connection with the Loan.
2. FURE is currently in full force and effect as a real estate
investment trust and has the power under its Amended Declaration of
Trust (as amended through the date hereof) to engage in the business in
which it is presently engaged.
3. The execution and delivery of the Loan Documents by FURE,
and FURE's performance of all its obligations thereunder, have been
duly authorized by all requisite action of FURE.
4. The Ohio Documents have been duly executed and delivered by
FURE and are valid and binding obligations of FURE, enforceable against
it in accordance with their respective terms.
5. The Non-Ohio Documents have been duly executed and
delivered by FURE.
6. The aggregate interest to be paid by FURE pursuant to the
Credit Agreement and the Note, exclusive of any default interest, late
fees or other similar penalties, is not usurious under the applicable
laws of Ohio.
7. Effective upon the due recording of the Original Mortgage
in the appropriate records of the Recording Office, as noted above, the
Original Mortgage was effective to create, in favor of the
Administrative Agent, a valid mortgage lien in all of FURE's right,
title and interest in the Property and the Original Mortgage created a
valid security interest in the Collateral described in the Original
Mortgage. Upon due recordation of Amendment No. 1 to Mortgage in the
appropriate records of the Recording Office, the Original Mortgage, as
amended by Amendment No. 1 to Mortgage, will be effective to secure the
additional indebtedness described in Amendment No. 1 to Mortgage.
8. The Financing Statements are in proper form so as to comply
with Ohio filing requirements, and, when duly filed in the Filing
Office and the Recording Office, and assuming that the security
interest granted in the Mortgage has then attached, the security
interest granted by the Mortgage in the Collateral described in the
Mortgage and in the Financing Statements will have been perfected to
the extent perfection may be
3
94
accomplished by filing in Ohio under the UCC. However, proper
continuation statements of the Financing Statements must be filed in
the Filing Office and the Recording Office within six (6) months prior
to the expiration of each five (5) year period from the date of the
respective original dates of the filings. We express no opinion as to
the perfection of any lien or security interest of the Administrative
Agent in Collateral that cannot be perfected by filing in Ohio.
We call to your attention that the perfection of the above
security interests will be terminated as to any collateral acquired by
FURE more than four (4) months after it so changes its name, identity
or structure as to make the Financing Statements seriously misleading,
unless new appropriate financing statements indicating the new name,
identity, or structure of FURE are properly filed before the expiration
of such four (4) months. Furthermore, the perfection of the security
interests in the Collateral constituting accounts, inventory or
equipment will be terminated as to accounts four (4) months after FURE
changes its chief executive office or with respect to items of
inventory or equipment four (4) months after it moves any such item of
inventory or equipment outside the state, unless such security
interests are perfected in the new jurisdiction before such
termination.
9. Neither the execution and delivery by FURE of the Loan
Documents, nor the performance by FURE of any of its obligations under
any of the Loan Documents, conflicts with and/or constitutes a default,
violation or breach of the Amended Declaration of Trust (as amended
through the date hereof), by-laws or regulations of FURE or any
resolutions adopted by the trustees of FURE.
10. To our knowledge, execution and delivery by FURE of, and
performance by FURE of its agreements in the Loan Documents do not: (a)
breach, or result in default under, any existing obligation of FURE
under any mortgage, lease, financing agreement, contract or other
instrument or agreement to which FURE is a party or by which any
material component of its property is bound, (b) breach or otherwise
violate any order of any court, administrative agency or public board
or body against or affecting FURE or the Property, (c) require any
waiver, consent or approval by any creditor of FURE or by any other
person or entity, or (d) result in the creation or imposition of any
lien or security interest on FURE's property or other assets, except
for the liens and security interests created by the Loan Documents in
favor of the Administrative Agent.
11. As of the date of execution of the Loan Documents, based
on searches dated on or about __________, 1997, of the dockets of the
Cuyahoga County Court of Common Pleas and the United States District
Court for the Northern District of Ohio, Eastern Division, and based
upon an inquiry of the lawyers of our firm who regularly handle
litigation matters for FURE, to our knowledge, there is not pending or
threatened any action, suit, proceeding (at law or in equity) or
investigation before or by any court, administrative agency or public
board or body against or affecting FURE or the Property which would, if
determined adversely to FURE, have a material adverse effect against
FURE or its ability to perform its obligations under the Loan
Documents.
12. FURE is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
13. FURE is a qualified real estate investment trust, as such
term is defined in Sections 856 through 860 of the Internal Revenue
Code of 1986, as amended.
Our opinions set forth above are subject to the following
qualifications:
A. This opinion is limited to the matters set forth herein,
and no opinion is implied or may be inferred beyond the matters
expressly stated.
B. Our opinion as to the enforceability of any of the Loan
Documents in accordance with their terms is limited by (l) applicable
bankruptcy, insolvency, fraudulent transfer, rehabilitation,
liquidation, conservation, receivership, dissolution, reorganization,
moratorium and other similar laws of general application affecting the
rights of creditors, (2) applicable laws of the State of Ohio and
principles of equity, including, without
4
95
limitation, the doctrine of marshalling of assets, or principles of
public policy which may restrict the enforcement of certain remedies
provided therein but which, in our opinion, do not affect the validity
of the Loan Documents and will not interfere with the practical
realization of the rights and benefits of the security intended to be
provided therein or thereby, (3) the discretionary nature of specific
performance and other equitable remedies, and (4) the discretion of any
court in granting relief or issuing any order.
C. The enforceability of certain rights, waivers and remedies
provided in the Loan Documents, as discussed below, are or may be
unavailable or limited by certain laws and judicial decisions; however,
we are of the opinion that such laws and judicial decisions do not,
subject to the other exceptions, limitations and qualifications in this
letter, make the remedies (including, without limitation, the remedy of
foreclosure) generally afforded by the Loan Documents inadequate for
the substantial realization of the economic benefits of the security
and the rights intended to be afforded thereby. Such provisions,
waivers and remedies include the following: (i) provisions for payment
or repayment of interest, charges and expenses may not be enforceable
to the extent the same are determined to be a penalty; (ii) the
exercise of any power of sale referred to in the Mortgage, other than a
judicial foreclosure, will not judicially settle the rights of parties
having an interest in the Property, including, but not limited to
FURE's equitable right of redemption, and may be limited by equitable
principles at the time in effect; (iii) the provisions allowing for
recovery of attorneys' fees and expenses may not be enforceable; (iv)
sums advanced by the Administrative Agent pursuant to the Mortgage,
other than draws, advances or disbursements of Loan proceeds, may not
be secured by the Mortgage to the extent that the expenditures involved
were not for the payment of "taxes, assessments, insurance premiums or
costs incurred for the protection of the mortgaged premises" within the
meaning of Ohio Revised Code section 5301.233; (v) the provisions of
the Mortgage relating to taking possession of the Property may not be
enforceable without a judicial order allowing the forcible entry and
detainer of the subject premises or to the extent of doing so by force
if such force would constitute a breach of the peace or unreasonable
force to accomplish the objective; (vi) provisions purporting to waive
rights of FURE may not be enforceable (including, without limitation,
waiver of the right to trial by jury); (vii) provisions that attempt to
exculpate the Administrative Agent from liability with regard to
obtaining, possessing, dealing with or disposing of the Property may
not be enforceable; (viii) the periods for notice to FURE prior to the
Administrative Agent exercising its rights and remedies may not satisfy
any standard of reasonableness in effect at the time of such action;
(ix) public policy considerations may limit the rights of the
Administrative Agent to indemnification against actions taken by the
Administrative Agent in violation of applicable law or public policy;
(x) the provisions of the Loan Documents that purport to direct the
order of application of proceeds may be varied by order of court, or by
the application of the UCC, to the extent that expenses or retaking and
selling collateral are not reasonable expenses within the meaning of
section 1309.47(A)(l); and (xi) provisions of the Loan Documents which
purport to affect, alter or terminate the rights, estates or interests
held by third parties may not be enforceable.
D. The Notes and the Credit Agreement provide for the payment
of a premium or additional interest upon FURE's default. To the extent
that the prepayment provisions may be construed as liquidated damages,
which we believe such provisions may be construed to be, the
enforceability of such provisions will be based upon the economic
reasonableness of the provision. The determination of economic
reasonableness depends upon the particular facts and there are no
binding precedents. We therefore express no opinion as to the
enforceability of such provisions.
E. To the extent the Administrative Agent elects to proceed
under the UCC, the security interests created by the Mortgage are
subject to such limitations, exceptions and rights of purchasers and
creditors as are provided for under the provisions of Article 9 of the
UCC. Without limiting the foregoing, the opinions with respect to the
creation and perfection of the security interests in the Collateral are
subject to the following exceptions:
(i) in the case of non-identifiable cash proceeds,
perfection and continuation of perfection is limited to the
extent set forth in Ohio Revised Code Section 1309.25 (UCC
Section 9-306);
5
96
(ii) in the case of property which becomes Collateral
after the date the Mortgage is duly executed, delivered and
accepted, Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Bankruptcy Code
limits the extent to which property acquired by a debtor after
the commencement of a case under the United States Bankruptcy
Code may be subject to a security interest arising from a
security agreement entered into by the debtor before the
commencement of such case;
(iii) in the case of any Collateral, the
Administrative Agent's security interests will terminate upon
a disposition of such Collateral authorized by the
Administrative Agent;
(iv) in the case of any interest in or claim in or
under any policy of insurance covering the Collateral, the
Administrative Agent's security interests are limited to
proceeds payable to FURE (and not to any other party named as
loss payee under such policies) by reason of loss or damage to
the Collateral insured under insurance policies maintained by
FURE; and
(v) in the case of any Collateral consisting of goods
(as such term is defined in the UCC), the Administrative
Agent's security interests will terminate when such Collateral
is purchased by a "buyer in the ordinary course of business"
(as such term is defined in the UCC).
F. We express no opinion as to whether the enforceability of
certain remedial and other provisions of the Loan Documents may be
limited by implied covenants of good faith, fair dealing and
commercially reasonable conduct.
G. We express no opinion as to the priority of any liens or
security interests created by the Loan Documents or with respect to the
effect of subsequently filed financing statements on the priority of
any security interests perfected by the filing of the financing
statements
H. We have not inspected title to the Property and we express
no opinion as to such title nor to any interests in real or personal
property nor to the priority of any liens or security interests created
by the Loan Documents or the accuracy of the descriptions contained
therein, or the consequences of any inconsistency between or among the
descriptions attached to or otherwise included in the Loan Documents,
and we have assumed the accuracy of such descriptions as well as the
names and addresses of the record owners of such premises and property.
I. We express no opinion on the possible application of
various building codes, zoning ordinances, subdivision laws or
regulations, environmental laws and other similar statutes, ordinances,
codes and regulations affecting the construction, operation, use,
transferability and occupancy of the Property.
J. At least one Ohio court has denied the enforcement of both
a due-on-sale clause and a prepayment premium in the event of a loan
acceleration. Wide Scope. Inc. v. Freedom Federal Savings & Loan Assn.,
35 Ohio Misc. 2d 25 (Franklin Cty. 1987). We express no opinion as to
the enforceability of any prepayment premium provision when the
indebtedness evidenced by the Note is accelerated by reason of the
exercise of a due-on-sale provision.
K. Matters provided in the Loan Documents to be in the sole or
uncontrolled discretion of the Administrative Agent, or subject to the
exclusive judgment of the Administrative Agent, may be held by a court
to be subject to a standard of reasonableness in order to be
enforceable.
L. The Mortgage may not secure unpaid balances of loan
advances made after the Mortgage is filed of record unless such
advances are made within the provisions of Ohio Revised Code Section
5301.232 (Ohio's open-end mortgage statute).
M. The provisions of the Mortgage, the Assignment or any other
recorded Loan Documents that incorporate by reference the terms of
other documents that will not be recorded in the Recording Office may
not constitute constructive notice of such unrecorded documents to such
third parties.
6
97
N. With respect to the Environmental Indemnity, the Ohio
Supreme Court has not yet ruled on the enforceability of environmental
indemnification provisions such as those set forth in the Environmental
Indemnity. However, a recent federal appellate decision applying Ohio
law has upheld such indemnifications. AM INTERNATIONAL, INC. V.
INTERNATIONAL FORGING EQUIPMENT CORP., 982 F.2d 989 (6th Cir.
1993).
O. We express no opinion as to the enforceability of the
provisions of the Mortgage and the Assignment purporting to assign
rents in the absence of the Administrative Agent taking whatever action
is appropriate pursuant to applicable Ohio law to perfect its interest
in such rents. SEE IN RE XXX X. TISCHI, INC., 133 B.R. 857 (N.D. Ohio
1991); IN RE XXXXXX, 140 B.R. 926 (Bankr. D. Mass. 1992) (applying Ohio
law); IN RE XXXXXX, 133 B.R. 882 (Bankr. N.D. Ohio 1991) (security
interest in rents was adequately perfected by proper recording of
mortgage in county office, but mortgagee not entitled to rent payments
until the enforcement of assignment of rents is sought by mortgagee).
This opinion letter is being furnished only to the addresses and is
solely for their benefit and the benefit of their participants and assigns in
connection with the transactions contemplated by the Loan Documents. This
opinion letter may not be relied upon for any other purpose, or relied upon by
any other person, firm or corporation for any purpose, without our prior written
consent.
This opinion speaks only as of the date hereof, and we assume no
obligation to revise or supplement this opinion in the event of any amendment,
supplement or other modification of any of the Loan Documents or if the present
law of the State of Ohio or the present federal law of the United States is
changed by legislative action, judicial decision or otherwise.
Very truly yours,
7
98
EXHIBIT D-1
----------------------------
FORM OF
AMENDMENT TO MORTGAGE
(FAIRGROUNDS SQUARE MALL, READING, PENNSYLVANIA)
----------------------------
99
EXHIBIT D-2
----------------------------
FORM OF
AMENDMENT TO MORTGAGE
(55 PUBLIC SQUARE, CLEVELAND, OHIO)
----------------------------
100
EXHIBIT D-3
----------------------------
FORM OF
AMENDMENT TO MORTGAGE
(KANDI MALL, WILLMAR, MINNESOTA)
----------------------------
101
EXHIBIT D-4
----------------------------
FORM OF
AMENDMENT TO MORTGAGE
(CROSSROADS MALL, FT. DODGE, IOWA)
----------------------------
102
EXHIBIT D-5
----------------------------
FORM OF
AMENDMENT TO MORTGAGE
(XXXXXX XXXXXXX XXXXXXXXXX, XXXXXXXXX, XXXXXXX)
----------------------------
103
EXHIBIT D-6
----------------------------
FORM OF
AMENDMENT TO MORTGAGE
(BRIARWOOD APARTMENTS, FAYETTEVILLE, NORTH CAROLINA)
----------------------------
104
EXHIBIT D-7
----------------------------
FORM OF
MORTGAGE
(MALL 205)
----------------------------
105
EXHIBIT D-8
----------------------------
FORM OF
MORTGAGE
(MOUNTAINEER MALL)
----------------------------
106
EXHIBIT D-9
----------------------------
FORM OF
MORTGAGE
(WOODFIELD APARTMENTS)
----------------------------
107
EXHIBIT D-10
----------------------------
FORM OF
MORTGAGE
(WINDGATE APARTMENTS)
----------------------------
108
EXHIBIT D-11
----------------------------
FORM OF
MORTGAGE
(VALLEY MALL)
----------------------------
109
EXHIBIT E-1
----------------------------
FORM OF
AMENDMENT TO LEASE ASSIGNMENT
(FAIRGROUNDS SQUARE MALL, READING, PENNSYLVANIA)
----------------------------
110
EXHIBIT E-2
----------------------------
FORM OF
AMENDMENT TO LEASE ASSIGNMENT
(55 PUBLIC SQUARE, CLEVELAND, OHIO)
----------------------------
111
EXHIBIT E-3
----------------------------
FORM OF
AMENDMENT TO LEASE ASSIGNMENT
(KANDI MALL, WILLMAR, MINNESOTA)
----------------------------
112
EXHIBIT E-4
----------------------------
FORM OF
AMENDMENT TO LEASE ASSIGNMENT
(CROSSROADS MALL, FT. DODGE, IOWA)
----------------------------
113
EXHIBIT E-5
----------------------------
FORM OF
AMENDMENT TO LEASE ASSIGNMENT
(XXXXXX XXXXXXX XXXXXXXXXX, XXXXXXXXX, XXXXXXX)
----------------------------
114
EXHIBIT E-6
----------------------------
FORM OF
AMENDMENT TO LEASE ASSIGNMENT
(BRIARWOOD APARTMENTS, FAYETTEVILLE, NORTH CAROLINA)
----------------------------
115
EXHIBIT E-7
----------------------------
FORM OF
LEASE ASSIGNMENT
(MALL 205)
----------------------------
116
EXHIBIT E-8
----------------------------
FORM OF
LEASE ASSIGNMENT
(MOUNTAINEER MALL)
----------------------------
117
EXHIBIT E-9
----------------------------
FORM OF
LEASE ASSIGNMENT
(WOODFIELD APARTMENTS)
----------------------------
118
EXHIBIT E-10
----------------------------
FORM OF
LEASE ASSIGNMENT
(WINDGATE APARTMENTS)
----------------------------
119
EXHIBIT E-11
----------------------------
FORM OF
LEASE ASSIGNMENT
(VALLEY MALL)
----------------------------
120
EXHIBIT F
----------------------------
FORM OF
ENVIRONMENTAL INDEMNITY AGREEMENT
----------------------------
121
EXHIBIT G
----------------------------
FORM OF
ASSIGNMENT AGREEMENT
----------------------------
122
ASSIGNMENT AGREEMENT
DATE:_____________
Reference is made to the Credit Agreement described in Item 2 of Annex
I annexed hereto (as such Credit Agreement may hereafter be amended, modified or
supplemented from time to time, the "CREDIT AGREEMENT"). Unless defined in Annex
I attached hereto, terms defined in the Credit Agreement are used herein as
therein defined.
_____________ (the "ASSIGNOR") and ______________ (the "ASSIGNEE")
hereby agree as follows:
1. The Assignor hereby sells and assigns to the Assignee without
recourse and without representation or warranty (other than as expressly
provided herein), and the Assignee hereby purchases and assumes from the
Assignor, that interest in and to all of the Assignor's rights and obligations
under the Credit Agreement as of the date hereof which represents the percentage
interest specified in Item 4 of Annex I (the "ASSIGNED SHARE") of all of
Assignor's outstanding rights and obligations under the Credit Agreement
indicated in Item 4 of Annex I, including, without limitation, all rights and
obligations with respect to the Assigned Share of the Assignor's Commitment and
of the Loans, Unpaid Drawings and the Notes held by the Assignor. After giving
effect to such sale and assignment, the Assignee's Commitment will be as set
forth in Item 4 of Annex I.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any liens or security interests; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or the other Loan Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or the other Loan Documents or any other instrument or document
furnished pursuant thereto; and (iii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or any other Credit Party or the performance or observance by the
Borrower or any other Credit Party of any of its obligations under the Credit
Agreement or the other Loan Documents or any other instrument or document
furnished pursuant thereto.
3. The Assignee (i) represents and warrants that it is duly authorized
to enter into and perform the terms of this Assignment Agreement; (ii) confirms
that it has received a copy of the Credit Agreement and the other Loan
Documents, together with copies of the financial statements referred to therein
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment Agreement;
(iii) agrees that it will, independently and without reliance upon the
Administrative Agent, the Assignor or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement; (iv) appoints and authorizes the Administrative Agent to take such
action as agent on its behalf and to exercise such powers under the Credit
Agreement and the other Loan Documents as are delegated to the Administrative
Agent by the terms thereof, together with such powers as are reasonably
incidental thereto; [and] (v) agrees that it will perform in accordance with
their terms all of the obligations which by the terms of the Credit Agreement
are required to be performed by it as a Lender[; and (vi) to the extent legally
entitled to do so, attaches the forms described in section 4.4(b)(ii) of the
Credit Agreement(10).
4. Following the execution of this Assignment Agreement by the Assignor
and the Assignee, an executed original hereof (together with all attachments)
will be delivered to the Administrative Agent. The effective date of this
Assignment Agreement shall be the date of execution hereof by the Assignor, the
Assignee and the consent hereof by the Administrative Agent and the receipt by
the Administrative Agent of the administrative fee referred to in section
12.4(b) of the Credit Agreement, unless otherwise specified in Item 5 of Annex I
hereto (the "SETTLEMENT DATE").
--------
[FN]
10 If the Assignee is organized under the laws of a jurisdiction outside the
United States.
123
5. Upon the delivery of a fully executed original hereof to the
Administrative Agent, as of the Settlement Date, (i) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment
Agreement, have the rights and obligations of a Lender thereunder and under the
other Loan Documents and (ii) the Assignor shall, to the extent provided in this
Assignment Agreement, relinquish its rights and be released from its obligations
under the Credit Agreement and the other Loan Documents.
6. It is agreed that upon the effectiveness hereof, the Assignee shall
be entitled to (x) all interest on the Assigned Share of the Loans at the rates
specified in Item 6 of Annex I, (y) all Commitment Commission (if applicable) on
the Assigned Share of the Commitment at the rate specified in Item 7 of Annex I,
and (z) all Letter of Credit Fees (if applicable) on the Assignee's
participation in all Letters of Credit at the rate specified in Item 8 of Annex
I hereto, which, in each case, accrue on and after the Settlement Date, such
interest and, if applicable, Commitment Commission and Letter of Credit Fees, to
be paid by the Administrative Agent, upon receipt thereof from the Borrower,
directly to the Assignee. It is further agreed that all payments of principal
made by the Borrower on the Assigned Share of the Loans which occur on and after
the Settlement Date will be paid directly by the Agent to the Assignee. Upon the
Settlement Date, the Assignee shall pay to the Assignor an amount specified by
the Assignor in writing which represents the Assigned Share of the principal
amount of the respective Loans made by the Assignor pursuant to the Credit
Agreement which are outstanding on the Settlement Date, net of any closing
costs, and which are being assigned hereunder. The Assignor and the Assignee
shall make all appropriate adjustments in payments under the Credit Agreement
for periods prior to the Settlement Date directly between themselves on the
Settlement Date.
7. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF OHIO.
* * *
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
[NAME OF ASSIGNOR],
as Assignor
By____________________________
Title:
[NAME OF ASSIGNEE],
as Assignee
By_____________________________
Title:
2
124
Acknowledged and Agreed:
NATIONAL CITY BANK,
as Administrative Agent
By: ______________________________
Title:
125
ANNEX I
ANNEX FOR ASSIGNMENT AND ASSUMPTION AGREEMENT
ANNEX I
1. The Borrower: FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS
2. Name and Date of Credit Agreement:
Amended and Restated Credit Agreement, dated as of November 1, 1997,
among First Union Real Estate Equity and Mortgage Investments, First Union
Management, Inc., the Lenders from time to time party thereto, and National City
Bank, as Administrative Agent.
3. Date of Assignment Agreement:
_________ ___ 199
4. Amounts (as of date of item #3 above):
Commitments Loans
a. Aggregate Amount
for all Lenders $________ $_________
b. Assigned Share _________ __________%
c. Amount of Assigned
Share $_________ $________
5. Settlement Date:
_________ ___ 199
6. Rate of Interest
to the Assignee: As set forth in section 1.8 of the Credit
Agreement (unless otherwise agreed to by the
Assignor and the Assignee).(11)
----------
11 The Borrower and the Administrative Agent shall direct the entire
amount of the interest to the Assignee at the rate set forth in section
1.8 of the Credit Agreement, with the Assignor and Assignee effecting
any agreed upon sharing of interest through payments by the Assignee to
the Assignor.
126
7. Commitment
Commission: As set forth in section 3.1(a) of the Credit
Agreement (unless otherwise agreedto by the
Assignor and the Assignee)(12).
8. Letter of
Credit Fees: As set forth in section 3.1(b) of the Credit
Agreement (unless otherwise agreed to by the
Assignor and the Assignee)(13).
9. Notices:
ASSIGNOR:
_________
_________
_________
Attention:
Telephone No.:
Facsimile No.:
ASSIGNEE:
_________
_________
_________
Attention:
Telephone No.:
Facsimile No.:
--------
12 The Borrower and the Administrative Agent shall direct the entire
amount of the Commitment Commission to the Assignee at the rate set
forth in section 3.1(a) of the Credit Agreement, with the Assignor and
the Assignee effecting any agreed upon sharing of Commitment Commission
through payment by the Assignee to the Assignor.
13 The Borrower and the Administrative Agent shall direct the entire
amount of the Letter of Credit Fees to the Assignee at the rate set
forth in section 3.1(b) of the Credit Agreement, with the Assignor and
the Assignee effecting any agreed upon sharing of the Letter of Credit
Fees through payment by the Assignee to the Assignor.
2
127
10. Payment Instructions:
ASSIGNOR:
_________
_________
_________
ABA No.:
Account No.:
Reference:
Attention:
ASSIGNEE:
_________
_________
_________
ABA No.:
Account No.:
Reference:
Attention:
3
128
EXHIBIT H
SOLVENCY CERTIFICATE
I, the undersigned, the Chief Financial Officer of First Union Real
Estate Equity and Mortgage Investments, a real estate investment trust organized
and existing under the laws of the State of Ohio (the "BORROWER"), do hereby
certify on behalf of the Borrower that:
1. This Certificate is furnished pursuant to section 5.1(r) of the
Amended and Restated Credit Agreement, dated as of November 1, 1997, among the
Borrower, First Union Management, Inc., the financial institutions from time to
time party thereto (the "LENDERS"), and National City Bank, as Administrative
Agent (such Amended and Restated Credit Agreement, as in effect on the date of
this Certificate, being herein called the "CREDIT AGREEMENT"). Unless otherwise
defined herein, capitalized terms used in this Certificate shall have the
meanings set forth in the Credit Agreement.
2. For purposes of this Certificate, the terms below shall have the
following definitions:
(a) "FAIR VALUE"
The amount at which the assets, in their entirety, of
the Borrower would change hands between a willing buyer and a
willing seller, within a commercially reasonable period of
time, each having reasonable knowledge of the relevant facts,
with neither being under any compulsion to act.
(b) "PRESENT FAIR SALABLE VALUE"
The amount that could be obtained by an independent
willing seller from an independent willing buyer if the assets
of the Borrower are sold with reasonable promptness under
normal selling conditions for the sale of comparable business
enterprises in a current market.
(c) "NEW FINANCING"
The Indebtedness incurred or to be incurred by the
Borrower under the Loan Documents (assuming the full
utilization by the Borrower of the Commitments under the
Credit Agreement) and all other financings contemplated by the
Loan Documents, in each case after giving effect to the
Transaction.
(d) "STATED LIABILITIES"
The recorded liabilities (including contingent
liabilities that would be recorded in accordance with
generally accepted accounting principles ("GAAP")) of the
Borrower as of the date hereof after giving effect to the
consummation of the Transaction, determined in accordance with
GAAP consistently applied, together with the amount of all
Obligations.
(e) "IDENTIFIED CONTINGENT LIABILITIES"
The maximum estimated amount of liabilities
reasonably likely to result from pending litigation, asserted
claims and assessments, guaranties, uninsured risks and other
contingent liabilities of the Borrower after giving effect to
the Transaction (including all fees and expenses related
thereto but exclusive of such contingent liabilities to the
extent reflected in Stated Liabilities), as identified and
explained in terms of their nature and estimated magnitude by
responsible officers of the Borrower.
129
(f) "WILL BE ABLE TO PAY ITS STATED LIABILITIES, INCLUDING
IDENTIFIED CONTINGENT LIABILITIES, AS THEY MATURE"
For the period from the date hereof through the
Maturity Date, the Borrower will have sufficient assets and
cash flow to pay its Stated Liabilities and Identified
Contingent Liabilities as those liabilities mature or
otherwise become payable.
(g) "DOES NOT HAVE UNREASONABLY SMALL CAPITAL"
For the period from the date hereof through the
Maturity Date, the Borrower, after consummation of the
Transaction and all New Financing (including the Loans) being
incurred or assumed and Liens created by the Borrower in
connection therewith, is a going concern and has sufficient
capital to ensure that it will continue to be a going concern
for such period and to remain a going concern.
(h) "TRANSACTION"
The acquisition of the remaining 74% interest in the
joint venture incident to completion of the Marathon
Transaction.
3. For purposes of this Certificate, I, or officers of the Borrower
under my direction and supervision, have performed the following procedures as
of and for the periods set forth below.
(a) I have reviewed the financial statements of the Borrower
referred to in section 6.5 of the Credit Agreement.
(b) I have reviewed an unaudited PRO FORMA combined balance
sheet of the Borrower which gives effect to the Transaction
and the incurrence of any Indebtedness necessary to consummate
the Transaction.
(c) I have made inquiries of certain officials of the Borrower
who have responsibility for financial and accounting matters
regarding the existence and amount of Identified Contingent
Liabilities associated with the business of the Borrower.
(d) I have knowledge of and have reviewed to my satisfaction
the Loan Documents and the other documents relating to the
Transaction, and the respective Annexes, Schedules and
Exhibits thereto.
(e) With respect to Identified Contingent Liabilities, I:
1. inquired of certain officials of the Borrower who
have responsibility for legal, financial and accounting
matters as to the existence and estimated liability with
respect to all contingent liabilities associated with the
business of the Borrower; and
2. confirmed with officers of the Borrower, to the
best of such officers' knowledge, that (i) all appropriate
items were included in Stated Liabilities or Identified
Contingent Liabilities and that (ii) the amounts relating
thereto were the maximum estimated amount of liabilities
reasonably likely to result therefrom as of the date hereof;
and
3. hereby certify that, to the best of my knowledge,
all material Identified Contingent Liabilities that may arise
from any pending litigation, asserted claims and assessments,
guarantees, uninsured risks and other Identified Contingent
Liabilities of the Borrower, (exclusive of such Identified
Contingent Liabilities to the extent reflected in Stated
Liabilities) have been considered in making the certification
set forth in paragraph 4 below, and with respect to each such
Identified
2
130
Contingent Liability the estimable maximum amount of liability
with respect thereto was used in making such certification.
(f) I have made inquiries of certain officers of the Borrower
who have responsibility for financial reporting and accounting
matters regarding whether they were aware of any events or
conditions that, as of the date hereof, would cause the
Borrower after giving effect to the consummation of the
Transaction and the New Financing (including the making of
Loans under the Credit Agreement), to (i) have assets with a
Fair Value or Present Fair Salable Value that are less than
the sum of Stated Liabilities and Identified Contingent
Liabilities; (ii) have Unreasonably Small Capital; or (iii)
not be able to pay its Stated Liabilities and Identified
Contingent Liabilities as they mature or otherwise become
payable.
4. Based on and subject to the foregoing, I hereby certify on behalf of
the Borrower that, after giving effect to the consummation of the Transaction
and the New Financing (including the making of Loans under the Credit
Agreement), it is my opinion that (i) the Fair Value and Present Fair Salable
Value of the assets of the Borrower exceed its Stated Liabilities and Identified
Contingent Liabilities; (ii) the Borrower does not have Unreasonably Small
Capital; and (iii) the Borrower will be able to pay its Stated Liabilities and
Identified Contingent Liabilities as they mature or otherwise become payable.
IN WITNESS WHEREOF, I have hereto set my hand this ____ day of
_________ 1997.
FIRST UNION REAL ESTATE EQUITY
AND MORTGAGE INVESTMENTS
By:____________________________
Name:
Title:
3
131
EXHIBIT I
SECTION 4.4(b)(ii) CERTIFICATE
Reference is hereby made to the Amended and Restated Credit Agreement,
dated as of November 1, 1997, among First Union Real Estate Equity and Mortgage
Investments, First Union Management, Inc., the financial institutions party
thereto from time to time and National City Bank, as Administrative Agent (the
"CREDIT AGREEMENT"). Pursuant to the provisions of section 4.4(b)(ii) of the
Credit Agreement, the undersigned hereby certifies that it is not a "bank" as
such term is used in section 881(c)(3)(A) of the Internal Revenue Code of 1986,
as amended.
[NAME OF BANK]
By:_________________________________
Title:
Dated:__________
132
EXHIBIT J
----------------------------
FORM OF
COMPLIANCE CERTIFICATE
----------------------------
133
EXHIBIT K
----------------------------
FORM OF
SUBSIDIARY GUARANTY
----------------------------
134
================================================================================
U.S.$125,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF
NOVEMBER 1, 1997
AMONG
FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS
AS BORROWER
FIRST UNION MANAGEMENT, INC.
AS MANAGEMENT COMPANY
THE LENDING INSTITUTIONS NAMED THEREIN
AS LENDERS
KEYBANK NATIONAL ASSOCIATION
AS DOCUMENTATION AGENT
BANKERS TRUST COMPANY
AS SYNDICATION AGENT
AND
NATIONAL CITY BANK
AS ADMINISTRATIVE AGENT
================================================================================
135
TABLE OF CONTENTS
Page
----
SECTION 1. AMOUNT AND TERMS OF CREDIT.....................................1
1.1. Commitments..............................................1
1.2. Minimum Borrowing Amounts, etc...........................2
1.3. Notice of Borrowing......................................2
1.4. Disbursement of Funds....................................2
1.5. Notes....................................................3
1.6. Conversions..............................................3
1.7. Pro Rata Borrowings......................................3
1.8. Interest.................................................3
1.9. Interest Periods.........................................4
1.10. Increased Costs, Illegality, etc.........................4
1.11. Compensation.............................................6
1.12. Change of Lending Office; Replacement of Lenders.........6
SECTION 2. LETTERS OF CREDIT........................................7
2.1. Letters of Credit........................................7
2.2. Letter of Credit Requests: Notices of Issuance...........8
2.3. Agreement to Repay Letter of Credit Drawings.............8
2.4. Letter of Credit Participations..........................8
2.5. Increased Costs.........................................10
2.6. Obligations Absolute....................................10
SECTION 3. FEES; COMMITMENTS.......................................11
3.1. Fees....................................................11
3.2. Voluntary Reduction of Commitments......................12
3.3. Mandatory Termination of Commitments, etc...............12
3.4. Extension of Maturity Date..............................12
SECTION 4. PAYMENTS................................................12
4.1. Voluntary Prepayments...................................12
4.2. Mandatory Prepayments...................................13
4.3. Method and Place of Payment.............................14
4.4. Net Payments............................................14
SECTION 5. CONDITIONS PRECEDENT....................................15
5.1. Conditions Precedent at Closing Date....................15
5.2. Conditions Precedent to Certain Credit Events...........20
5.3. Conditions Precedent to All Credit Events...............21
SECTION 6. REPRESENTATIONS AND WARRANTIES..........................21
6.1. Organization, Existence.................................22
6.2. Due Authorization.......................................22
6.3. Enforceability of Documents.............................23
6.4. No Default..............................................23
6.5. Financial Statements....................................23
6.6. No Adverse Changes......................................24
6.7. Title to Assets.........................................24
6.8. Litigation..............................................24
6.9. No Materially Adverse Contracts.........................24
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6.10. Tax Returns...................................................................24
6.11. Contracts with Affiliates or Subsidiaries.....................................24
6.12. Employee Benefit Plans........................................................24
6.13. Governmental Regulation.......................................................25
6.14. Margin Stock; Use of Proceeds.................................................25
6.15. Disclosure....................................................................25
6.16. No Material Default...........................................................25
6.17. Environmental Conditions......................................................25
6.18. Licenses and Permits..........................................................26
SECTION 7. AFFIRMATIVE COVENANTS.........................................................26
7.1. Reports and Other Information.................................................26
7.2. Maintenance of Property; Insurance............................................28
7.3. Priority of Mortgages.........................................................28
7.4. Security Interests............................................................28
7.5. Maintenance of Existence......................................................29
7.6. Compliance with Laws..........................................................29
7.7. Notice of Litigation; Judgments...............................................29
7.8. Notice of Other Events........................................................30
7.9. Inspections...................................................................30
7.10. Payment of Taxes and Other Claims.............................................30
7.11. Payment of Indebtedness.......................................................31
7.12. Performance of Obligations Under the Loan Documents...........................31
7.13. Governmental Consents and Approvals...........................................31
7.14. Employee Benefit Plans and Guaranteed Pension Plans...........................31
7.15. Further Assurances............................................................32
7.16. Financial Covenants...........................................................32
7.17. Additional Mortgaged Properties; Substitute Mortgaged Properties..............33
7.18. Interest Rate and Currency Hedging............................................35
7.19. Tenant Estoppel Certificates and Subordination Agreements.....................36
7.20. Certain Subsidiaries to Join in Subsidiary Guaranty...........................36
SECTION 8. NEGATIVE COVENANTS............................................................37
8.1. Limitation on Nature of Business..............................................37
8.2. Limitation on Consolidation and Merger........................................37
8.3. Limitation on Distributions, Dividends and Return of Capital..................37
8.4. Acquisition of Margin Securities..............................................38
8.5. Limitation on Indebtedness....................................................38
8.6. Guarantees....................................................................40
8.7. Liens.........................................................................40
8.8. Sales of Assets, etc..........................................................42
8.9. Leasing of Eligible Real Estate...............................................42
8.10. Transactions with Affiliates..................................................42
8.11. Limitation on Certain Actions.................................................43
SECTION 9. EVENTS OF DEFAULT.............................................................43
9.1. Events of Default.............................................................43
9.2. Acceleration, etc.............................................................44
9.3. Remedies......................................................................45
9.4. Application of Liquidation Proceeds...........................................45
SECTION 10. DEFINITIONS AND TERMS.........................................................46
10.1. Certain Defined Terms.........................................................46
10.2. Accounting Terms..............................................................57
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10.3. Terms Generally............................................................58
10.4. Certain Financial References...............................................58
SECTION 11. THE ADMINISTRATIVE AGENT...................................................58
11.1. Appointment................................................................58
11.2. Delegation of Duties.......................................................58
11.3. Exculpatory Provisions.....................................................59
11.4. Reliance by Administrative Agent...........................................59
11.5. Notice of Default..........................................................59
11.6. Non-Reliance...............................................................59
11.7. Indemnification............................................................60
11.8. The Administrative Agent in Individual Capacity............................60
11.9. Successor Administrative Agent.............................................60
11.10. Other Agents...............................................................60
SECTION 12. MISCELLANEOUS..............................................................61
12.1. Payment of Expenses etc....................................................61
12.2. Right of Setoff............................................................61
12.3. Notices....................................................................61
12.4. Benefit of Agreement.......................................................62
12.5. No Waiver: Remedies Cumulative.............................................63
12.6. Payments Pro Rata..........................................................63
12.7. Calculations: Computations.................................................64
12.8. Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury Trial.....64
12.9. Counterparts...............................................................65
12.10. Effectiveness..............................................................65
12.11. Headings Descriptive.......................................................65
12.12. Amendment or Waiver........................................................65
12.13. Survival...................................................................65
12.14. Domicile of Loans..........................................................65
12.15. Confidentiality............................................................66
12.16. Lender Register............................................................66
12.17. Limitations on Liability of the Letter of Credit Issuers...................66
12.18. General Limitation of Liability............................................66
12.19. No Duty....................................................................67
12.20. Lenders and Agent Not Fiduciary to Credit Parties, etc.....................67
12.21. Survival of Representations and Warranties.................................67
12.22. Limitation on Enforcement of Security Documents............................67
12.23. Liability of Borrower's Trustees, etc......................................67
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ANNEXES TO CREDIT AGREEMENT
ANNEX I - INFORMATION AS TO LENDERS
ANNEX II - INFORMATION AS TO SUBSIDIARIES
ANNEX III - LIST OF INITIAL MORTGAGED PROPERTIES, MARKET CONSTANTS
AND COVERAGE FACTORS
ANNEX IV - DESCRIPTION OF CERTAIN PROPERTY DISPOSITIONS
ANNEX V - DESCRIPTION OF CERTAIN LITIGATION
ANNEX VI - LIST OF CERTAIN EMPLOYEE BENEFIT PLANS AND
GUARANTEED PENSION PLANS
ANNEX VII - DESCRIPTION OF CERTAIN MATERIAL AGREEMENTS
ANNEX VIII - DESCRIPTION OF INDEBTEDNESS FOR BORROWED MONEY,
INCLUDING THAT OWED TO THE BORROWER BY AFFILIATES
ANNEX IX - DESCRIPTION OF LETTERS OF CREDIT
DEEMED ISSUED UNDER THE CREDIT AGREEMENT
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EXHIBITS TO CREDIT AGREEMENT
EXHIBIT A-1 - FORM OF NOTICE OF BORROWING
EXHIBIT A-2 - FORM OF LETTER OF CREDIT REQUEST
EXHIBIT B - FORM OF NOTE
EXHIBIT C - FORM OF OPINION OF SPECIAL COUNSEL TO THE BORROWER
EXHIBIT D-1 - FORM OF AMENDMENT TO MORTGAGE (Fairgrounds Square Mall,
Reading, Pennsylvania)
EXHIBIT D-2 - FORM OF AMENDMENT TO MORTGAGE (55 Public Square, Cleveland, Ohio)
EXHIBIT D-3 - FORM OF AMENDMENT TO MORTGAGE (Kandi Mall, Willmar, Minnesota)
EXHIBIT D-4 - FORM OF AMENDMENT TO MORTGAGE (Crossroads Mall, Ft. Dodge, Iowa)
EXHIBIT D-5 - FORM OF AMENDMENT TO MORTGAGE (Xxxxxx Xxxxxxx Xxxxxxxxxx,
Xxxxxxxxx, Xxxxxxx)
EXHIBIT D-6 - FORM OF AMENDMENT TO MORTGAGE (Briarwood Apartments,
Fayetteville, North Carolina)
EXHIBIT D-7 - FORM OF MORTGAGE (Mall 205)
EXHIBIT D-8 - FORM OF MORTGAGE (Mountaineer Mall, Xxxxxx County, West Virginia)
EXHIBIT D-9 - FORM OF MORTGAGE (Woodfield Apartments)
EXHIBIT D-10 - FORM OF MORTGAGE (Windgate Apartments)
EXHIBIT D-11 - FORM OF MORTGAGE (Valley Mall)
EXHIBIT E-1 - FORM OF AMENDMENT TO LEASE ASSIGNMENT (Fairgrounds Square Mall,
Reading, Pennsylvania)
EXHIBIT E-2 - FORM OF AMENDMENT TO LEASE ASSIGNMENT (55 Public Square,
Cleveland, Ohio)
EXHIBIT E-3 - FORM OF AMENDMENT TO LEASE ASSIGNMENT (Kandi Mall,
Willmar, Minnesota)
EXHIBIT E-4 - FORM OF AMENDMENT TO LEASE ASSIGNMENT (Crossroads Mall,
Ft. Dodge, Iowa)
EXHIBIT E-5 - FORM OF AMENDMENT TO LEASE ASSIGNMENT (Xxxxxx Xxxxxxx Xxxxxxxxxx,
Xxxxxxxxx, Xxxxxxx)
EXHIBIT E-6 - FORM OF AMENDMENT TO LEASE ASSIGNMENT (Briarwood Apartments,
Fayetteville, North Carolina)
EXHIBIT E-7 - FORM OF LEASE ASSIGNMENT (Mall 205)
EXHIBIT E-8 - FORM OF LEASE ASSIGNMENT (Mountaineer Mall, Xxxxxx County, West
Virginia)
EXHIBIT E-9 - FORM OF LEASE ASSIGNMENT (Woodfield Apartments)
EXHIBIT E-10 - FORM OF LEASE ASSIGNMENT (Windgate Apartments)
EXHIBIT E-11 - FORM OF LEASE ASSIGNMENT (Valley Mall)
EXHIBIT F - FORM OF ENVIRONMENTAL INDEMNITY AGREEMENT
EXHIBIT G - FORM OF ASSIGNMENT AGREEMENT
EXHIBIT H - FORM OF SOLVENCY CERTIFICATE
EXHIBIT I - FORM OF SECTION 4.4(b)(ii) CERTIFICATE
EXHIBIT J - FORM OF COMPLIANCE CERTIFICATE
EXHIBIT K - FORM OF SUBSIDIARY GUARANTY
vi
