$61,925,000
CREDIT AGREEMENT
dated as of December 31, 1999
among
UNITED CAPITAL CORP., as Borrower,
and
FLEET BANK, NATIONAL ASSOCIATION,
MANUFACTURERS & TRADERS TRUST COMPANY,
and BANK LEUMI USA
and
FLEET BANK, NATIONAL ASSOCIATION, as Agent
CREDIT AGREEMENT (the "Agreement") dated as of December 31,
1999, among UNITED CAPITAL CORP., a corporation organized under the laws of the
State of Delaware (the "Borrower") and FLEET BANK, NATIONAL ASSOCIATION, a
national bank organized under the laws of the United States of America
("Fleet"), MANUFACTURERS & TRADERS TRUST COMPANY, ("M&T"); BANK LEUMI USA
("Leumi"; collectively with FLEET and M&T the "Banks"); FLEET BANK, NATIONAL
ASSOCIATION, as administrative agent for the banks (in such capacity, the
"Agent").
The Borrower desires each of the Banks to extend credit to the
Borrower and the Banks are willing to extend such credit on the terms and
conditions set forth herein.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1.
DEFINITIONS; ACCOUNTING TERMS.
Section 1.1 Definitions. As used in this Agreement the
following terms have the following meanings (terms defined in the singular to
have a correlative meaning when used in the plural and vice versa):
"Acquisition" means any transaction pursuant to which the
Borrower or any of the Guarantors (a) acquires, or enters into an agreement to
acquire, equity securities (or warrants, options or other rights to acquire such
securities) of any Person which is not then a Subsidiary of the Borrower,
pursuant to a solicitation of tenders therefor, or in one or more negotiated
block, market or other transactions not involving a tender offer, or a
combination of any of the foregoing or (b) makes, or enters into any agreement
to make, any Person not then a Subsidiary of the Borrower, or causes any such
Person to be merged into the Borrower or any of the Guarantors, or vice versa in
any case pursuant to a merger, purchase of assets or any reorganization
providing for the delivery or issuance to the holders of such Person's then
outstanding securities, in exchange for such securities, of cash or securities
of the Borrower or any of the Guarantors, or a combination thereof, or (c)
purchases, or enters into an agreement to purchase, all or substantially all of
the business or assets of any Person. For purposes hereof, the term
"Acquisition" shall include any transaction in which the Borrower or any of its
Subsidiaries makes a loan or otherwise extends credit secured by an interest in
real property. For purposes hereof, the term "Acquisition" shall not include the
formation by the Borrower or any of the Guarantors of a new Subsidiary that does
not involve any of the transactions referred to in the immediately preceding
sentence.
"Additional Costs" shall have the meaning given to such term
in Section 4.2 hereof.
"Administrative Fee" means the agency fee payable by the
Borrower to the Agent pursuant to Section 3.5 hereof.
"Affiliate" means, with respect to any Person, any other
Person: (a) which directly or indirectly controls, or is controlled by, or is
under common control with, such Person; (b) which directly or indirectly
beneficially owns or holds 25% or more of any class of voting stock of such
Person; (c) 25% or more of the voting stock or other voting interests of which
is directly
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or indirectly beneficially owned or held by such Person; (d) which is a
partnership in which such Person is a general partner; (e) which is a limited
liability company in which such Person is a member and in which such Person
owns, directly or indirectly, 25% of the equity of such Person. The term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract, or otherwise.
"Aggregate Outstandings" means, at a particular time, the sum
of Aggregate Revolving Credit Outstandings and Aggregate Term Loan Outstandings.
"Aggregate Revolving Credit Outstandings" means, at a
particular time, the aggregate outstanding principal amount of Revolving Credit
Loans at such time.
"Aggregate Term Loan Outstandings" means, at a particular
time, the aggregate outstanding principal amount of Term Loans at such time.
"Agreement" means this Agreement, as amended or supplemented
from time to time pursuant to the terms hereof. References to Articles,
Sections, Exhibits, Schedules and the like refer to the Articles, Sections,
Exhibits, Schedules and the like of this Agreement unless otherwise indicated.
"Amortization" means amortization as determined or calculated
in accordance with GAAP.
"Assignment" means each Assignment of Leases and Rents dated
the date hereof and executed by the Borrower or a Guarantor in favor of the
Banks hereunder.
"Banking Day" means any day on which commercial banks are not
authorized or required to close in New York City, provided that whenever such
day relates to a LIBOR Loan or notice with respect to any LIBOR Loan, such term
shall mean any such day on which dealings in Dollar deposits are also carried
out in the London interbank market.
"Base Rate" means the rate of interest determined by the Agent
to be the higher of (i) Federal Funds Rate plus 1/2of 1% per annum or (ii) the
Prime Rate.
"Base Rate Loan" means any Loan when and to the extent that
the interest rate for such loan is determined on the basis of the Base Rate.
"Borrowing Base" means, at any time, the sum of (i) the Real
Estate Borrowing Base plus (ii) the Non-Real Estate Borrowing Base.
"Borrowing Base Certificate " means a certificate signed by
the Chief Executive Officer or the Chief Financial Officer of the Borrower in
the form of Exhibit "B" annexed hereto with such changes as the Banks may
require from time to time.
"Capital Expenditures" means the sum of (a) expenditures for
any fixed assets or improvements, replacements, substitutions, or additions
thereto which would be treated as capital expenditures in accordance with GAAP
and (b) the portion of all payments with respect to
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Capital Leases which are required to be capitalized on the balance sheet of the
lessee in accordance with GAAP.
"Capitalization Value" means, at the time of calculation, (i)
annualized and normalized actual year to date Consolidated EBITDA capitalized at
10% plus (ii) cash and cash equivalents on a consolidated basis plus (iii)
aggregate acquisition costs for real properties of the Borrower and the
Guarantors, subject to the provisions of the last sentence hereof. For purposes
hereof, "acquisition costs" for any real property shall mean the contractual
purchase price for such property and such closing costs as are customarily paid
by purchasers in real estate transactions. For purposes hereof, clause (iii)
shall include acquisition costs for any property only until such property has
been owned by the Borrower or any Guarantor for one full fiscal quarter.
"Capital Lease" means any lease which is required to be
capitalized on the balance sheet of the lessee in accordance with GAAP.
"Change in Control" means any event or condition which results
in any Person or "group" other than a Person or group that is actively involved
in the day to day management of the Borrower and the Guarantors on the date of
this Agreement: (i) having acquired beneficial ownership of 35% or more of any
outstanding class of capital stock of the Borrower or any Guarantor having
ordinary voting power in the election of directors of the Borrower or such
Guarantor or (ii) obtaining the power (whether or not exercised) to elect a
majority of the directors of the Borrower or any Guarantor; provided, however,
that any transfer from any Person that is actively involved in the day to day
management of the Borrower and the Guarantors on the date of this Agreement to
any Person in his or her immediate family shall not constitute a "Change in
Control" if the Banks continue to be satisfied, in their sole discretion, with
the management of the Borrower and the Guarantors after such transfer.
"Closing Date" means the date this Agreement has been executed
by the Borrower and each of the Banks.
"Closing Fee" means the syndication fee payable by the
Borrower to the Agent for the benefit of the Banks pursuant to Section 3.6
hereof.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Commitment" means with respect to each Revolving Credit
Lender, the obligation of such Revolving Credit Lender to extend Revolving
Credit Loans to the Borrower pursuant to Article 2 hereof and, subject to the
terms hereof, in the following aggregate amounts as such amounts may be reduced
in accordance with the terms of this Agreement:
Fleet $25,000,000
M&T $30,000,000
Leumi $ 5,000,000
"Commitment Fee" means the commitment fee payable by the
Borrower to each of the Revolving Credit Lenders pursuant to Section 3.4 hereof.
"Commitment Proportion" means, with respect to each Revolving
Credit Lender at the time of determination, that proportion that its Commitment
bears to the Total Commitment.
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"Consolidated Debt Service" means, for any fiscal period,
interest expense (accrued, paid or capitalized) plus scheduled principal
amortization (excluding balloon payments due at maturity) on all (a)
Indebtedness of the Borrower and the Guarantors, on a consolidated basis, and
(b) the Borrower's and the Guarantor's pro rata share of Indebtedness from
unconsolidated joint ventures other than non-recourse Indebtedness on properties
owned by such ventures.
"Consolidated EBITDA" means, for any fiscal period,
Consolidated Net Income of the Borrower and the Guarantors, before provision for
federal and state income taxes, minus all extraordinary gains; plus (i)
Consolidated Interest Expense; plus (ii) Depreciation and Amortization plus
(iii) cash distributions (after debt service) from unconsolidated joint ventures
to the Borrower and the Guarantors, all on a consolidated basis, and all as
determined in accordance with GAAP.
"Consolidated Interest Expense" means, for a particular
period, the consolidated interest expense (accrued, paid or capitalized) of the
Borrower and the Guarantor as reflected in the Borrower's and Guarantors'
consolidated financial statements for such period and calculated in accordance
with GAAP and shall in any event include, without limitation, (i) the
amortization of debt discounts, (ii) the amortization of all fees payable in
connection with the incidence of Indebtedness, and (iii) the portion of any
Capital Lease obligation allocable to interest expense plus the Borrower's and
the Guarantors' pro rata share of interest expense on Indebtedness from
unconsolidated joint ventures, other than non-recourse Indebtedness on
properties owned by such ventures.
"Consolidated Net Income" means, for a particular period, the
consolidated net income of the Borrower and the Guarantors for such period
determined in accordance with GAAP.
"Default" means any event which with the giving of notice or
lapse of time, or both, would become an Event of Default.
"Default Rate" means a rate per annum equal to 2% above the
rate of interest that would then be applicable to Base Rate Loans under this
Agreement.
"Depreciation" means depreciation as determined or calculated
in accordance with GAAP.
"Dividends" means, for any period, dividends paid by the
applicable Person.
"Dollars" and the sign "$" mean lawful money of the United
States of America.
"Eligible Inventory" means, on a combined basis for the
Operating Companies, the gross amount of the inventory less the following items:
any packaging materials and supplies, supplies (other than supplies held for
sale), damaged or unsalable goods, damaged or unsalable goods returned or
rejected by such entities' customers; obsolete goods; goods to be returned to
such entities' suppliers; goods in transit to third parties; consigned
inventory. In no event shall the aggregate value of inventory located outside of
the United States and included as "Eligible Inventory" exceed $1,000,000 at any
time.
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"Eligible Properties" means, at any time, (a) those properties
(other than hotel properties as to which clause (b) shall apply) of the Borrower
and of the Guarantors which are leased to non-affiliated third parties and which
are (i) unencumbered capitalized at 10.5% or (ii) encumbered by Liens securing
debt of less than 30% of the annualized and normalized year-to-date Net
Operating Income for such property capitalized at 12.0% and (b) those hotel
properties of the Borrower which are unencumbered. The term "Eligible
Properties" shall exclude (i) encumbered properties for which annualized and
normalized actual year to date Net Operating Income capitalized at 10.5% is less
than or equal to $0, (ii) encumbered properties for which annualized and
normalized actual year to date Net Operating Income capitalized at 12.0% is less
than or equal to $0 or (iii) unencumbered hotel properties for which annualized
and normalized actual year to date Net Operating Income minus the FF&E Reserve
capitalized at 10.5% is less than or equal to $0. In addition, "Eligible
Properties" must be (i) wholly-owned by the Borrower or a Guarantor in fee, (ii)
must be free of environmental or structural defects, (iii) must be at least 70%
leased; (iv) must not have rents more than 90 days past due, and (v) must not
have lessees subject to bankruptcy proceedings. The Agent shall have the right
to conduct, at the Borrower's expense (subject to the aggregate limitations
specified in Section 7.7(b)), a site inspection of any property before such
property is included as an "Eligible Property" hereunder. As of the date hereof,
"Eligible Properties" shall mean those properties listed on Schedule 1.1(a)
hereto. In no event will mortgage loans or any similar transactions between the
Borrower or any Guarantor and any third party constitute an "Eligible Property".
"Eligible Property EBITDA" means, for any fiscal period, net
income, on a combined basis, for the Eligible Properties before provision for
federal or state income taxes minus all extraordinary gains; plus interest
expense for the Eligible Properties, plus Depreciation and Amortization
attributable to the Eligible Properties, all on a combined basis and all as
determined in accordance with GAAP. For purposes hereof, Eligible Properties
with EBITDA of less than $0 will be assigned a value of $0.
"Eligible Receivables" means, on a combined basis, the amount
of the accounts receivable of the Operating Companies arising out of sales in
the ordinary course of business of the Operating Companies net of any credits,
rebates or off-sets owed by the Operating Companies to the respective account
debtor and net of any commissions payable by the Operating Companies to third
parties, which accounts receivable are not in dispute or subject to credit,
allowance, defense, off-set, counterclaim or adjustment and for which records
are maintained at a location of the Operating Companies in the United States;
provided, however, that the following items shall not be deemed Eligible
Receivables: credit balances over 90 days' from invoice date; contra accounts
receivable; receivables owing from account debtors determined by the Agent in
its sole discretion to be unacceptable for credit reasons; receivables from
Affiliates; accounts receivable with respect to which the account debtor is
subject to any bankruptcy or insolvency proceeding; accounts receivable where
the account debtor's obligation to pay is conditional or subject to a repurchase
obligation or right of return; and all current receivables due from account
debtors of which more than 50% of the total accounts receivable from such
debtors is more than 90 days from invoice date.
"Environmental Indemnity Agreement" means that certain
environmental indemnity agreement substantially in the form of Exhibit C annexed
hereto, dated the date hereof, and executed by the Borrower and each of the
Guarantors in favor of the Banks and their respective directors, officers,
employees, affiliates, agents or other representatives.
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"Environmental Laws" means any and all federal, state, local
and foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes into the
environment, including, without limitation, ambient air, surface water, ground
water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, chemicals, or industrial, toxic substances or
Hazardous Substances or wastes.
"Equity Value" means Capitalization Value less Total Adjusted
Outstanding Funded Indebtedness.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, including any rules and regulations
promulgated thereunder.
"ERISA Affiliate" means any corporation or trade or business
which is a member of the same controlled group of corporations (within the
meaning of Section 414(b) of the Code) as the Borrower or is under common
control (within the meaning of Section 414(c) of the Code) with the Borrower.
"Event of Default" shall have the meaning given such term in
Section 10.01 hereof.
"Eurocurrency Reserve Requirements" means, with respect to
each Interest Period for each LIBOR Loan, the aggregate (without duplication) of
the maximum rates (expressed as a percentage and rounded upward, if necessary,
to the nearest 1/100 of 1%) of reserve requirements current on the date two
Banking Days prior to the beginning of such Interest Period (including, without
limitation, basic, supplemental, marginal and emergency reserves under
Regulation D or any other regulations of the Board of Governors of the Federal
Reserve System or other governmental authority having jurisdiction with respect
thereto), as now and/or from time to time hereafter in effect, dealing with
reserve requirements prescribed for eurocurrency funding maintained by a member
bank of such system.
"Existing Bank Debt" means Indebtedness of the Borrower
existing on the date hereof and arising pursuant to the terms of that Credit
Agreement, dated as of January 15, 1997 between the Borrower and Fleet as such
document may have been amended, supplemented or modified through the date
hereof.
"Facility Documents" means this Agreement, the Notes, the
Guarantees, the Assignments, the Security Agreements and all other agreements,
documents and instruments executed in connection herewith or therewith
including, but not limited to, all documents and instruments executed by the
Borrower or any Guarantor, at any time, in favor of any Bank in connection with
this Agreement and the Loans made hereunder.
"Federal Funds Rate" means, for any day, the rate per annum
equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal
7
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Banking Day, for the next preceding Banking Day) by the
Federal Reserve Bank of New York, or, if such rate is not so announced or
published for any day which is a Banking Day, the average of quotations for the
day of such transactions received by the Agent from three federal funds brokers
of recognized standing selected by it.
"FF&E Reserve" means, with respect to any hotel property, the
greater of (i) actual expenditures for replacement of capital items of
furniture, fixtures and equipment and (ii) 4% of gross revenues of such hotel
from all sources.
"Forfeiture Proceeding" means the commencement of any action
or proceeding affecting the Borrower or any of the Guarantors before any court,
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, which would result in the seizure or forfeiture of any of
their property and thus cause a material adverse effect upon the operations,
business, properties or financial condition of the Borrower or any Operating
Company or of the Borrower and the Guarantors, taken as a whole.
"GAAP" means generally accepted accounting principles in the
United States of America, as in effect from time to time, consistently applied
with respect to the financial statements of the Borrower, the Guarantors, and
Affiliates of any Guarantor which are the subject of Section 6.5 hereof.
"Guarantees" means the guarantees to be delivered on the
Closing Date to the Banks by each of the Guarantors, and the guarantees to be
delivered to the Banks from time to time hereafter by Persons that become
Guarantors subsequent to the Closing Date, all in the form(s) attached hereto as
Exhibit D.
"Guarantors" means each of the parties listed on Schedule 5.
1(a) hereto and all Post-Closing Guarantors.
"Hazardous Substance" or "Hazardous Substances" means any
material, including, without limitation, raw, processed or waste by-product
materials, which in itself or as found or used, is toxic, noxious or harmful to
the health or safety of human or animal life or vegetation, regardless of
whether such material be found on or below the surface of the ground, in any
surface or underground water, or airborne in ambient air or in the air inside of
any structure built or located upon or below the surface of the ground, or in
any machinery, equipment or inventory located or used in any such structure,
including, but in no event limited to, all hazardous materials, hazardous
wastes, toxic substances, infectious wastes, pollutants and contaminants from
time to time defined or classified as such under any Environmental Law,
regardless of the quantity found, used, manufactured or removed from a given
location.
"Indebtedness" means, without duplication, with respect to any
Person, (a) all obligations of such Person for borrowed money or with respect to
deposits or advances made to it of any kind, (b) all obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments, (c) all
obligations of such Person for the deferred purchase price of property or
services, (d) all obligations of such Person under conditional sale or other
title retention agreements relating to property purchased by such Person, (e)
all payment obligations of such Person with respect to interest rate or currency
protection agreements, (f) all obligations of such
8
Person as an account party under any letter of credit or in respect of bankers'
acceptances, (g) all obligations of any third party secured by property or
assets of such Person (regardless of whether or not such Person is liable for
repayment of such obligations), (h) all guarantees of such Person and (i) the
redemption price of all redeemable preferred stock (or similar securities) of
such Person, but only to the extent that such stock is redeemable at the option
of the holder or requires sinking fund or similar payments at any time prior to
the Termination Date.
"Interest Period" means the period commencing on the date of
making, renewal or conversion of a Loan to a LIBOR Loan and expiring one, two,
three or six months (as available) thereafter, as designated by the Borrower in
the notice given to the Agent under Section 2.4 hereof; provided that:
(a) the initial Interest Period for any LIBOR Loan shall
commence on the date of the making of such Loan (including the date of any
conversion from a Base Rate Loan) and each Interest Period occurring thereafter
in respect of such Loan shall commence on the date on which the next preceding
Interest Period expires;
(b) if any Interest Period would otherwise expire on a day
which is not a Banking Day, such Interest Period shall expire on the next
succeeding Banking Day, provided, however, that if any Interest Period would
otherwise expire on a day which is not a Banking Day but is a day of a calendar
month after which no further Banking Day occurs (in such month), such Interest
Period shall expire on the next preceding Banking Day;
(c) no Loan shall be continued as or converted to a LIBOR Loan
if at the time of any such continuation or conversion a Default or an Event of
Default exists; and
(d) no Interest Period for a Loan shall extend beyond the
Termination Date.
"Lending Office" means, for each Bank, the lending office of
such Bank (or of an affiliate of such Bank) designated as such on its signature
page hereof or such other office of such Bank (or of an affiliate of such Bank)
as such Bank may from time to time specify to the Borrower as the office by
which its Loans are to be made and maintained.
"LIBOR" means, for any LIBOR Loan, the rate per annum (rounded
upward, if necessary, to the nearest 1/32 of one percent) as determined on the
basis of the offered rates for deposits in U.S. dollars, for a period of time
equal to the requested Interest Period which appears on the Telerate page 3750
as of 11:00 a.m. London time on the day that is two Banking Days preceding the
first day of such LIBOR Loan; provided, however, if the rate described above
does not appear on the Telerate System on any applicable interest determination
date, the LIBOR rate shall be the rate (rounded upwards as described above, if
necessary) for deposits in dollars for a period substantially equal to the
Interest Period on the Reuters Page `LIBO" (or such other page as may replace
the LIBO Page on that service for the purpose of displaying such rates), as of
11:00 a.m. (London Time), on the day that is two (2) Banking Days prior to the
beginning of such Interest Period. If both the Telerate and Reuters systems are
unavailable, then the rate for that date will be determined on the basis of the
offered rates for deposits in U.S. dollars for a period equal to the requested
Interest Period which are offered by four major banks in the London interbank
market at approximately 11:00 a.m. London time, on the day that is two Banking
Days preceding the first day of such LIBOR Loan as selected by the Agent. The
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principal London office of each of the four major London banks will be requested
to provide a quotation of its U.S. dollar deposit offered rate. If at least two
such quotations are provided, the rate for that date will be the arithmetic mean
of the quotations. If fewer than two quotations are provided as requested, the
rate for that date will be determined on the basis of the rates quoted for loans
in U.S. dollars to leading European banks for a period of time equal to the
requested Interest Period offered by major banks in New York City at
approximately 11:00 a.m. New York City time, on the day that is two Banking Days
preceding the first day of such LIBOR Advance. In the event that Agent is unable
to obtain any such quotation as provided above, it will be deemed that LIBOR
cannot be determined.
"LIBOR Loan" means any Loan when and to the extent the
interest rate therefor is determined on the basis of Reserve Adjusted LIBOR
Rate.
"Lien" means any mortgage, pledge, security interest,
hypothecation, assignment, deposit arrangement, encumbrance, or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, any conditional sale or other
title retention agreement, any financing lease having substantially the same
economic effect as any of the foregoing, and the filing of any financing
statement under the Uniform Commercial Code or comparable law of any
jurisdiction).
"Loan" means any Revolving Credit Loan or any Term Loan.
"Margin" means, (i) with respect to LIBOR Loans, that are
Revolving Credit Loans, two percent (2.00%) per annum, and (ii) with respect to
LIBOR Loans that are Term Loans, 1.40% per annum.
"Multiemployer Plan" means a Plan defined as such in Section
400(a)(3) of ERISA to which contributions have been made by the Borrower or any
ERISA Affiliate and which is covered by Title IV of ERISA.
"Net Operating Income" means, with respect to any parcel of
real property, the rents received by the Borrower or any Guarantor with respect
thereto less any expenses of such Borrower or Guarantor with respect to such
property which are ordinary expenses and are not capitalized expenses, excluding
Depreciation, Amortization, income taxes and debt service.
"Non-Real Estate Borrowing Base" means, at any time, the
lesser of (i) $10,000,000 and (ii) the sum of 75% of Eligible Receivables and
50% of Eligible Inventory.
"Notes" means collectively the Revolving Credit Notes and the
Term Notes.
"Obligations" means all of the obligations of the Borrower or
any Guarantor to the Banks under or in relation to this Agreement, the Notes,
any Loans, or any of the other Facility Documents, as such agreements, documents
and instruments are originally executed or as modified, amended, restated,
supplemented or extended from time to time, and all obligations of the Borrower
or any Guarantor to the Banks arising out of any extension, refinancing or
refunding of any of the foregoing obligations, whether such obligations are now
existing or hereafter acquired or arising, direct or indirect, joint or several,
absolute or contingent, due or to become due, matured or unmatured, liquidated
or unliquidated, arising by contract, operation of law or otherwise.
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"Operating Companies" means the Borrower's subsidiaries,(i)
Metex Mfg. Corp. a New York corporation, (ii) AFP Transformers LLC, a Delaware
limited liability company and (iii) any Subsidiary of the Borrower which is or
may hereafter be engaged in any business other than holding Real Estate Assets
and which has assets having a value in excess of $100,000. Notwithstanding the
foregoing, the term "Operating Companies" shall not include the following
entities provided that they continue to engage in substantially the same
business as they are engaged in on the date hereof: Metex International Sales
Corp., Metex Enviroco Corp., and Metex Europe S.A.R.L.
"PBGC" means the Pension Benefit Guaranty Corporation and any
entity succeeding to any or all of its functions under ERISA.
"Permitted Investments" means any of the following
investments: (i) obligations issued or guaranteed by states or municipalities
within the United States of America; (ii) obligations issued or guaranteed by
the United States of America or any agency or subdivision thereof; (iii)
certificates of deposit, time deposits, Eurodollar certificates of deposit,
bankers acceptances and other "money market instruments" issued by any Bank or
any other bank, trust company or financial institution organized under the laws
of the United States of America or any state thereof (or, in the case of
Eurodollar certificates of deposit, a branch of any such bank, trust company or
financial institution) having capital and surplus in an aggregate amount not
less than $1,000,000,000; (iv) commercial paper rated at least Prime-1 by
Xxxxx'x Investors Service, Inc. or A-1 by Standard & Poors Corporation; (v)
securities issued by money market funds with assets of $2,500,000,000 or more;
(vi) investments existing on the Closing Date and described on Schedule I
hereto; and (vii) repurchase agreements with a term of not more than seven days
entered into with any bank, trust company or financial institution organized
under the laws of the United States of America or any state thereof having
capital and surplus in an aggregate amount not less than $1,000,000,000 and
relating to any of the obligations referred to in clauses (i), (ii), (iii)
above; in each case maturing or being due or payable in full not more than one
year after the acquisition thereof such entity.
"Permitted Liens" means those certain Liens defined in Section
8.2 hereof.
"Person" means an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated association, joint
venture, governmental authority or other entity of whatever nature.
"Plan" means any employee benefit or other plan established or
maintained, or to which contributions have been made, by the Borrower or any
ERISA Affiliate and which is covered by Title IV of ERISA or to which Section
412 of the Code applies provided that such term shall not include plans
terminated prior to the date hereof except to the extent of Unfunded Vested
Liabilities.
"Post-Closing Guarantor" means each Subsidiary of the Borrower
or of any Guarantor which is created after the date of this Agreement and which
shall, simultaneously with its creation, become a Guarantor hereunder in
accordance with Section 7.13 hereof.
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"Prime Rate" means the variable per annum rate of interest so
designated from time to time by the Agent as its prime rate. The Prime Rate is a
reference rate and does not necessarily represent the lowest interest rate being
charged by the Agent to any of its customers.
"Principal Office" means, with respect to the Agent and each
Bank, its principal office as announced by such entity from time to time.
"Real Estate Assets" means, with respect to any entity, such
entity's real properties for which the fee interests or, with the prior consent
of the Banks, ground lease interests, are wholly-owned plus all loans and other
forms of indebtedness owing to such entity which are secured by first liens upon
real property.
"Real Estate Borrowing Base" means, at the time of
calculation, the sum of (i) 60% of the aggregate annualized and normalized
actual year-to-date Net Operating Incomes of the unencumbered Eligible
Properties (other than hotel properties) capitalized at 10.5%, (ii) 60% of the
aggregate annualized and normalized actual year to date Net Operating Incomes
less FF&E Reserves of unencumbered Eligible Properties constituting hotel
properties capitalized at 10.5%; (iii) 50% of the aggregate annualized and
normalized actual year-to-date Net Operating Incomes of the encumbered Eligible
Properties capitalized at 12.0% up to a maximum amount of $10,000,000; provided,
however, that in no event shall the aggregate amounts included in clause (ii)
above exceed 10% if the Borrowing Base at any time.
"Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System as the same may be amended or supplemented from time
to time.
"Regulatory Change" means, with respect to any Bank, any
change after the Closing Date in United States federal, state, municipal or
foreign laws or regulations (including Regulation D) or the adoption or making
after such date of any interpretations, directives or requests applying to a
class of banks including such Bank under any United States, federal, state,
municipal or foreign laws or regulations (whether or not having the force of
law) by any court or governmental or monetary authority charged with the
interpretation or administration thereof.
"Reportable Event" means any of the events set forth in
Section 4043(c) of ERISA as to which events the PBGC by regulation has not
waived the requirement of Section 4.43(a) of ERISA that it be notified within 30
days of the occurrence of such event.
"Required Banks" means, at any time, with respect to any
decisions to be made by the Banks hereunder, Banks having at least 66 2/3% of
the sum of aggregate of the Commitments hereunder provided that for purposes of
calculating the Required Lenders the outstanding principal balance of the Term
Loan shall be added to the Commitment of Fleet.
"Reserve Adjusted LIBOR Rate" means, with respect to the
Interest Period for each LIBOR Loan, the rate per annum (rounded upwards to the
nearest whole multiple of 1/100th of one percent) equal to the following:
LIBOR
----------------------------------------
1.00 - Eurocurrency Reserve Requirements.
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"Revolving Credit Lenders" means, Fleet, M&T and Leumi.
"Revolving Credit Loan" means any extension of credit made by
the Banks pursuant to Section 2.1 hereof.
"Revolving Credit Loan Debt Service" means, for any period,
the interest paid or accrued hereunder for such period plus any required
principal reductions.
"Revolving Credit Notes" means, collectively, the promissory
notes of the Borrower in the form of Exhibit A hereto evidencing the Revolving
Credit Loans made by a Revolving Credit Lender hereunder.
"Revolving Credit Termination Date" means the earlier to occur
of (a) the date on which the Commitments shall terminate hereunder and (b)
December 31, 2002.
"Security Agreement" means each security agreement,
substantially in the form of Exhibit E, to be dated the date hereof and
delivered by each of the Operating Companies to the Bank.
"Solvent" means when used with respect to any Person on a
particular date, that on such date: (a) the fair saleable value of its assets is
in excess of the total amount of its liabilities, including, without limitation,
the reasonably expected amount of such Persons obligations with respect to
contingent liabilities, (b) the present fair saleable value of the assets of
such Person is not less than the amount that will be required to pay the
probable liability of such Person on its Indebtedness as they become absolute
and matured, (c) such Person does not intend to, and does not believe that it
will, incur Indebtedness or liabilities beyond such Person's ability to pay as
such Indebtedness and liabilities mature and (d) such Person is not engaged in
business or a transaction for which such Person's property would constitute an
unreasonably small capital.
"Subsidiary," with respect to any Person, means any
corporation or other entity of which at least a majority of the securities or
other ownership interests having ordinary voting power (absolutely or
contingently) for the election of directors or other persons performing similar
functions are, at the relevant time, owned directly or indirectly by such
Person, or if the entity is a partnership or joint venture, a general partner is
under the control of such Person or such Person owns a majority of the equity of
such entity.
"Taxes" means any and all levies due and payable to any
federal, state, municipality or other governmental authority under the laws of
the United States of America, any state of the United States and any
municipality or other governmental authority thereof.
"Term Loan" means the $1,925,000 Term Loan advanced by the
Term Loan Lender to the Borrower pursuant to Section 2A-1 hereof.
"Term Loan Lender" means Fleet.
"Term Loan Maturity Date" means September 30, 2002, or such
earlier date on which the Borrower's obligations pursuant to Article 2-A hereof
have been paid in full.
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"Term Note" means the promissory note of the Borrower,
substantially in the form of Exhibit A-1 hereto, evidencing the Term Loan made
by the Term Loan Lender hereunder.
"Total Adjusted Outstanding Funded Indebtedness" means, at any
time, the sum of (i) all outstanding secured and unsecured funded Indebtedness
of the Borrower and the Guarantors (excluding Post-Closing Guarantors) on a
consolidated basis plus (ii) the Borrower's and the Guarantors' (excluding
Post-Closing Guarantors) pro rata share of Indebtedness from unconsolidated
joint venture properties, other than non-recourse indebtedness on such
properties.
"Total Commitments" means, at any time, the aggregate of the
Commitments in effect at such time.
"Unfunded Vested Liabilities" means, with respect to any Plan,
the amount (if any) by which the present value of all vested benefits under the
Plan exceeds the fair market value of all Plan assets allocable to such
benefits, as determined on the most recent valuation date of the Plan and in
accordance with the provisions of ERISA for calculating the potential liability
of the Borrower or any ERISA Affiliate to the PBGC or the Plan under Title IV of
ERISA.
Section 1.2. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP, and all
financial data required to be delivered hereunder shall be prepared in
accordance with GAAP.
ARTICLE 2.
CREDIT FACILITY.
Section 2.1. Revolving Credit Loans. Subject to the terms and
conditions of this Agreement, each Revolving Credit Lender severally agrees to
make revolving credit loans in Dollars (the "Revolving Credit Loans"), and all
Revolving Credit Loans shall be made by the Revolving Credit Lenders, on a
pro-rata basis in accordance with their respective Commitment Proportions, to
the Borrower from time to time, from and including the date hereof to but
excluding the Revolving Credit Termination Date, up to but not exceeding at any
one time outstanding the amount of its Commitment; provided, that no Revolving
Credit Loan shall be made if after giving effect to such Revolving Credit Loan
the Aggregate Revolving Credit Outstandings at the time of such Revolving Credit
Loan would exceed the lesser of (i) the Total Commitments or (ii) the Borrowing
Base in effect on such date. The Revolving Credit Loans may be outstanding as
Base Rate Loans or LIBOR Loans; provided, however, that during the occurrence
and continuance of an Event of Default, the Borrower may not elect and the
Revolving Credit Lenders shall have no obligation to make LIBOR Loans. Subject
to the foregoing limits, the Borrower may borrow, repay and reborrow, on or
after the date hereof and prior to the Revolving Credit Termination Date, all or
a portion of the Total Commitments as Revolving Credit Loans hereunder. Any
amount of any Revolving Credit Loan not paid when due (at maturity, on
acceleration or otherwise) shall bear interest thereafter until paid at the rate
set forth in Section 3.3(c) hereof.
Section 2.2. The Revolving Credit Notes. The Revolving Credit
Loans of each Revolving Credit Lender shall be evidenced by a single promissory
note in favor of such Revolving Credit Lender substantially in the form of
Exhibit A hereto with appropriate
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insertions, duly executed and completed by the Borrower. Each Revolving Credit
Lender is hereby authorized to record the date, type and amount of each
Revolving Credit Loan, the date and amount of each payment of principal thereof,
and the principal amount subject thereto and interest rate with thereto in such
Revolving Credit Lender's records and/or on the schedules annexed to and
constituting a part of its Revolving Credit Note, and, absent manifest error,
any such recordation shall constitute conclusive evidence of the information so
recorded; provided that the failure to make any such recordation shall not in
any way affect the obligation of the Borrower to repay the Revolving Credit
Loans in accordance with the terms of this Agreement (without giving effect to
any such error made in the Revolving Credit Note). Each Revolving Credit Note
(a) shall be dated the date hereof, (b) be stated to mature on the Revolving
Credit Termination Date, and (c) shall bear interest on the unpaid principal
amount thereof from time to time outstanding as provided herein.
Section 2.3. Use of Proceeds.
(a) The Borrower shall use the proceeds of the Revolving
Credit Loans on the date of this Agreement to repay in full Existing Bank Debt
(other than that portion of the Existing Bank Debt constituting term loans that
will be refinanced by the Term Loan hereunder) and may use the proceeds of the
Revolving Credit Loans on the date of this Agreement and from time to time
thereafter prior to the Revolving Credit Termination Date (i) for general
corporate and working capital purposes; (ii) to finance the acquisition of Real
Estate Assets or to make mortgage loans or similar loans that constitute Real
Estate Assets; (iii) to repurchase stock of the Borrower in an amount not to
exceed $2,000,000 in any fiscal year commencing after the date hereof or
$5,000,000 during the term of this Agreement; and (iv) to make advances to the
Operating Companies in an aggregate amount not to exceed $10,000,000 at any
time. No part of the proceeds of any of the Revolving Credit Loans will be used
(i) for any purpose which violates the provisions of Regulations T, U or X of
the Board of Governors of the Federal Reserve System as in effect on the date of
making such Loans or (ii) to permit the Borrower or any Guarantor to acquire
equity securities in any third party except as permitted pursuant to the
provisions of Section 8.7 hereof.
(b) The Borrower agrees to indemnify the Revolving Credit
Lenders and their respective directors, officers, employees, affiliates, agents
or other representatives and hold the Banks and their respective directors,
officers, employees, affiliates, agents or other representatives, harmless from
and against any and all liabilities, losses, damages, costs and expenses of any
kind (including, without limitation, the reasonable fees and expenses of counsel
for any such Person in connection with any investigative, administrative,
judicial proceeding, whether or not such Person shall be designated a party
thereto) which may be incurred by any such Person, relating to or arising out of
this Agreement or any actual or proposed use of any proceeds of the Revolving
Credit Loans hereunder.
Section 2.4. Borrowing Procedure for Revolving Credit Loans;
Rate and Interest Period Selection: Conversions.
(a) The Borrower may request a borrowing under the Commitments
hereunder as provided in Section 3.1. Each Revolving Credit Lender will make its
share of such borrowing available to the Agent at the Agent's office located at
1185 Avenue of the Xxxxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 not later than
2:00 p.m. New York City time on the date of such borrowing in immediately
available funds. Unless any applicable condition specified in Article 5 has not
been satisfied, not later than 3:00 p.m. New York City time on the date of such
15
borrowing, the Agent shall, through its Lending Office and subject to the
conditions of this Agreement, make the amount of the Loan to be made on such
date available to the Borrower, in immediately available funds, by crediting an
account of the Borrower designated by the Borrower and maintained with the
Agent.
(b) In the case of each Revolving Credit Loan which is a LIBOR
Loan, the Borrower shall select an Interest Period of any duration in accordance
with the definition of Interest Period in Section 1.1, subject to the
limitations that no Interest Period for a LIBOR Loan shall have a duration less
than one month, and if any such proposed Interest Period would otherwise be for
a shorter period, such Interest Period shall not be available.
(c) Upon the expiration of an Interest Period for any
Revolving Credit Loan, or any portion thereof, such Revolving Credit Loan or
portion thereof shall be automatically continued as a Base Rate Loan except to
the extent that such Loan shall be repaid hereunder or unless the Borrower shall
have notified the Revolving Credit Lenders, as provided in Section 3.1 hereof,
of its intention to select a different interest rate option with respect to such
Revolving Credit Loan or any portion thereof. Subject to the following
conditions and to the terms and conditions of this Agreement, the Borrower shall
have the right to convert any loan or portion thereof to a different type of
Loan (i.e., from a Base Rate Loan to a LIBOR Loan or vice versa):
(i) if less than all Revolving Credit Loans
at the time outstanding shall be converted, the notice given
by the Borrower to the Revolving Credit Lenders shall specify
the aggregate amount of Loans in each case to be converted and
such conversion shall be made ratably among the Revolving
Credit Lenders in accordance with their respective Commitment
Proportions;
(ii) in the case of a conversion of less
than all outstanding Revolving Credit Loans, the aggregate
principal amount of Revolving Credit Loans to be converted
shall not be less than (1) $500,000 (and if greater in
integral multiples of $100,000) in the case of conversions to
or into LIBOR Loans or (2) $200,000 (and if greater in
integral multiples of $50,000) in the case of conversions to
or into Base Rate Loans;
(iii) no Revolving Credit Loan may be
converted to a LIBOR Loan less than one month before the
Revolving Credit Termination Date;
(iv) a LIBOR Loan may be converted to a
different type of Loan only on the last day of the then
applicable Interest Period with respect thereto; and
(v) no Revolving Credit Loan or portion
thereof may be converted to a LIBOR Loan during the occurrence
and continuance of an Event of Default.
Notwithstanding anything to the contrary herein, after giving
effect to any Revolving Credit Loan, there shall not be more than six (6)
different Interest Periods in effect in respect of all Revolving Credit Loans
then outstanding.
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Section 2.5. Minimum Amounts of Revolving Credit Loan. Except
for borrowings which involve or utilize the full remaining amount of the
Commitments and payments which result in the prepayment of all Base Rate Loans,
each borrowing and payment of a Base Rate Loan shall be in an amount at least
equal to $200,000 and, if greater, integral multiples of $50,000 in excess
thereof. Each borrowing and payment of a LIBOR Loan shall be in an amount at
least equal to $500,000 and, if greater, in integral multiples of $ 100,000 in
excess thereof.
Section 2.6. Reduction of Commitments.
(a) The Borrower shall have the right to reduce or terminate
the amount of the unused Commitments at any time and from time to time provided
that: (i) the Borrower shall give notice of each such reduction or termination
to the Banks as provided in Section 3. 1, and (ii) each partial reduction shall
be allocated pro rata between the Commitments of each Bank in accordance with
their respective Commitment Proportions and shall be in an aggregate amount at
least equal to $3,000,000 or, if greater, in integral multiples of $1,000,000.
(b) The Commitments, once reduced or terminated may not be
reinstated.
ARTICLE 2-A.
THE TERM LOAN.
Section 2-A.1. The Term Loan. Subject to the terms and
conditions hereof, the Term Loan Lender agrees to make the Term Loan to the
Borrower on December 31, 1999.
Section 2-A.2. The Term Notes. The Term Note made by the Term
Loan Lender hereunder shall be evidenced by a single promissory note
substantially in the form of Exhibit A-1 hereto, with appropriate insertions,
payable to the order of the Term Loan Lender and representing the obligation of
the Borrower to pay the unpaid principal balance of the Term Loan, with interest
thereon as provided herein. The Term Loan Lender is hereby authorized to record
the date or amount of each payment or prepayment of principal thereof and the
date and amount of each payment of interest thereon in the Term Loan Lender's
records and/or on a schedule annexed to its Term Note and, absent manifest
error, any such recordation shall constitute conclusive evidence of the accuracy
of the information so recorded; provided, however, that the failure to record
such information shall not affect the Borrower's obligations to repay the Term
Loan. The Term Note (a) shall be dated the date such Term Loan is made (b) shall
be stated to mature on the Term Loan Maturity Date, (c) shall bear interest for
a period from the date such Loan is made until it is paid in full on the unpaid
principal amount thereof at the applicable rates per annum specified herein.
Section 2-A.3. Use of Proceeds.
(a) The Borrower shall use the proceeds of the Term Loan to
repay the Existing Bank Debt to the extent that it constitutes term loans.
(b) The Borrower agrees to indemnify the Term Loan Lender and
its respective directors, officers, employees, affiliates, agents or other
representatives and hold the Term Loan Lender and its respective directors,
officers, employees, affiliates, agents and other representatives, harmless from
and against any and all liabilities, losses, damages, costs and expenses of any
kind
17
(including, without limitation, the reasonable fees and expenses of counsel for
any such Person in connection with any investigative, administrative, or
judicial proceeding, whether or not such Person shall be designated a party
thereto) which may be incurred by any such person, relating to or arising out of
this Agreement or any actual or proposed use of any proceeds of Term Loan
hereunder.
Section 2-A.4. Amortization of Term Loans. The Term Loan made
hereunder shall have a term of 33 months. The principal balance of the Term Loan
shall be paid in equal consecutive quarterly installments of $175,000 commencing
on the last day of March, 2000, and continuing on the last day of each June,
September, December and March thereafter with the final installment thereof
being due on the Term Loan Maturity Date. All installments of principal on the
Term Loan shall be paid to the Agent for the benefit of the Term Loan Lender.
Section 2-A.5. Borrowing Procedure For Term Loans: Interest
Rate and Interest Period Selection.
(a) The Term Loan Lender shall make the Term Loan available to
the Agent at the Agent's office located at 1185 Avenue of the Xxxxxxxx, 0xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, not later than 2:00 p.m. New York City time on
December 31, 1999 in immediately available funds. Unless any applicable
condition specified in Article 5 has not been satisfied, not later than 3:00
p.m. New York City time on such date, the Agent shall, through its lending
office and subject to the conditions of this Agreement, make the amount of the
Term Loan available to the Borrower in immediately available funds by crediting
on account of the Borrower designated by the Borrower and maintained with the
Agent.
(b) The Term Loan shall initially be made as a LIBOR Loan
having an Interest Period of three (3) months. Upon expiration of any Interest
Period applicable to the Term Loan, the Borrower shall pay the next installment
of principal on the Term Loan, and the balance of the Term Loan shall be
continued as a LIBOR Loan having a three (3) month Interest Period.
Notwithstanding the foregoing, the Term Loan may not be continued as a LIBOR
Loan during the occurrence and continuance of an Event of Default.
ARTICLE 3.
GENERAL CREDIT PROVISIONS; FEES AND PAYMENTS.
Section 3.1. Certain Notices. Except as otherwise provided in
this Agreement, notices by the Borrower to the Banks of each borrowing pursuant
to Sections 2.4, each prepayment pursuant to Section 3.2, each reduction or
termination of the Commitments pursuant to Section 2.6 and each conversion of
Revolving Credit Loans pursuant to Sections 2.4 shall be irrevocable and shall
be effective on the date of receipt only if received by the Banks by not later
than 11:00 a.m., New York City time, and (a) in the case of borrowings and
prepayments of (i) Base Rate Loans, if given the date thereof and (ii) LIBOR
Loans, if given three (3) Banking Days prior thereto; (b) in the case of
reductions or terminations of the Commitments, given five (5) Banking Days prior
thereto; and (c) in the case of conversions or continuations pursuant to
Sections 2.4, if given three (3) Banking Days prior thereto in the case of
conversions to or continuations of LIBOR Loans and if given on the date thereof
in the case of conversions to Base Rate Loans. Each such notification which
relates to a borrowing, continuation or conversion shall specify the
18
amount and the type of Revolving Credit Loan (i.e., Base Rate Loan or LIBOR
Loan), the date of the proposed borrowing, whether such Revolving Credit Loan
represents an additional borrowing, a continuation or a conversion, and in the
case of a LIBOR Loan, the Interest Period to be used in the computation of
interest with respect thereto. Each such notice relating to a reduction or
termination of the Commitments shall specify the amount of the Commitments to be
reduced or terminated.
Section 3.2. Prepayments.
(a) The Borrower shall have the right at any time and from
time to time to prepay any Base Rate Loan, in whole or in part on one business
day's notice to the Agent; provided, however, that each such partial prepayment
of a Base Rate Loan shall be in a minimum aggregate principal amount of $200,000
or, if greater in amounts which are integral multiples of $50,000. Except as
required by paragraph (b) or (c) below or on the last day of an Interest Period
with respect thereto, the Borrower shall not be permitted to prepay LIBOR Loans.
(b) In the event that the Aggregate Revolving Credit
Outstandings exceed the lesser of the then applicable Borrowing Base, or the
Total Commitments at any time prior to the Revolving Credit Termination Date,
the Borrower shall promptly pay or prepay so much of the Revolving Credit Loans
outstanding as shall be necessary in order that the Aggregate Revolving Credit
Outstandings will not exceed the lesser of the Borrowing Base or the Total
Commitments then in effect. All prepayments under this subparagraph shall be
subject to Section 4.1.
(c) Unless otherwise agreed by the Banks in writing, the
Borrower shall be required to pay or prepay Revolving Credit Loans outstanding
with (i) 80% of the proceeds of the issuance by the Borrower or any Guarantor of
additional equity; (ii) 100% of the net proceeds of the sale by the Borrower or
any Guarantor of any Real Estate Assets; (iii) 100% of the net proceeds
resulting from the repayment of mortgages constituting Real Estate Assets; (iv)
100% of the net proceeds of a financing of any Eligible Property, (v) such
proceeds as may be paid as a result of a casualty or condemnation, all in accord
with Sections 7.11 or 7.12 of this Agreement, or (vi) 100% of the net proceeds
of a sale of any Operating Company permitted in accordance with the terms of
Section 8.4 hereof; provided, however, that the Borrower shall have no
obligation under clause (i) above until the aggregate net proceeds of any and
all additional equity issuances during the term of this Agreement shall equal or
exceed $1,000,000.00. All prepayments under this paragraph shall be subject to
Section 4.1. To the extent any prepayment pursuant to this Section 3.2(c) would
result in the Borrower being obligated to pay amounts to the Banks pursuant to
Section 4.1, then provided that no Default or Event of Default has occurred and
is continuing, at the Borrower's election the proceeds from any of the foregoing
events shall be deposited in an interest-bearing account owned by the Bank to be
applied to reduce the outstanding Loans upon expiration of the relevant Interest
Periods. The interest earned on such amounts shall be for the Borrower's account
and, in the absence of a Default or Event of Default, shall be credited by the
Agent to the Borrower's account.
(d) All payments required by paragraphs (b) or (c) above shall
be made to the Banks pro rata in accordance with their respective Commitment
Proportions and shall be applied as follows: first, to outstanding Base Rate
Loans up to the full amount thereof, second, to outstanding LIBOR Loans up to
the full amount thereof, and third to Term Loan.
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(e) All prepayments made pursuant to this Section 3.2 shall be
accompanied by the payment of all accrued interest on the amount so prepaid and
by all amounts required to be paid pursuant to Section 4.1 in connection
therewith.
Section 3.3. Interest on Loans.
(a) Base Rate Loans. The Borrower shall pay interest on the
outstanding and unpaid principal amount of each Base Rate Loan made under this
Agreement at a fluctuating rate per annum equal to the Base Rate from time to
time in effect. Each change in the interest rate shall take effect
simultaneously with the corresponding change in the Prime Rate or the Federal
Funds Rate, as the case may be. Interest shall be calculated on the basis of the
actual number of days elapsed divided by a year of three hundred sixty (360)
days and shall be paid to the Agent for the account of the Banks quarterly, in
arrears, on March 31, June 30, September 30 and December 31 in each year and on
the Termination Date.
(b) LIBOR Loans. The Borrower shall pay interest on the
outstanding and unpaid principal amount of each LIBOR Loan made under this
Agreement for each Interest Period applicable to such LIBOR Loan at a rate per
annum equal to the Reserve Adjusted LIBOR Rate in effect with respect thereto,
plus the Margin. Interest shall be calculated on the basis of the actual number
of days elapsed divided by a year of three hundred sixty (360) days and shall be
paid to the Banks, monthly in arrears on the last day of each month in each year
and on the Termination Date.
(c) Post-Default. If any Default or Event of Default has
occurred and is continuing hereunder, all Loans, and all interest, fees or other
amounts due hereunder, to the extent permitted by applicable law, shall bear
interest (payable on demand, and in any event on the last day of each month, and
computed daily on the basis of a 360-day year for actual days elapsed) (i) in
all cases other than LIBOR Loans, at the Default Rate until paid and (ii) in the
case of LIBOR Loans, at a rate which shall be the greater of (x) the Default
Rate or (y) 2% per annum in excess of the rate applicable to such LIBOR Loan,
until the expiration of the Interest Period applicable to such Loan, at which
time the Loan will automatically be converted into a Base Rate Loan, and until
paid, shall bear interest at the Default Rate. In no event, however, shall
interest payable hereunder be in excess of the maximum rate of interest
permitted under applicable law. The obligation to so pay interest upon any
reimbursement obligation of the Borrower to the Banks shall not be construed so
as to waive the requirement for reimbursement on the same date that payment is
made by the Banks as set forth in this Agreement.
Section 3.4. Commitment Fee. The Borrower shall pay to the
Agent for the ratable benefit of the Revolving Credit Lenders a commitment fee
for the period from and including the date hereof to and excluding the
Termination Date equal to 3/8 of 1% of the average daily unused portion of the
Total Commitments during the applicable period. The commitment fee shall be
calculated on the basis of a year of 360 days for the actual number of days
elapsed. The commitment fee shall be due and payable quarterly in arrears on the
last day of each calendar quarter and on the Revolving Credit Termination Date.
Section 3.5. Administrative Fee. The Borrower shall pay to the
Agent for its own account an annual fee of $25,000. The administrative fee shall
be due and payable annual in advance on or before the date hereof and on each
anniversary of the date hereof.
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Section 3.6. Closing Fee. The Borrower shall pay to the Agent,
for the ratable benefit of the Revolving Credit Lenders, a closing fee equal to
3/8 of 1% of the Total Commitments. This fee shall be due and payable on the
Closing Date.
Section 3.7. Payments Generally.
(a) All payments under this Agreement or the Notes shall be
made in Dollars in immediately available funds to the Agent, in accordance with
the respective obligations of the Borrower then due and payable to each of them
not later than 1:00 p.m. New York City time on the relevant dates specified
above (each such payment made after such time on such due date is to be deemed
to have been made on the next succeeding Banking Day), to the Agent's Lending
Office. The Borrower will notify the Agent of any payment pursuant to the
provisions of this Section at the same time it makes any such payment. The Bank
may (but shall not be obligated to) debit the amount of any such payment to any
ordinary deposit account of the Borrower with such Bank; provided, however, that
the Agent shall not be permitted to debit any funds which are not available to
the Borrower other than on an overdraft basis. The Borrower shall, at the time
of making each payment under this Agreement or the Notes, specify to the Agent
the principal or other amount payable by the Borrower under this Agreement or
the Notes to which such payment be applied; provided, however, that in the event
that the Borrower fails to so specify, or if an Event of Default has occurred
and is continuing, the Banks shall apply such payment as they may elect in their
sole discretion. If the due date of any payment under this Agreement or the
Notes would otherwise fall on a day which is not a Banking Day, such date shall
be extended to the next succeeding Banking Day and interest shall be payable for
any principal so extended for the period of such extension. Except to the extent
otherwise provided herein, it is the intention of the parties that all payments
hereunder be applied to the Banks pro rata in accordance with their respective
Commitment Proportions.
(b) All payments made by the Borrower under this Agreement,
the Notes or the other Facility Documents shall be made free and clear of, and
without deduction or withholding for or on account of, any present or future
income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions
or withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by any governmental or taxing authority of any jurisdiction, excluding,
(x) in the case of each Bank, income taxes and franchise taxes (imposed in lieu
of income taxes) imposed on such Bank as a result of a present or former
connection between the jurisdiction of the government or the taxing authority
imposing such tax and such Bank (excluding a connection arising solely from such
Bank having executed, delivered, or performed its obligations or received a
payment under, or enforced, this Agreement, the Notes or the other Facility
Documents) or any political subdivision or taxing authority thereof or therein,
and (y) taxes (including withholding taxes) imposed by reason of the failure of
the Agent or any Bank, in either case that is organized outside the United
States, to comply with Section 3.7(c) hereof (or the inaccuracy at any time of
the certificates, documents and other evidence delivered thereunder) (all such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions and
withholdings being hereinafter called "Taxes"). If any Taxes are withheld from
any amounts payable to any Bank hereunder or under the Facility Documents, the
amounts, paid to such Bank shall be increased to the extent necessary to yield
to such Bank (after so payment of all Taxes) interest or any such other amounts
payable hereunder at the rates or in the amounts specified in this Agreement,
the Notes and the other Facility Documents. Whenever any Taxes are payable by
21
the Borrower, the Borrower shall send to such Bank within 30 days after the date
of any payment, a certified copy of an original official receipt received by the
Borrower showing payment thereof. If the Borrower fails to pay any Taxes when
due to the appropriate taxing authority or fails to remit to the Banks the
required receipts or other required documentary evidence, the Borrower shall
indemnify the Banks for any incremental taxes, interest or penalties that may
become payable by any Bank as a result of any such failure. This indemnification
shall be made within 30 days from the date such Bank or the Agent (as the case
may be ) makes written demand therefor. If any Bank receives a refund in respect
of any Taxes for which such Bank has received payment from the Borrower
hereunder, such Bank shall promptly notify the Borrower of such refund and such
Bank shall, within 30 days of receipt of a request by the Borrower repay such
refund to the Borrower, provided that the Borrower, upon the request of such
Bank, agrees to return such refund (plus any penalties, interest or other
charges) to such Bank in the event such Bank is required to repay such refund.
The agreements in this subsection shall survive the termination of this
Agreement and the Facility Documents and the payment of the Notes and all other
amounts payable hereunder or thereunder.
(c) Each Bank that is organized outside of the United States
shall deliver to the Borrower on the date hereof (or, in the case of an
assignee, on the date of the assignment) and from time to time as required for
renewal under applicable law duly completed copies of United States Internal
Revenue Service Form 1001 or 4224 (or any successor or additional forms), as
appropriate, indicating in each case that such Bank is entitled to receive
payments under this Agreement without any deduction or withholding of any United
States federal income taxes. Each Bank that is organized outside the United
States shall promptly notify the Borrower and each other Bank of any change in
its Lending Office and upon written request of the Borrower such Bank shall,
prior to the immediately following due date of any payment by the Borrower or
any Guarantor hereunder or under any other Facility Document, deliver to the
Borrower or such Guarantor, as the case may be (with copies to each other Bank),
such certificates, documents or other evidence, as required by the Code or
Treasury Regulations issued pursuant thereto, including without limitation
Internal Revenue Service Form 4224, Form 1001 and any other certificate or
statement of exemption required by Treasury Regulation Section 1.1441-4(a) or
Section 1.1441-6(c) or any subsequent version thereof, properly completed and
duly executed by such Bank establishing that such payment is (i) not subject to
withholding under the Code because such payment is effectively connected with
the conduct by such Bank of a trade or business in the United States or (ii)
totally exempt from United States tax under a provision of an applicable tax
treaty. The Borrower shall be entitled to rely on such forms in their possession
until receipt of any revised or successor form pursuant to this Section 3.6(c).
If the Agent or a Bank fails to provide a certificate, document or other
evidence required pursuant to this Section 3.6(c), then, unless it is no longer
entitled to such exemption due to a change in law, upon notice by the Borrower
to the Agent and such Bank (i) the Borrower shall be entitled to deduct or
withhold on payments to the Agent or such Bank as a result of such failure, as
required by law, and (ii) the Borrower shall not be required to make payments of
additional amounts with respect to such withheld Taxes pursuant to clause (x) of
Section 3.6(c) to the extent such withholding is required solely by reason of
the failure of the Agent or such Bank to provide the necessary certificate,
document or other evidence.
Section 3.8. Interim Adjustments to Borrowing Base.
(a) The Borrowing Base shall be adjusted periodically as
follows:
22
(i) The Borrowing Base shall be increased to include:
(A) Real Estate Assets that are acquired by the
Borrower and/or the Guarantors and that satisfy the definition of "Eligible
Properties" hereunder; and
(B) Real Estate Assets that do not qualify as
"Eligible Properties" but subsequently satisfy the requirements of "Eligible
Properties";
(C) Real Estate Assets that originally satisfied
the definition of "Eligible Properties" hereunder, where the provisions of
clause (ii) (B) below were applied but the condition has been cured through a
lease extension or a re-leasing of such property, provided, however, that in
either case with respect to any such property, the Agent, on behalf of the
Banks, shall be permitted to conduct such due diligence investigations at the
Borrower's expense as the Banks deem appropriate prior to including such
property as an "Eligible Property" and the Banks shall be satisfied that the
property meets the criteria for "Eligible Properties". In the event the Agent
does not inform the owner of the subject Real Estate Asset that the Banks have
rejected the Real Estate Asset as an Eligible Property within 30 Business Days,
such property in question shall automatically be deemed an Eligible Property.
(ii) Conversely, the Borrowing Base shall be decreased to
exclude:
(A) Real Estate Assets that are sold by the
Borrower or any Guarantor or that become subject to liens securing Indebtedness
which exceed 30% of the annualized and normalized actual year-to-date Net
Operating Income for such property [capitalized at 12.0%]; and
(B) Any Real Estate Asset that originally satisfied
the definition of "Eligible Property," (i) if the tenant for a substantial
portion of such property has delivered a termination notice, or (ii) six months
prior to the termination of the lease with respect to a substantial portion of
such property or (iii) if the tenant otherwise indicates its intention to cease
paying rent with respect to a substantial portion of such property.
(b) Upon the happening of any of the events described above,
the Borrower shall deliver to the Banks a notice thereof as required pursuant to
Section 7.8 hereof. In addition, the Borrower shall deliver to the banks a new
Borrowing Base Certificate within five (5) Banking Days after the happening of
any such event; provided, however, that in the case of clause 3.8(a)(i) above,
the Borrower shall not deliver a new Borrowing Base Certificate including any
such property until the Agent shall have completed its due diligence
investigation and the Banks shall have been satisfied with the results thereof.
The Agent agrees to use all reasonable efforts to complete any such due
diligence investigation within 30 Business Days of receiving notice from the
Borrower thereof.
ARTICLE 4.
YIELD PROTECTION, ETC.
Section 4.1. Certain Compensation.
23
(a) The Borrower hereby agrees to indemnify the Banks against
any loss or expense which the Banks or any one of them may sustain or incur as a
consequence of any of the following:
(i) the receipt or recovery by a Bank,
whether by voluntary prepayment, acceleration or otherwise, of
all or any part of a LIBOR Loan prior to the last day of an
Interest Period applicable thereto;
(ii) the conversion, prior to the last day
of an applicable Interest Period, of a LIBOR Loan into a Base
Rate Loan;
(iii) the failure by the Borrower to borrow
any LIBOR Loan, convert any Base Rate Loan to a LIBOR Loan or
continue any LIBOR Loan on the date of borrowing, conversion
or continuation set forth in the notice delivered by the
Borrower pursuant to the provisions hereof, unless such
failure to borrow results from the Banks' failure to fund such
borrowing when the Banks are required to do so under the terms
of this Agreement; or
(iv) the failure by the Borrower to pay,
punctually on the due date thereof, any amount payable by the
Borrower with respect to or on account of any LIBOR Loan.
Without limiting the effect of the foregoing, Borrower shall
pay to any Bank a "yield maintenance fee" in an amount computed as follows: The
current rate for United States Treasury securities (bills on a discounted basis
shall be converted to a bond equivalent) with a maturity date closest to the
term chosen pursuant to the Fixed Rate Election (as defined below) with respect
to the principal amount so received, recovered, converted or not borrowed, shall
be subtracted from the rate of interest applicable to such LIBOR Loan (or the
rate agreed to in the case of a failure to borrow). If the result is zero or a
negative number, there shall be no yield maintenance fee. If the result is a
positive number then the resulting percentage shall be multiplied by the amount
of the principal balance being received, recovered, converted or not borrowed.
The resulting amount shall be divided by 360 and multiplied by the number of
days remaining in the term chosen pursuant to the Fixed Rate Election as to
which the prepayment is made. Said amount shall be reduced to present value
calculated by using the above referenced United States Treasury securities rate
and the number of days remaining in the term chosen pursuant to the relevant
Fixed Rate Election. The resulting amount shall be the yield maintenance fee due
to such Bank. Each reference in this paragraph to "Fixed Rate Election" shall
mean the election by Borrower of the Reserve Adjusted LIBOR Rate. If by reason
of an Event of Default, the Banks elect to declare the Notes to be immediately
due and payable, then any yield maintenance fee with respect to all LIBOR Loan
shall become due and payable in the same manner as though the Borrower prepaid
such LIBOR loans.
(b) Any Bank requesting indemnification pursuant to this
Section 4.1 shall deliver to Agent and to the Borrower a certificate as to any
additional amounts payable pursuant to this Section 4.1 setting forth the basis
and method of determining such amounts, which certificate shall be conclusive,
absent manifest error, as to the determination by each Bank set forth therein if
made reasonably and in good faith. The Borrower shall pay to each Bank any
amounts so certified by such Bank within 10 days of receipt of any such
certificate. For purposes of this Section 4.1, all references to the "Bank"
shall be deemed to include any participant in this Agreement and/or the Loans.
24
Section 4.2. Additional Costs.
(a) The Borrower shall pay to each Bank, from time to time, on
demand of any such Bank, such amounts as such Bank may reasonably determine to
be necessary to compensate it for any costs which Bank reasonably determines are
attributable to its obligation to make any Loan hereunder, or any reduction in
any amount receivable by such Bank hereunder in respect of any such Loans or
such obligation (such increases in costs and reductions in amounts receivable
being herein called "Additional Costs"), resulting from any Regulatory Change
which: (i) changes the basis of taxation of any amounts payable to such Bank
under this Agreement or its Note in respect of any such obligations (other than
taxes imposed on the overall net income of such Bank for any of such obligations
by the jurisdiction in which such Bank has its principal office or Lending
Office or franchise taxes imposed in lieu of income taxes); or (ii) imposes or
modifies any reserve, special deposit, deposit insurance or assessment, minimum
capital, capital ratio or similar requirements relating to any extensions of
credit or other assets of, or any deposits with or other liabilities of, such
Bank (including any of such Loans or any deposits referred to in the definitions
of "LIBOR Loans"); or (iii) imposes any other condition affecting this
Agreement, or its Note (or any of such extensions of credit or liabilities) and
such Bank's obligations with respect thereto. Each Bank will notify the Agent
and the Borrower of any event occurring after the date of this Agreement which
will entitle such Bank to compensation pursuant to this Section 4.2(a) as
promptly as practicable after it obtains knowledge thereof and determines to
request such compensation. Notwithstanding anything herein to the contrary, no
provision of this Section 4.2(a) shall be deemed to require the Borrower to make
any payment of any amount to the extent that such payment would duplicate any
payment made by the Borrower pursuant to Section 3.7 hereof.
(b) Without limiting the effect of the foregoing provisions of
this Section 4.2, in the event that, by reason of any Regulatory Change, any
Bank either (i) incurs Additional Costs based on or measured by the excess above
a specified level of the amount of a category of deposits or other liabilities
of such Bank which includes deposits by reference to which the interest rate on
LIBOR Loans is determined as provided in this Agreement or a category of
extensions of credit or other assets of such Bank which includes LIBOR Loans or
(ii) becomes subject to restrictions on the amount of such a category of
liabilities or assets which it may hold, then, if such Bank so elects by notice
to the Borrower, the obligation of such Bank to make LIBOR Loans hereunder shall
be suspended until the date such Regulatory Change ceases to be in effect (in
which case the provisions of Section 4.5 shall be applicable).
(c) Without limiting the effect of the foregoing provisions of
this Section 4.2 (but without duplication), the Borrower shall pay to each Bank
from time to time on request such amounts as such Bank may reasonably determine
to be necessary to compensate such Bank for any costs which it reasonably
determines are attributable to the maintenance by it or any of its Affiliates
pursuant to any law or regulation of any jurisdiction or any interpretation,
directive or request (whether or not having the force of law and whether in
effect on the date of this Agreement or thereafter) of any court or governmental
or monetary authority, of capital in respect of its Loans or other obligations
hereunder (such compensation to include, without limitation, an amount equal to
any reduction in return on assets or equity of such Bank to a level below that
which it could have achieved but for such law, regulation, interpretation,
directive or request). Each Bank
25
will notify the Agent and the Borrower if it is entitled to compensation
pursuant to this Section 4.2(c) as promptly as practicable after it determines
to request such compensation.
(d) A statement of any Bank setting forth such amount or
amounts, supported by calculations in reasonable detail, as shall be necessary
to compensate such Bank as specified in paragraphs (a), (b) and (c) above shall
be delivered to the Borrower and shall be conclusive absent demonstrable error.
The Borrower shall pay each such Bank the amount shown as due on any such
statement within ten (10) days after its receipt of the same.
(e) Any Bank claiming any additional amounts payable pursuant
to this Section 4.2 agrees to use reasonable efforts (consistent with legal and
regulatory restrictions) to designate a different Lending Office if the making
of such a designation would avoid the need for, or reduce the amount of, any
such additional amounts and would not, in the reasonable judgment of such Bank,
be otherwise disadvantageous to such Bank.
Section 4.3. Limitation on Types of Loans. Anything herein to
the contrary notwithstanding, if:
(a) any Bank determines (which determination shall be
conclusive) that quotations of interest rates for the relevant deposits referred
to in the definition of "LIBOR Loans " in Section 1.1 are not being provided in
the relevant amounts or for the relevant maturities for purposes of determining
the rate of interest for any LIBOR Loans as provided in this Agreement; or
(b) any Bank determines (which determination shall be
conclusive) and notifies the Agent and the Borrower that the relevant rates of
interest referred to in the definition of "LIBOR Loans" in Section 1.1 upon the
basis of which the rate of interest for any type of LIBOR Loans is to be
determined do not adequately cover the cost to such Bank of making or
maintaining such Loans, then, such Bank shall as soon as practicable thereafter
give written notice (or facsimile notice promptly confirmed in writing) of such
determination to the Agent and the Borrower, and any request by the Borrower for
the making of a LIBOR Loan or conversion or continuation of any Loan into a
LIBOR Loan, in each case, pursuant to the provisions hereof shall, until the
circumstances giving rise to such notice no longer exist, be deemed to be a
request for a Base Rate Loan. Each determination by a Bank made hereunder shall
be conclusive absent manifest error.
Section 4.4. Illegality. Notwithstanding any other provision
in this Agreement, in the event that it becomes unlawful for any Bank or its
Lending Office to honor its obligation to make or maintain LIBOR Loans
hereunder, then such Bank shall promptly notify the Agent and the Borrower
thereof and such Bank's obligation to make or maintain LIBOR Loans hereunder
shall be suspended until such time as such Bank may again make and maintain such
affected Loans (in which case the provisions of Section 4.5 shall be
applicable).
Section 4.5. Certain LIBOR Loans Pursuant To Sections 4.2.,
4.3 and 4.4. If an event referred to in Section 4.2, 4.3 or 4.4 has occurred,
the affected Bank shall be required to make Base Rate Loans in accordance with
this Agreement, and all LIBOR Loans of such Bank then outstanding shall be
automatically converted into Base Rate Loans on the date specified by such Bank
in such notice (which shall be, for each LIBOR
26
Loan, the last day of the Interest Period applicable thereto unless such Bank
determines that it is required by law to convert such LIBOR Loan on an earlier
date in which case such earlier date shall be the date of conversion), and, to
the extent that LIBOR Loans are so made as (or converted into) Base Rate Loans,
all payments of principal which would otherwise be applied to such Bank's LIBOR
Loans shall be applied instead to its Base Rate Loans. In the event of any
conversion of any LIBOR Loan to a Base Rate Loan pursuant to Section 4.5 prior
to the maturity date with respect to such LIBOR Loan, the Borrower shall pay to
the relevant Bank all amounts required to be paid pursuant to Section 4.1
hereof.
Section 4.6. Survival. The indemnities and other obligations
set forth in this Article 4 shall survive payment in full of all Loans or
extensions of credit made pursuant to this Agreement and the Termination Date.
ARTICLE 5.
CONDITIONS PRECEDENT.
Section 5.1. Documentary Conditions Precedent. The
obligations of the Banks to make the Loans on or after the date hereof are
subject to the conditions precedent that:
(a) each Bank shall have received on or before the date hereof
each of the following, in form and substance reasonably satisfactory to such
Bank and its counsel:
(i) this Agreement duly executed by the Borrower;
(ii) in the case of each Revolving Credit
Lender, the Revolving Credit Note executed in favor of such
Revolving Credit Lender duly executed by the Borrower;
(iii) in the case of the Term Loan Lender,
the Term Loan Note executed in favor of such Term Loan Lender
duly executed by the Borrower;
(iv) a certificate of the Secretary of the
Borrower and each of the Guarantors listed on Schedule 5.1(a),
dated the Closing Date, attesting to all corporate action
taken by such entity, including resolutions of its Board of
Directors authorizing the execution, delivery and performance
of the Facility Documents and each other document to be
delivered pursuant to this Agreement, together with certified
copies of the certificate or articles of incorporation and the
by-laws of the Borrower and each of such Guarantors; and, such
certificate shall state that the resolutions and corporate
documents thereby certified have not been amended, modified,
revoked or rescinded as of the date of such certificate;
(v) a certificate of the Secretary of the
Borrower and each of the Guarantors (which in the case of
Guarantors may be in the form of an omnibus certificate),
dated the Closing Date, certifying the names and true
signatures of the officers of such entity authorized to sign
the Facility Documents and the other documents to be delivered
by such entity under this Agreement;
(vi) a certificate of a duly authorized
officer of the Borrower, dated the Closing Date, stating that
the representations and warranties in Article 6 are true and
27
correct on such date as though made on and as of such date and
that no event has occurred and is continuing which constitutes
a Default or Event of Default;
(vii) Guarantees, duly executed by each
Guarantor;
(viii) Security Agreements, duly executed by
each of the Operating Companies, together with fully executed
and completed financing statements on form UCC-1, in proper
form for filing in all jurisdictions necessary or, in the
reasonable discretion of the Agent, desirable to perfect the
security interests granted under the Security Agreements;
(ix) UCC search results identifying all
financing statements on file with respect to the Borrower or
the Guarantor in such jurisdictions as the Agent requires
indicating that no party claims any interest in the property
of the Borrower or the Guarantors other than the holders of
Permitted Liens;
(x) results of title searches with respect
to such properties of the Borrower and the Guarantor as the
Agent requires, which shall be satisfactory to the Banks in
all respects;
(xi) the Assignments, duly executed by each
of the Borrower and the Guarantors in proper form for filing
in all jurisdictions necessary or in the reasonable discretion
of the Agent, desirable to record the Banks' interest in the
leases on the Real Estate Assets;
(xii) the Environmental Indemnity Agreement,
duly executed by the Borrower and each Guarantor;
(xiii) an opinion of counsel for the
Borrower and Guarantors, dated the Closing Date, in
substantially the form of Exhibit F;
(xiv) satisfactory evidence that the
Borrower and the Guarantors listed on Schedule 5.1A are duly
organized, validly existing and in good standing under the
laws of their respective jurisdictions of incorporation;
(xv) audited consolidated balance sheets of
the Borrower and the Guarantors as of December 31, 1998, and
consolidated income statements and statements of cash flows of
the Borrower and the Guarantors for the fiscal year then
ended, all prepared in accordance with GAAP, together with the
unqualified opinion thereon of Xxxxxx Xxxxxxxx, LLP,
independent certified public accountants, together with
management prepared consolidating balance sheets, income
statements and statements of cash flows as of the same date
and covering the same fiscal period, and unaudited
consolidated and consolidating balance sheet of the Borrower
and the Guarantors as at September 30, 1999, together with
income statements and statements of cash flows of the Borrower
and the Guarantors for the fiscal quarter ended September 30,
1999 and for the period commencing at the end of the previous
fiscal year and ending with the end of such quarter, each
prepared by or under the supervision of the chief financial
officer of the Borrower in accordance with GAAP;
(xvi) evidence that the Borrower and the
Guarantors maintain such insurance with respect to their
business and properties as would customarily be maintained by
similar businesses which are similarly situated;
28
(xvii) satisfactory evidence that neither
the Borrower nor any Guarantor is in default with respect to
any contractual obligations to which it is a party, the effect
of which may be material and adverse to the Borrower or any
Operating Company, or the Borrower and the Guarantors, taken
as a whole, or to the ability of the Borrower or any Guarantor
to perform its obligations hereunder or under the other
Facility Documents;
(xviii) a duly executed Borrowing Base
Certificate containing information as of September 30, 1999,
in form and substance satisfactory to the Banks;
(xix) a property cash flow analysis in the
form of the property cash flow analysis previously delivered
to the Banks confirming information as of June 30, 1999, which
shall in all respects be satisfactory to the Banks, together
with a certification of a duly authorized officer of the
Borrower (A) that no event or circumstance has occurred since
June 30, 1999 which would have a material adverse effect on
the information contained in such analysis with respect to any
property or (B) describing all material changes in such
analysis from the date thereof through the date hereof;
(xx) such other documents, instruments,
approvals, opinions and evidence as the Banks may reasonably
require.
(b) the Borrower shall have paid or caused to be paid to the
Banks in full all fees and expenses required to be paid hereunder or in
connection herewith, and including all fees and expenses of the Banks incurred
in connection with the preparation, execution and delivery of this Agreement and
the other Facility Documents and the consummation of the transactions
contemplated thereby (including, without limitation, those set forth in Section
12.3 below) and all expenses incurred by the Agent pursuant to Subparagraph (g)
below;
(c) the Borrower and the Guarantors shall have obtained all
consents, permits and approvals required in connection with the execution,
delivery and performance by the Borrower and the Guarantors of their obligations
hereunder and such consents, permits and approvals shall continue in full force
and effect;
(d) the Banks shall be satisfied that the proceeds of the
initial Loans hereunder shall be applied to pay the Borrower's Existing Bank
Debt in full on the date hereof, that all UCC-1 financing statements filed to
secure the Borrower's obligations with respect to the Existing Bank Debt shall
have been terminated, and that all existing lines of credit and demand
facilities of the Borrower and the Guarantor shall have been terminated;
(e) the Agent shall have been provided with copies of all
credit agreements, loan agreements, indentures, mortgages and other documents
relating to the extension of credit to the Borrower and shall be satisfied with
its review of the foregoing;
(f) the Banks shall be satisfied with the form and content of
all Schedules delivered by the Borrower pursuant to this Agreement or any
document delivered in connection herewith;
29
(g) the Agent shall have conducted a physical inspection of no
fewer than twenty (20) Eligible Properties and shall be satisfied that such
properties are occupied as represented by the Borrower, are in good and
workmanlike condition and are otherwise in conformance with the Agent's normal
lending requirements;
(h) the Agent shall have received title reports on each of
twenty (20) Eligible Properties;
(i) the Agent shall have verified the nine month Net Operating
Income at September 30, 1999 (which shall be annualized and normalized) for each
of the properties referred to in subparagraph (g) above, including analysis of
future contractual income stream and verification of revenues and expenses;
(j) the Agent shall have completed a review of all leases
relating to each of the properties referred to in paragraph (h) above;
(k) the Banks shall be satisfied that there has been no
material adverse change in the financial condition of the Borrower or any
Guarantor since December 31, 1998; and
(l) all legal matters in connection with this financing shall
be reasonably satisfactory to the Banks and their counsel.
Section 5.2. Additional Conditions Precedent. The obligations
of the Banks to make any Loan shall be subject to the further conditions
precedent (which shall be in addition to, and shall not be deemed to limit or
modify, any of the other terms and conditions hereunder) that on the date of
such Loan the Banks shall have received the following:
(a) a certificate executed by the Chief Financial Officer or
the Chief Executive Officer of the Borrower dated as of such date, stating that
(i) the representations and warranties contained in Article 6 hereof, which for
purposes of this Section, shall be deemed to relate to the Borrower and to each
Guarantor as if each Person were the subject of each such representation and
warranty, are true and correct in all material respects on and as of the date of
such Loan as though made on and as of such date (except when such representation
or warranty by its terms relates to the date hereof or another specific date;
(ii) no Default or Event of Default has occurred and is continuing or would
result from any such Loan; (iii) since the date of the most recent Borrowing
Base Certificate there has been no material adverse change in the Borrowing
Base; and (iv) since the date of the most recent financial statements delivered
hereunder there has been no material adverse change in the business, properties,
prospects, financial or other condition of the Borrower or any Guarantor; and
(v) the proceeds of such Loan shall be used in accordance with all applicable
provisions of this Agreement, including, without limitation, the provisions of
Section 8.7 hereof.
(b) a certificate executed by the Chief Financial Officer or
the Chief Executive Officer of the Borrower, dated as of such date, in form and
substance satisfactory to the Banks stating that after giving effect to the
proposed borrowing, Aggregate Outstandings, will not exceed the lesser of (i)
the total Commitments or (ii) the Borrowing Base then in effect; and
(c) a copy of the Borrower's most recent Borrowing Base
Certificate delivered pursuant to Section 7.8 hereof.
30
ARTICLE 6.
REPRESENTATIONS AND WARRANTIES.
The Borrower and, where applicable, each Guarantor, hereby
represents and warrants that:
Section 6.1. Incorporation, Good Standing and Due
Qualifications; Compliance with Law. Each of the Borrower and the Guarantors is
duly incorporated, validly existing and in good standing under the laws of its
respective jurisdiction of incorporation, has the corporate power and authority
to own its assets and to transact the business in which it is now engaged or
presently proposes to be engaged, and is duly qualified as a foreign corporation
and in good standing under the laws of each other jurisdiction in which such
qualification is required except where the failure to so qualify would not cause
a material adverse effect upon the operations, business, properties or financial
condition of the Borrower or any Operating Company or of the Borrower and the
Guarantors, taken as a whole. In addition, the Borrower and each of the
Guarantors is in compliance in all material respects with all laws, treaties,
rules or regulations and determinations or orders of or with respect to all
arbitrators, courts or other governmental authorities applicable to it.
Section 6.2. Power and Authority; No Conflicts. The execution,
delivery and performance by the Borrower and the Guarantors of each of the
Facility Documents to which it is a party have been duly authorized by all
necessary corporate action and do not and will not: (a) require any consent or
approval of the stockholders of the Borrower or any of the Guarantors; (b)
contravene the charter or by-laws of the Borrower or any of the Guarantors; (c)
violate any provision of, or require any filing, registration, consent or
approval under, any law, rule, regulation (including, without limitation, the
provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve system as in effect from time to time), order, writ, judgment,
injunction, decree, determination or award presently in effect having
applicability to the Borrower; (d) result in a breach of or constitute a default
or require any consent under any indenture or loan agreement or any other
agreement, lease or instrument to which the Borrower or any of the Guarantors is
a party or by which properties of the Borrower or any of the Guarantors may be
bound or affected; (e) result in or require the creation or imposition of any
Lien upon or with respect to any of the properties now owned or hereafter
acquired by the Borrower or any of the Guarantors except in favor of the Banks
as herein provided; or (f) cause the Borrower or any of the Guarantors to be in
default under any such rule, regulation, order, writ, judgment, injunction,
decree, determination or award or any such indenture, agreement, lease or
instrument.
Section 6.3. Legally Enforceable Agreements. Each Facility
Document is, or when delivered under this Agreement will be, a legal, valid and
binding obligation of the Borrower and each Guarantor (if such entity or Person
is a party thereto) enforceable against such entities or Person in accordance
with its terms, except to the extent that such enforcement may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance and other similar laws
affecting creditors' rights generally or by the effect of general principles of
equity which may limit the availability of equitable remedies (whether in a
proceeding at law or in equity).
31
Section 6.4. Litigation. There are no actions, suits or
proceedings pending or, to the knowledge of the Borrower, threatened, against or
affecting the Borrower or any of the Guarantors before any court, governmental
agency or arbitrator, which would, in any one case or in the aggregate,
materially adversely affect the financial condition, operations, properties or
business of the Borrower or any of the Guarantors, or the ability of the
Borrower or any Guarantor to perform its obligations hereunder.
Section 6.5. Financial Statements; Other Liabilities. The
consolidated balance sheet of the Borrower and the Guarantors as at December 31,
1998, and the related income statements and statements of cash flow of the
Borrower and the Guarantors for the fiscal year then ended, and the accompanying
notes, together with the unqualified opinion thereon of Xxxxxx Xxxxxxxx, LLP,
independent certified public accountants, and the interim financial statements
of the Borrower and the Guarantors as at and as of (as the case may be)
September 30, 1999, copies of which have been furnished to each of the Banks,
fairly present the financial condition of the Borrower and the Guarantors as at
such dates and the results of the operations of the Borrower and the Guarantors
for the periods covered by such statements, all in accordance with GAAP
consistently applied (subject, in the case of interim financial statements, to
year-end adjustments and except, in the case of such interim financial
statements, for the absence of notes thereto prepared in accordance with GAAP).
As of the date hereof, there are no liabilities or obligations of the Borrower
or any of the Guarantors, whether direct or indirect, absolute or contingent, or
matured or unmatured, other than (a) as disclosed or provided for in the
financial statements and notes thereto which are referred to above or which are
not required to be so disclosed, or (b) which are disclosed elsewhere in this
Agreement or in the Schedules hereto or which are not required to be so
disclosed, or (c) arising in the ordinary course of business since December 31,
1998 or (d) created by this Agreement. The written information, exhibits and
reports furnished by the Borrower to the Banks in connection with the
negotiation of this Agreement are complete and correct in all material respects.
No event has occurred which would constitute a material adverse change in the
business, financial or other condition or prospects of the Borrower and the
Guarantors taken as a whole.
Section 6.6. Ownership and Liens. The Borrower and the
Guarantors have title to, or valid leasehold interests in, all of its properties
and assets, real and personal, including the properties and assets, and
leasehold interests reflected in the financial statements referred to in Section
6.5, and none of the properties and assets owned by the Borrower or the
Guarantors, and none of their respective leasehold interests, is subject to any
Lien, except for Permitted Liens.
Section 6.7. Taxes. The Borrower and each of the Guarantors
have filed all tax returns (foreign, federal, state and local) required to be
filed (including, without limitation, with respect to payroll and sales taxes)
and the Borrower and each of the Guarantors have paid all taxes (including,
without limitation, all payroll and sales taxes), assessments and governmental
charges and levies shown thereon to be due, including interest and penalties,
other than taxes, assessments and governmental charges and levies being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves in conformity with GAAP shall have been provided on the books
of the Borrower and the Guarantors.
Section 6.8. ERISA. As of the date hereof, the Borrower and
its ERISA Affiliates are in compliance in all material respects with all
applicable provisions of ERISA. No Reportable Event has occurred with respect to
any Plan; no notice of intent to terminate a Plan has been filed nor has any
Plan been terminated; no circumstance exists which constitutes grounds under
32
Section 4042 of ERISA entitling the PBGC to institute proceedings to terminate,
or appoint a trustee to administer, a Plan, nor has the PBGC instituted any such
proceedings; neither the Borrower, nor any ERISA Affiliate has completely or
partially withdrawn under Sections 4201 or 4204 of ERISA from a Multiemployer
Plan; the Borrower and each of its ERISA Affiliates have met their minimum
funding requirements under ERISA with respect to all of their Plans and there
are no Unfunded Vested Liabilities, and neither the Borrower nor any ERISA
Affiliate has incurred any material liability to the PBGC under ERISA.
Section 6.9. Subsidiaries. As of the date hereof, Schedule
6.9 is a complete and correct list of all Subsidiaries of the Borrower.
Section 6.10. Credit Arrangements. Schedule 6.10 is a complete
and correct list of all agreements, indentures, purchase agreements, guaranties,
Capital Leases and other investments, agreements and arrangements in effect on
the date of this Agreement providing for or relating to extensions of credit in
the aggregate amounts of $250,000 or more to the Borrower or any of the
Guarantors for borrowed money (including agreements and arrangements for the
issuance of letters of credit or for acceptance financing but excluding
indebtedness which is non-recourse to the Borrower or the Guarantors) in respect
of which the Borrower or any of the Guarantors is in any manner directly or
contingently obligated; and the maximum principal or face amounts of the credit
in question, outstanding and which can be outstanding, are correctly stated, and
all Liens of any nature given or agreed to be given as security therefor are
correctly described or indicated in such Schedule.
Section 6.11. Operation of Business. The Borrower and the
Guarantors possess all licenses, permits, franchises, patents, copyrights,
trademarks and trade names, or rights thereto, to conduct their respective
businesses substantially as now conducted and as presently proposed to be
conducted except where the failure to obtain any of the foregoing would not
result in a material adverse effect upon the operations, business, properties,
or financial condition of the Borrower or any Operating Company or of the
Borrower and the Guarantors, taken as a whole.
Section 6.12. Hazardous Substances. Except as disclosed in the
Borrower's most recent report on Form 10-K or on Schedule 6.12 (a copy of which
has been provided to the Banks), (i) the Borrower and the Guarantors are in
material compliance with all applicable Environmental Laws, and have obtained
all necessary licenses and permits required to be issued pursuant to any
applicable Environmental Law and (ii) as of the date hereof, neither the
Borrower nor any of the Guarantors has received any notice or communication from
any governmental agency with respect to (a) any Hazardous Substance relative to
its operations, property or acts, or (b) any investigation, demand or request
pursuant to or enforcing any Environmental Law relating to it or its operations,
properties or acts, and no such investigation is pending or, to the knowledge of
the Borrower or any Guarantor, threatened.
Section 6.13. No Default on Outstanding Judgments or Orders.
Each of the Borrower and the Guarantors has satisfied all judgments, orders,
notices of violation and decrees and neither the Borrower nor any of the
Guarantors is in default with respect to any judgment, writ, injunction, decree,
notice of violation, rule or regulation of any court, arbitrator or federal,
state, municipal or other governmental authority, commission, board, bureau,
agency or instrumentality, domestic or foreign applicable to it.
33
Section 6.14. Labor Disputes and Acts of God. As of the date
hereof, neither the business nor the properties of the Borrower or any of the
Guarantors are affected by any fire, explosion, accident, strike, lockout or
other labor dispute, drought, storm, hail, earthquake, embargo, act of God or of
the public enemy or other casualty (whether or not covered by insurance),
materially and adversely affecting such business or properties or the operations
of the Borrower and the Guarantors taken as a whole, or the ability of the
Borrower or any Guarantor to perform its obligations hereunder (in each case,
after giving effect to insurance).
Section 6.15. Governmental Regulation. Neither the Borrower
nor any of the Guarantors is to regulation under the Public Utility Holding
Company Act of 1935, the Investment Company Act of 1940 or any other statute or
regulation limited its ability to incur indebtedness for money borrowed as
contemplated hereby.
Section 6.16. Partnership, Etc. Except as disclosed in
Schedule 6.16, neither the Borrower nor any Guarantor is a partner in any
partnership or a member in any limited liability partnership or company.
Section 6.17. No Forfeiture Proceedings. Neither the Borrower
nor any of the Guarantors is engaged in or proposes to be engaged in the conduct
of any business or activity which is likely to result in a Forfeiture
Proceeding, and no Forfeiture Proceeding against any of them is pending or, to
the best knowledge of the Borrower and the Guarantors as of the date hereof,
threatened.
Section 6.18. No Default or Event of Default. No Default or
Event of Default has occurred and is continuing under this Agreement.
Section 6.19. Solvency. Without giving effect to any
Guarantee executed in connection Agreement, each of the Borrower and the
Guarantors is Solvent. After giving effect to any such Guarantee, the Borrower
and the Guarantors, taken as a whole, are Solvent.
Section 6.20. Name. Except as set forth on Schedule 6.20,
during the five years prior to the making of this Agreement, neither the
Borrower nor any Guarantor has been known under, or transacted business using,
any name or trade style except for the name set forth above such entity's
signature on this Agreement.
Section 6.21. Other Agreements . Neither the Borrower nor any
Guarantor, is a party to any indenture, loan or credit agreement or any lease or
other agreement or instrument or subject to any charter or corporate restriction
which would, in any case or in the aggregate have a material adverse effect on
its ability to carry out its obligations hereunder or under the Facility
Documents. Neither the Borrower, nor any of the Guarantors is in default in any
respect in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any agreement or instrument material to its
business to which it is a party.
Section 6.22. Eligible Properties. The Borrower and the
Guarantors own each of the Eligible Properties free and clear of all liens or
encumbrances other than liens or encumbrances that secure indebtedness
aggregating, in the case of any such Eligible Property, less than 30% of the
annualized and normalized year-to-date Net Operating Income for such property
capitalized at 12.0% at the time of determination. The Borrower has provided to
the Banks true and correct
34
and complete copies of all leases applicable to the Eligible Properties and
neither the Borrower nor any Guarantor, knows of any present default (whether
monetary or non-monetary) under or with respect to any of such leases. Each of
such leases is in full force and effect and has not been modified or otherwise
amended.
Section 6.23. Title Insurance. The Borrower and the Guarantors
have with respect to each Real Property Asset that is an owned property a fully
paid owner's title insurance policy and with respect to each Real Property Asset
that is a loan secured by a mortgage on real property a fully paid mortgagee's
title insurance policy.
Section 6.24. Y2K. Any reprogramming required to permit the
proper functioning, in and following the year 2000, of (a) the Borrower's , each
of the Borrower's Subsidiaries' or any Guarantor's computer systems and (b)
equipment containing embedded microchips (including systems and equipment
supplied by others or, to the Borrower's knowledge without having undertaken any
independent investigation, with which the Borrower's, any Subsidiary's or any
Guarantor's systems interface) and the testing of all such systems and
equipment, as so reprogrammed, have been completed as of the Closing Date. The
cost to the Borrower, each of its Subsidiaries and each Guarantor of such
reprogramming and testing and of the reasonably foreseeable consequences of the
year 2000 to the Borrower, each of its Subsidiaries and each Guarantor
(including, without limitation, reprogramming errors and the failure of others'
systems or equipment) will not result in a Default or Event of Default or have a
material adverse effect on the business properties, assets, prospects or
condition (financial or otherwise) of the Borrower or any Guarantor. Except for
such of the reprogramming referred to in the preceding sentence as may be
necessary, the computer and management information systems of the Borrower, each
of its Subsidiaries and each Guarantor are and, with ordinary course upgrading
and maintenance, will continue to be sufficient to permit the Borrower, each of
its Subsidiaries and each Guarantor to conduct their respective businesses
without having a material adverse effect on the business properties, assets,
prospects or condition (financial or otherwise) of the Borrower or any
Guarantor.
ARTICLE 7.
AFFIRMATIVE COVENANTS.
So long as any of the Notes or any other Obligations shall
remain unpaid or any Bank shall have any Commitment hereunder, the Borrower and
each Guarantor shall:
Section 7.1. Maintenance of Existence. Except as otherwise
provided in this Agreement, preserve and maintain its corporate existence and
remain in good standing in the jurisdiction of its organization, and qualify and
remain qualified, as a foreign corporation in each jurisdiction in which such
qualification is required.
Section 7.2. Conduct of Business. Continue to engage
principally in the principal business conducted by it on the date hereof.
Section 7.3. Maintenance of Properties. Maintain, keep and
preserve, all of its properties (tangible and intangible) necessary or useful in
the proper conduct of its business in good working order and condition, ordinary
wear and tear excepted.
35
Section 7.4. Maintenance of Records. Keep adequate records and
books of account, in which complete entries, reflecting all financial
transactions of such Person, will be made.
Section 7.5. Maintenance of Insurance.
(a) With respect to each Operating Company, maintain insurance
covering its assets and its business with financially sound and reputable
insurance companies or associations properly licensed to do business in the
jurisdictions where inventory is located in such amounts and covering such risks
(including, without limitation, products liability) as are usually carried by
companies engaged in the same or a similar business and similarly situated and
as are required by the Facility Documents. The Borrower shall provide the Banks
notice that such policies have been paid in full and shall deliver certified
copies of the policy or policies of such insurance or certificates of insurance
to the Banks if the Banks so request.
(b) With respect to the Borrower or any Guarantor that is not
an Operating Company, provide copies of evidence of insurance provided by any
tenant of a Real Estate Asset as required by the lease relating to such property
and, if any tenant is in default of its obligation to maintain insurance or if
any Real Estate Asset becomes vacant, the Borrower or the Guarantor, as the case
may be, shall maintain such insurance as is required by Section 7.11 hereof.
Section 7.6. Compliance with Laws. Comply and cause each
tenant of the Eligible Properties to comply with all applicable laws, rules,
regulations and orders, and maintain all permits necessary to operate at the
Eligible Properties.
Section 7.7. Right of Inspection. (a) Subject to the terms of
any lease relating to any Real Estate Asset, at any reasonable time upon
reasonable notice during normal business hours from time to time, permit any
Agent or any agent or representative thereof, to make physical inspections of
each Real Estate Asset and to examine and make copies and abstracts from the
records and books of account of, and visit the properties of, such Person and to
discuss the affairs, finances and accounts of such Person with any of its
officers and directors and such entity's independent accountants. In addition,
if during the course of any such examination hereunder, anything comes to the
Agent's attention which causes the Agent to be concerned that there may be an
environmental condition at any Real Estate Asset that is an Eligible Property,
the Agent may require the Borrower to permit the Agent to conduct such
environmental inspections as the Agent shall deem necessary with respect to such
property at the Borrower's expense; provided, however, that the Borrower may,
within 10 days of receipt of notice from the Agent of its intention to so
inspect such Eligible Property, elect not to permit the Agent to conduct such
examination in which event such Real Estate Asset shall no longer be considered
an Eligible Property for purposes of calculating the Borrowing Base;
(b) In addition to the inspection rights of the Agent pursuant
to subparagraph (a) of this Section, the Agent shall be permitted to conduct
annual due diligence investigations (which may include site inspections) of the
Eligible Properties. The scope of such investigations shall be determined by the
Agent and the costs of such investigations up to $15,000 per year, shall be
borne by the Borrower and shall be paid out of the Administrative Fee.
Section 7.8. Reporting Requirements. Furnish directly to each
of the Banks:
36
(a) as soon as available and in any event within 90 days after
the end of each fiscal year of the Borrower, audited, consolidated financial
statements of the Borrower and the Guarantors, which shall include consolidated
balance sheets of the Borrower and the Guarantors as of the end of such fiscal
year, together with consolidated income statements and statements of cash flows
of the Borrower and the Guarantors for such fiscal year and as of the end of and
for the prior fiscal year, all prepared in accordance with GAAP and accompanied
by an unqualified opinion on such consolidated financial statements by a
nationally recognized independent certified public accountants reasonably
acceptable to the Banks, together with management prepared corresponding
consolidating financial statements, all prepared by or under the supervision of
the Chief Financial Officer of the Borrower in accordance with GAAP;
(b) as soon as available and in any event within 45 days after
the end of each of the first, second and third quarters of each fiscal year of
the Borrower, consolidated and consolidating financial statements of the
Borrower and the Guarantors, which shall include consolidated and consolidating
balance sheets of the Borrower and the Guarantors as of the end of each such
quarter, together with consolidated and consolidating income statements and
statements of cash flows of the Borrower and the Guarantors for each such
quarterly period and for the period commencing at the end of the previous fiscal
year and ending with the end of such quarter, all in reasonable detail and
stating in comparative form the respective figures of the corresponding date and
period in the previous fiscal year and all prepared by or under the supervision
of the chief financial officer of the Borrower in accordance with GAAP (subject
to year-end adjustments and except for the absence of notes prepared in
accordance with GAAP);
(c) simultaneously with the delivery of the financial
reporting statements referred to in (a) and (b) above, a certificate of the
Chief Executive Officer or the Chief Financial Officer of the Borrower,
certifying that to the best of his knowledge (i) no Default or Event of Default
has occurred and is continuing, or if a Default or Event of Default has occurred
and is continuing, a statement as to the nature thereof and the action which is
proposed to be taken with respect thereto, with computations demonstrating
compliance (or non-compliance, as the case may be with the covenants contained
in Article 9, and (ii) such financial statements have been prepared in
accordance with GAAP (subject, in the case of interim statements, to year end
adjustments and except for the absence of notes thereto prepared in accordance
with GAAP);
(d) simultaneously with the delivery of the annual financial
statements referred to in Section 7.8(a) above, a certificate of the independent
public accountants who audited such statements to the effect that, in making the
examination necessary for the audit of such statements, they have obtained no
knowledge of any condition or event which constitutes a Default or Event of
Default, or if such accountants shall have obtained knowledge of any such
condition or event, specifying in such certificate each such condition or event
of which they have knowledge and the nature and status thereof;
(e) Quarterly, as soon as available and, in any event, not
later than the dates financial statements are required to be delivered pursuant
to (a) and (b) above, a Borrowing Base Certificate;
(f) Annually, not later than February 15 of each year, the
Borrower's business plan and projections of financial statements for the
immediately succeeding year illustrating the projected
37
income statements, balance sheets and statement of cash flows, each in form and
substance satisfactory to the Banks;
(g) Quarterly, as soon as available and, in any event, not
later than the dates financial statements are required to be delivered pursuant
to (a) and (b) above, a report detailing the performance of all operations of
the Borrower and the Guarantors by business segment, in form and substance
satisfactory to the Banks;
(h) Property financial information in a form consistent with
the form of information provided on Schedule 7.8(h) hereto;
(i) promptly after the Borrower or any Guarantor becomes aware
of the commencement thereof, notice of (a) all actions, suits, and proceedings
before any court or governmental department, commission, board, bureau, agency
or instrumentality, domestic or foreign, affecting the Borrower or any
Guarantor, including, without limitation, any such proceeding to any alleged
violation of any Environmental Law and including any proceedings relating to any
matter if a determination adverse to the Borrower and the Guarantors in such
proceeding would have a material adverse effect upon the operations, business,
properties or financial condition of the Borrower or any Operating Company or of
the Borrower and the Guarantors, taken as a whole, or (b) default under any
lease or mortgage with respect to any Real Estate Asset which would have a
material adverse effect upon the operations, business, properties or financial
condition of the Borrower or any Operating Company or on the Borrower and the
Guarantors, taken as a whole;
(j) immediately after the Borrower or any Guarantor has
knowledge of any Default or Event of Default has occurred, a written notice
setting forth the details of such Default or Event of Default and the action
which is proposed to be taken by the Borrower with respect thereto;
(k) as soon as possible and in any event within five Banking
Days after the Borrower knows that any of the events or conditions specified
below with respect to any Plan or Multiemployer Plan have occurred or exist, a
statement signed by a Chief Executive Officer or the Chief Financial Officer of
the Borrower setting forth details respecting such event or condition and the
action, if any, which the Borrower or its ERISA Affiliate proposes to take with
respect thereto (and a copy of any report or notice required to be filed with or
given to PBGC by the Borrower or an ERISA Affiliate with respect to such event
or condition):
(i) any Reportable Event;
(ii) the filing, under Section 4041 of ERISA
of a notice of intent to terminate any Plan or the termination
of any Plan;
(iii) the institution by PBGC of proceedings
under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or the
receipt by the Borrower or any ERISA Affiliate of a notice
from a Multiemployer Plan that such action has been taken by
PBGC with respect to such Multiemployer Plan;
(iv) receipt by the Borrower or ERISA
Affiliate of notice from a Multiemployer Plan of the complete
or partial withdrawal by the Borrower or any ERISA Affiliate
38
under Section 4201 or 4204 of ERISA from a Multiemployer Plan
imposing withdrawal liability (as of the date of such
notification) exceeding $250,000 or requiring payments
exceeding $250,000 per annum;
(v) receipt by the Borrower or any ERISA
Affiliate of notice from a Multiemployer Plan that it is in
reorganization or insolvency pursuant to Section 4241 or 4245
of ERISA or that it intends to terminate or has terminated
under Section 4041A of ERISA if the aggregate annual
contributions of the Borrower and all ERISA Affiliates to all
Multiemployer Plans which are then in reorganization or being
terminated have been increased over amounts contributed to
such Multiemployer Plans for the plan year immediately
preceding the plan year in which the reorganization or
termination occurs by an amount exceeding $250,000; and
(vi) the institution of a proceeding by a
fiduciary or any Multiemployer Plan against the Borrower or
any ERISA Affiliate to enforce Section 515 of ERISA for
delinquent contributions in excess of $100,000 which
proceeding is not dismissed within 30 days;
(l) annually, not later than June 1 of each year, a property
cash flow analysis for the Borrower and the Guarantors, which shall be in form
and substance satisfactory to the Banks;
(m) upon the request of the Banks, promptly after the
furnishing thereof, copies of any reports or records required to be filed with
or furnished to any insurance carriers or governmental authorities relating to
Hazardous Substances located on any of real properties owned or occupied by the
Borrower or any Guarantor;
(n) promptly after the Borrower or any Guarantor knows of the
commencement or threat thereof, notice of any Forfeiture Proceeding;
(o) promptly after such judgment, decree or order is entered,
notice of any judgment, decree or order entered against the Borrower or any of
the Guarantors;
(p) promptly and, in any event, within 5 Banking Days, notice
of any event which would (i) require an interim adjustment of $500,000 or more
to the Borrowing Base in accordance with the provisions of Section 3.8 hereof or
(ii) would require an interim adjustment of the Borrowing Base, regardless of
amount, if as a result of such adjustment Aggregate Outstandings would exceed
the Borrowing Base; and
(q) promptly upon the chief executive officer or the chief
financial officer of the Borrower or any Guarantor obtaining knowledge thereof,
notice of any dispute with any account debtor involving an amount in excess of
$100,000 and notice of all disputes with account debtors involving aggregate
amounts in dispute in excess of $500,000; and
(r) such other information respecting the condition or
operations, financial or otherwise of the Borrower or any of the Guarantors or
ERISA Affiliates, including copies of other reports filed from time to time
within the Securities and Exchange Commission, as the Banks may from time to
time reasonably request.
39
Section 7.9. Payment of Obligations. Pay, discharge or
otherwise satisfy at or before maturity or before they become delinquent, as the
case may be, all material Indebtedness and other material obligations of
whatever nature.
Section 7.10. Payment of Taxes.
(a) From time to time when the same shall become due and
payable, pay and discharge all taxes of every kind and nature, all general and
special assessments, levies, permits, inspection and license fees, all water and
sewer rents and charges, and all other public charges whether of a like or
different nature, imposed upon or assessed against the Eligible Properties, or
any part thereof, or upon the revenues, rents, issues, income and profits of the
Eligible Properties, or any part thereof, or arising in respect of the
occupancy, use of possession thereof unless such claims are being contested in
good faith by appropriate proceedings provided that adequate reserves in
conformity with GAAP shall have been provided on the books of the Borrower
and/or such Guarantor(s). Borrower and each Guarantor shall, upon the request of
the Agent, deliver to the Agent receipts evidencing the payment of all such
taxes, assessments, levies, fees, rents and other public charges imposed upon or
assessed against the Eligible Properties or any part thereof, or the revenues,
rents, issues, income or profits thereof.
(b) Pay from time to time when the same shall become due, all
lawful claims and demands of mechanics, materialmen, laborers and others, which
claims and demands, if unpaid, might result in, or permit the creation of, a
lien on the Eligible Properties or any part thereof, or on the revenues, rents,
issues, income and profits arising therefrom, unless such claims are being
contested in good faith by appropriate proceedings provided that adequate
reserves in conformity in the GAAP shall have been provided on the books of the
Borrower and/or the Guarantors.
Section 7.11. Insurance.
(a) Keep or enforce the obligation of tenants to keep, the
Real Estate Assets insured against damage by fire and other hazards coveted by
the standard extended coverage insurance policy. Subject to the terms of the
applicable leases, all insurance policies and endorsements required pursuant to
this Section shall be fully paid for, nonassessable and contain such provisions
and expiration dates and be in such form and amounts and issued by such
insurance companies satisfactory to the Banks. In addition, after the occurrence
of an Event of Default hereunder, the Banks may require the Borrower and the
Guarantors to carry or to require their respective tenants to carry such other
insurance on the Real Estate Assets including oil storage tank insurance, in
such amounts as may from time to time be required by institutional lenders,
against insurable casualties which at the time are commonly insured against in
the case of premises similarly situated.
(b) Subject to the terms of the applicable leases, if any
Eligible Property or any part thereof, is located in an area which has been
identified by the Secretary of Housing and Urban Development as a flood hazard
area, the Borrower and the Guarantors shall keep, or cause their respective
tenants to keep, for as long as any Indebtedness remains unpaid, such Eligible
Property covered by flood insurance in an amount at least equal to the value
assigned to such Eligible Property in the Borrowing Base.
40
(c) The Borrower shall give the Agent prompt notice of any
loss to any Real Estate Asset covered by insurance if such loss would decrease
the value of such Real Estate Asset by $500,000 or more or (ii) would have a
material adverse affect on the Borrowing Base or upon the Borrower and its
Subsidiaries on a consolidated basis. For so long as no Event of Default has
occurred and is continuing, (i) the Borrower shall have the sole right to adjust
losses covered by insurance, (ii) the proceeds from any adjusted insurance claim
shall be paid to the Borrower, which proceeds shall be used by the Borrower for
the restoration, rebuilding, renovation and/or repair of the property so
requiring same. If, at the time of any loss, an Event of Default has occurred
and is continuing, (i) the Borrower shall not adjust said loss without the prior
written consent of the Banks; and (ii) any and all insurance proceeds shall be
paid to the Agent and the Agent, with the consent of the Required Banks, in its
sole discretion, may use such proceeds to either (i) repay all or any portion of
the Loans or (ii) restore, rebuild, renovate and/or repair the damaged property.
In the event the Agent makes the insurance proceeds available to the Borrower,
the Borrower agrees to promptly commence and diligently continue to perform the
repairs, restoration, renovation or rebuilding of the damaged property so as to
restore such property to be in full compliance with all laws and so that such
property shall be at least equal in value and general utility as prior to such
damage or destruction. All provisions of this Section 7.11(c) and the Banks'
rights and remedies hereunder are subject to the insurance provisions of the
applicable leases on the Real Estate Assets and proceeds for rebuilding which
shall exceed $500,000 shall be disbursed by the Agent in conformity with its
normal construction lending procedures.
Section 7.12. Condemnation. The Borrower, immediately upon
obtaining of the knowledge of the institution of any proceedings for the
condemnation of any of the Real Estate Assets or any part of any Real Estate
Assets that may materially effect the value of the Borrowing Base or that may
materially adversely effect the Borrower and its Subsidiaries, on a consolidated
basis, will notify the Agent of the pendency of such proceeding. Subject to the
provisions of the applicable leases, after the occurrence of an Event of Default
hereunder, the Agent may participate in any such proceeding and the Borrower,
from time to time, will deliver to the Agent all instruments requested by it to
permit such participation. In the event of such condemnation proceeding after
the occurrence of an Event of Default hereunder, the award or compensation
payable is hereby assigned to and shall be paid to the Agent. The Agent shall be
under no obligation to question the amount of any such award or compensation. In
any such condemnation proceedings after the occurrence of an Event of Default
hereunder, the Agent may be represented by counsel selected by the Agent. The
Borrower, upon request by the Agent, shall make, execute and deliver any and all
instruments requested for the purpose of confirming of the assignment of the
aforesaid awards and compensation to the Agent free and clear of any liens,
charges or encumbrances of any kind or nature whatsoever. All provisions of this
Section 7.12 and the Banks' rights and remedies hereunder are subject to the
condemnation provisions of the applicable leases on the Real Estate Assets.
Section 7.13. Subsidiaries. Simultaneously with their
creation, give to the Agent notice of each new Subsidiary and cause all
Subsidiaries to become Guarantors hereunder and, in connection therewith to
execute and deliver Guarantees to the Banks.
41
ARTICLE 8.
NEGATIVE COVENANTS.
So long as any of the Notes or other Obligations shall remain
unpaid or any Bank shall have any Commitment hereunder, neither the Borrower nor
any Guarantor shall:
Section 8.1. Indebtedness. Create, incur, assume or suffer to
exist, or permit any Subsidiary to create, incur, assume or suffer to exist any
Indebtedness, except for any of the following types of Indebtedness:
(a) Indebtedness of the Borrower under this Agreement or the
Notes;
(b) Indebtedness described in Schedule 8.1 and any other
existing Indebtedness of any Guarantor relating to extensions of credit of less
than $250,000 that is non-recourse to the Borrower or any other Guarantor and
any refinancing of any such Indebtedness secured by a mortgage on any real
property of the Borrower or any Guarantor provided that such refinancing does
not increase the principal amount of such Indebtedness or change non-recourse to
recourse Indebtedness;
(c) Provided that no Event of Default then exists or would
result therefrom, Indebtedness of the Borrower, or any such Guarantor, secured
by purchase money Liens permitted by Section 8.2 provided that the maximum
amount of such Indebtedness incurred during any fiscal year (excluding
non-recourse indebtedness secured by real property) shall not exceed $500,000;
(d) unsecured trade indebtedness and customer deposits
incurred in the ordinary course of business;
(e) in the case of the Guarantors, the guarantees of the
Obligations pursuant to the Guarantees; and
(f) Indebtedness of any Post-Closing Guarantor, provided that
such Indebtedness is non-recourse to the Borrower or to any other Subsidiary of
the Borrower.
Section 8.2. Liens. Create, incur, assume or suffer to exist
or permit any Subsidiary to create, incur or suffer to exist, any Lien upon or
with respect to any of its properties, now owned or hereafter acquired, or grant
to any third party any rights to enforce a "negative pledge" with respect to its
properties or assets, except the following liens ("Permitted Liens"):
(a) Liens in favor of the Banks securing the Obligations
pursuant to the provisions hereof;
(b) Liens for taxes or assessments or other government charges
or levies if not yet due payable or if due and payable if they are being
contested in good faith by appropriate proceedings and for which appropriate
reserves are maintained in conformity with GAAP;
(c) Liens imposed by law, such as mechanic's, materialmen's,
landlord's, warehousemen's and carrier's Liens, and other similar Liens,
securing obligations incurred in the ordinary course of business which are not
past due for more than 30 days, or which are being contested in good faith by
appropriate proceedings and for which appropriate reserves in accordance with
GAAP have been established, including, without limitation, any landlord's lien
which is being contested in good faith by appropriate proceedings and for which
appropriate reserves in accordance with GAAP have been established;
42
(d) Liens under workers' compensation, unemployment insurance,
social security or similar legislation (other than ERISA);
(e) Liens, deposits or pledges to secure the performance of
bids, tenders, contracts (other than contracts for the payment of money),
leases, public or statutory obligations, surety, stay appeal, indemnity,
performance or other similar bonds, or other similar obligations arising in the
ordinary course of business;
(f) easements, rights-of-way, restrictions and other similar
encumbrances which, in the aggregate, do not materially interfere with the
occupation, use and enjoyment by the Borrower of the property or assets
encumbered thereby in the normal course of its business or materially impair the
value of the property subject thereto;
(g) judgment and other similar Liens securing claims
aggregating not more than $250,000 arising in connection with court proceedings;
provided that the execution or other enforcement of such Liens is effectively
stayed and the claims secured thereby are being actively contested in good faith
and by appropriate proceedings;
(h) subject to the provisions of Section 8.1(c) hereof, (i)
purchase money Liens on any property heretofore or hereafter acquired or the
assumption of any Lien on any property existing at the time of such acquisition,
or (ii) a Lien incurred in connection with any conditional sale or other title
retention agreement or a Capital Lease; provided, that in the case of any of
(i)-(ii) above, (i) the creation or occurrence of any such Lien shall not
otherwise result in a Default or Event of Default with respect to any of the
other provisions of this Agreement, (ii) the Indebtedness secured by such Lien
shall not exceed 100% of the fair market value of the property encumbered by
such Lien, and (iii) such Lien shall not encumber any property of the Borrower
and the Subsidiaries other than the property so acquired;
(i) Liens arising by virtue of any statutory or common law
provision relating to banker's liens, rights of set off or similar rights with
respect to deposit accounts of the Borrower or any Subsidiary; and
(j) Liens securing Indebtedness permitted by Section 8.1
hereof.
Section 8.3. Investments. Make or permit any Subsidiary to
make any loan or advance to any Person or purchase or otherwise acquire or
permit any Subsidiary to purchase or otherwise acquire, any capital stock,
obligations or other securities of, make any capital contribution to, or
otherwise invest, after the date hereof, in, or acquire any interest in any
Person (each of the foregoing, an "Investment"), except (i) Permitted
Investments; (ii) Investments permitted under Section 8.7 hereof; (iii) the
Borrower may make loans or advances to the Operating Companies provided that the
outstanding principal balance of such loans or advances may not exceed an
aggregate of $10,000,000 at any one time; (iv) subject to the provisions of
Section 8.7 hereof, the Borrower or any Subsidiary may make loans secured by
mortgages on real property in the ordinary course of their business consistent
with past practices and (v) the Borrower may make investments in Prime
Hospitality Corp. in an aggregate amount not to exceed $8,000,000 (plus any
amounts available to be invested pursuant to Section 8.7(iii) provided that such
investments
43
may not be funded with the proceeds of any Loan hereunder and provided further
that all such investments shall be made in compliance with all applicable laws,
rules and regulations. All amounts referred to in this Section shall be valued
at cost.
Section 8.4. Sale of Assets. Sell, lease, assign, transfer or
otherwise dispose of or permit any Subsidiary to sell, lease, assign, transfer
or otherwise dispose of any of its now owned or hereafter acquired assets
(except to the Borrower), except for: (a) assets disposed of in the ordinary
course of business (it being understood that the Borrower and the Guarantors
sell Real Estate Assets the ordinary course of business); (b) the sale or other
disposition of assets no longer used or useful in the conduct of its business;
or (c) the sale or other disposition of any Operating Company or of all or
substantially all of the assets of any Operating Company, provided, that: (i)
such sale or disposition is negotiated on an arms length basis and the
consideration paid in connection with such sale or disposition reflects the fair
market value of the property sold or disposed of; (ii) the Banks shall have been
provided with copies of all documents executed in connection with sale or
disposition; (iii) the Banks shall be satisfied with the terms and conditions of
such sale or disposition and (iv) the Borrower and Guarantors remain in pro
forma compliance with all terms hereof.
Section 8.5. Transactions with Affiliates. Enter into or
permit any Subsidiary to enter into any transaction, including, without
limitation, the purchase, sale or exchange of property or the rendering of any
service, with any Affiliate, except (unless elsewhere restricted hereunder) (a)
transactions between the Borrower and any Subsidiary or any Subsidiary with any
other Subsidiary, (b) upon fair and reasonable terms, in the ordinary course of
and pursuant to the reasonable requirements of, the relevant Person's business
and upon fair and reasonable terms no less favorable to the relevant Person than
would obtain in a comparable arm's length transaction with a Person not an
Affiliate; provided that, after giving effect to any such transaction (i.e., any
of the transactions referred to in any of (a)-(b) above), no Default or Event of
Default shall have occurred.
Section 8.6. Mergers. Etc. Merge or consolidate with, or sell,
assign, lease or otherwise dispose of or permit any Subsidiary to merge or
consolidate with, or sell, assign, 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 Person, except that any
Guarantor may merge with or into any other Guarantor or the Borrower hereunder,
provided that, in the case of a transaction that involves the Borrower, the
Borrower is the surviving entity, and provided that, after giving effect to any
such transaction, no Default or Event of Default shall have occurred.
Section 8.7. Acquisitions. After the date hereof, make an
Acquisition or permit any Subsidiary to make an Acquisition, except that (i) the
Borrower or any Guarantor may acquire Real Estate Assets provided that the
aggregate consideration paid or to be paid (in the case of a purchase),
including all indebtedness assumed by the Borrower or any Guarantor in
connection with such Acquisition, or advanced (in the case of a loan) in
connection with any such transaction that is wholly funded with proceeds of
Revolving Credit Loans hereunder, shall not exceed $25,000,000 in any single
transaction (assuming the transaction involves multiple asset locations,
provided that no single asset may account for more than $15,000,000 of the total
transaction value), (ii) the Borrower or any Guarantor may acquire Real Estate
Assets provided that the aggregate consideration paid or to be paid (in the case
of a purchase), including all
44
indebtedness assumed by the Borrower or any Guarantor in connection with such
Acquisition, or advanced (in the case of a Loan) in connection with any such
transaction that is wholly funded with proceeds of Revolving Credit Loans
hereunder, shall not exceed $15,000,000 in any transaction (assuming the
transaction involves a single asset location); or (iii) the Borrower or any
Guarantor may acquire property or assets other than Real Estate Assets provided
that the aggregate consideration paid in connection with any such transaction
shall not exceed $5,000,000 and the aggregate consideration paid in connection
with all such transactions permitted by this clause (iii) during the term hereof
shall not exceed $10,000,000. The provisions of this Section 8.7 shall not
restrict the Borrower's ability to repurchase its capital stock in accordance
with Section 8.11 below.
Section 8.8. No Activities Leading to Forfeiture. Engage or
permit any Subsidiary to engage in the conduct of any business or activity which
would be reasonably likely to result in a Forfeiture Proceeding.
Section 8.9. Corporate Documents: Fiscal Year. Amend, modify
or supplement or permit any Subsidiary to amend, modify or supplement its
certificate or articles of incorporation or by-laws or, in the case of any
partnership, its partnership agreement, in any way which would materially
adversely affect the ability of the Borrower or any Subsidiary to perform its
obligations hereunder or change its fiscal year.
Section 8.10. Hazardous Substances; Use of Real Property. Use,
or permit the use of, or permit any Subsidiary to use or permit the use of any
of its real properties for conducting any manufacturing, industrial, commercial
or retail business which involves in any way the introduction, manufacture,
generation, processing or storage of any Hazardous Substance in violation, in
any material respect of any applicable Environmental Law.
Section 8.11. Dividends, etc. Declare or pay any dividends on
its capital stock or purchase, redeem, retire or otherwise acquire any of its
capital stock at any time outstanding, except that any Subsidiary wholly owned
by the Borrower may declare and pay dividends to the Borrower, and except that
the Borrower may repurchase its capital stock in amounts not to exceed
$2,000,000 in any fiscal year starting after the date of Closing or $5,000,000
during the term of this Agreement.
Section 8.12. Other Material Adverse Change. Suffer or permit
any other material adverse change in the business, properties, financial
condition, prospects or operations of the Borrower or any Subsidiary; in the
business, properties, financial condition, prospects or operations of the
Borrower and the Guarantors taken as a whole; or in the ability of the Borrower
or any Guarantor to perform its obligations under this Agreement or under any of
the Facility Documents.
Section 8.13. Sales of Receivables; Sale Leasebacks. Sell,
discount or otherwise dispose of or permit any Subsidiary to sell, discount or
otherwise dispose of notes, accounts receivable or other obligations owing to
such entity, with or without recourse, except for purposes of collection in the
ordinary course of business; or sell or permit any Subsidiary to sell any asset
pursuant to an arrangement to thereafter lease such asset from the purchaser
thereof.
45
Section 8.14. Leases of Eligible Properties. Enter into leases
with respect to Eligible Properties on terms and conditions which are not
commercially reasonable within the markets in which such properties are located.
Section 8.15. Maintenance of Real Estate Assets. Subject to
the terms of any leases with respect to any Real Estate Assets, commit any
waste, or permit any tenant to commit any waste on the Real Estate Assets, or
any part thereof, or make any change, or permit any tenant to make any change,
in the use of the Real Estate Assets or any part thereof, which shall in any way
increase any ordinary fire or other hazard arising out of construction or
operation. The Borrower and the Guarantors shall, at all times, maintain or
cause any tenants to maintain the Real Estate Assets in good operating order and
condition and shall promptly make or cause any tenants to make, from time to
time, all repairs, renewals, replacements, additions and improvements in
connection therewith which are needful or desirable to such end.
ARTICLE 9.
FINANCIAL COVENANTS.
So long as any of the Notes or other Obligations shall remain
unpaid, or any Bank shall have any Commitment under this Agreement, the Borrower
and the Guarantors shall:
Section 9.1. Limitation on Indebtedness. Not permit Total
Adjusted Outstanding Funded Indebtedness of the Borrower and the Guarantors, on
a consolidated basis, to exceed 50% of the Capitalization Value of the Borrower
and the Guarantors, on a consolidated basis.
Section 9.2. Minimum Equity Value. Maintain, on a consolidated
basis, a minimum Equity Value of $90,000,000.
Section 9.3. Minimum Interest Coverage Ratio. Maintain
quarterly, on a consolidated basis, a ratio of (i) annualized and normalized
Consolidated EBITDA to (ii) annualized and normalized Consolidated Interest
Expense of not less than 2.25:1.00.
Section 9.4. Minimum Debt Service Coverage Ratio. Maintain
quarterly, on a consolidated basis, a ratio of (i) annualized and normalized
Consolidated EBITDA less gains from the sale of properties and other
non-recurring income to (ii) annualized and normalized Consolidated Debt Service
of not less than 1.15:1.00.
Section 9.5. Minimum Eligible Properties Debt Service Coverage
Ratio. Maintain quarterly, on a consolidated basis, a ratio of (i) annualized
and normalized Eligible Property EBITDA to (ii) Revolving Credit Loan Debt
Service of not less than 2.00:1.00.
Section 9.6. Limitation of Capital Expenditures. Not make
Capital Expenditures excluding expenditures for the acquisition of Real Estate
Assets, in excess of an aggregate of $3,000,000 in any fiscal year on a
consolidated basis.
Section 9.7. Minimum Capitalization Value. Maintain at all
times, on a consolidated basis, a minimal Capitalization Value of $150,000,000.
Section 9.8. Limitation on Operating Leases . Not enter into
operating leases requiring
46
the Borrower and the Guarantors to make more than $500,000 in lease payments in
any calendar year, on a consolidated basis.
ARTICLE 10.
EVENTS OF DEFAULT.
Section 10.1. Events of Default. Any of the following events
shall be an "Event of Default":
(a) The Borrower shall (A)(i) fail to pay the principal of or
interest on any Loan or Note as and when due and payable fail to pay any fee or
other amount due hereunder as and when due and payable; or (B) fail to make any
required prepayment as and when due and payable in accordance with the terms of
this Agreement;
(b) Any representation or warranty made or deemed made by the
Borrower or by any Guarantor in this Agreement or in any other Facility Document
or which is contained in any certificate, document, opinion, financial or other
statement furnished to the Banks at any time pursuant to any Facility Document
shall prove to have been incorrect in any material respect on or as of the date
made or deemed made;
(c) The Borrower shall: (i) fail to perform or observe any
term, covenant or agreement contained in Section 2.3, in Articles 4, 8 or 9 or
Sections 7.7 (subject to the provisions of the leases relating to the Real
Estate Assets), 7.8 or 12.3; or (ii) fail to perform any other term, covenant or
agreement on its part to be performed or observed (other than obligations
specifically referred to in Section 10.1(a)) in any Facility Document and, in
the case of this clause (ii) only, such failure shall continue for 10
consecutive business days;
(d) The Borrower or any of the Guarantors shall: (i) fail to
make when due any payments with respect to any Indebtedness, including but not
limited to indebtedness for borrowed money (other than the payment obligations
described in Section 10.1 (a) above), of the Borrower or such Subsidiary, as the
case may be, or any interest or premium thereon, when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) or, if such
Indebtedness has no stated due date, before an action for collection is
commenced; or (ii) fail to perform or observe any term, covenant or condition on
its part to be performed or observed any agreement or instrument relating to any
Indebtedness when required to be performed or observed, if the effect of such
failure to perform or observe is to accelerate, or to permit the acceleration
of, after the giving of notice or passage of time, or both, the maturity of such
Indebtedness, whether or not such failure to perform or observe shall be waived
by the holder of such Indebtedness (unless such waiver shall be absolute and
unconditional); or (iii) any Indebtedness shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled required
prepayment) prior to the stated maturity thereof; provided, however that it
shall not constitute an Event of Default hereunder unless the aggregate
principal amount of the Indebtedness referred to in clauses (i), (ii) and (iii)
above equals or exceeds (x) $500,000 in the case of recourse Indebtedness of the
Borrower or in the case of Indebtedness relating to Eligible Properties or (y)
$1,000,000 in the case of Indebtedness of any Guarantors that is non-recourse to
the Borrower or any other Guarantor which relates to assets other than Eligible
Properties;
47
(e) The Borrower or any of the Guarantors (i) shall generally
not, or be unable to, or shall admit in writing its or their inability to, pay
its or their debts as such debts become due; or (ii) shall make an assignment
for the benefit of creditors, petition or apply to any court or otherwise for
the appointment of a custodian, receiver or trustee for it or a substantial part
of its assets; or (iii) shall, as debtor, commence any proceeding under any
bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction, whether now or hereafter in
effect; or (iv) shall have had any such petition or application filed or any
such proceeding shall have been commenced, against it or them, in which an
adjudication or appointment is made or order for relief is entered, or which
petition, application or proceeding remains undismissed for a period of 30 days
or more; or (v) by any act or omission shall indicate its or their consent to,
approval of or acquiescence in any such petition, application or proceeding or
order for relief or the appointment of a custodian, receiver or trustee for all
or any substantial part of its property; (vi) shall suffer any such
custodianship, receivership or trusteeship to continue undischarged for a period
of 30 days or more; or (vii) on a consolidated basis, shall cease to be Solvent.
(f) One or more judgments, decrees or orders for the payment
of money in excess of $250,000 in the aggregate in respect of uninsured or
unbonded claims shall be rendered against the Borrower or any of the Guarantors
and such judgments, decrees or orders shall continue unsatisfied and in effect
for a period of 30 consecutive days without being vacated, discharged, satisfied
or stayed or bonded pending appeal;
(g) An event or condition specified in Section 7.8(k) hereof
shall occur or exist with respect to any Plan or Multiemployer Plan and, as a
result of such event or condition, together with all other such events or
conditions, the Borrower or any ERISA Affiliate shall incur or in the opinion of
the Bank shall be reasonably likely to incur a liability to a Plan, a
Multiemployer Plan or PBGC (or any combination of the foregoing) which is, in
the determination of the Bank, material in relation to the financial condition,
operations, business or prospects of the Borrower or any Subsidiary;
(h) Any Forfeiture Proceeding shall have been commenced with
respect to the Borrower or any Subsidiary;
(i) Any of the Assignments, the Security Agreements or
Guarantees shall at any time after its execution and delivery and for any
reason, cease to be in full force and effect or shall be declared null and void,
or the validity or enforceability thereof shall be contested by the Borrower or
the Guarantors or any of them, or any of the Borrower or the Guarantors shall
deny that it has any further liability or obligation under an Assignment, a
Security Agreement or a Guarantee to which it is a party, or any of such parties
shall fail to perform any of its material obligations under any such document;
or
(j) a Change in Control shall occur.
Section 10.2. Remedies. Upon the occurrence of any Event of
Default hereunder, the Required Banks may, by notice to the Borrower, (i)
declare the Commitments to be terminated, whereupon the same shall forthwith
terminate, and (ii) declare the outstanding principal of the Notes, all interest
thereon and all other Obligations to be forthwith due and payable, whereupon the
48
Notes, all such interest and all such amounts shall become and be forthwith due
and payable, without presentment, demand, protest or further notice of any kind,
all of which are hereby expressly waived by the Borrower; provided, that, in the
case of an Event of Default referred to in Section 10.1(e) or Section 10.1(h)
above, the Commitments shall be immediately terminated, and the Notes, all
interest thereon and all other amounts payable under this Agreement or the Notes
shall be immediately due and payable without notice, presentment, demand,
protest or other formalities of any kind, all of which are hereby expressly
waived by the Borrower.
ARTICLE 11.
THE AGENT; RELATIONS AMONG BANKS.
Section 11.1. Appointment, Powers and Immunities of Agent.
Each Bank hereby irrevocably (but subject to removal by the Required Banks
pursuant to Section 11.9) appoints and authorizes the Agent to act as its agent
hereunder and under any other Facility Document with such powers as are
specifically delegated to the Agent by the terms of this Agreement and any other
Facility Document, together with such other powers as are reasonably incidental
thereto. The Agent shall have no duties or responsibilities except those
expressly set forth in this Agreement and any other Facility Document, and shall
not by reason of this Agreement be a trustee for any Bank. The Agent shall not
be responsible to the Banks for any recitals, statements, representations or
warranties made by the Borrower, or any officer or official of the Borrower, or
any other Person contained in this Agreement or any other Facility Document, or
in any certificate or other document or instrument referred to or provided for
in, or received by any of them under this Agreement or any other Facility
Document, or for the value, legality, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Facility Document
or any other document or instrument referred to or provided for herein or
therein, or for the failure by the Borrower to perform any of its obligations
hereunder or thereunder. The Agent may employ agents and attorneys-in-fact and
shall not be responsible, except as to money or securities received by it or its
authorized agents, for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. Neither the Agent nor any
of its directors, officers, employees or agents shall be liable or responsible
for any action taken or omitted to be taken by it or them hereunder or under any
other Facility Document or in connection herewith or therewith, except for its
or their own gross negligence or willful misconduct. The Borrower shall pay any
fee agreed to by the Borrower and the Agent with respect to the Agent's services
hereunder.
Section 11.2. Reliance by Agent. The Agent shall be entitled
to rely upon any certification, notice or other communication (including any
thereof by telephone, telefax, telex, telegram or cable) believed by it to be
genuine and correct and to have been signed or sent by or on behalf of the
proper Person or Persons, and upon advice and statements of legal counsel,
independent accountants and other experts selected by the Agent. The Agent may
deem and treat each Bank as the holder of the Loans made by it for all purposes
hereof unless and until a notice of the assignment or transfer thereof
satisfactory to the Agent signed by such Bank shall have been furnished to the
Agent, but the Agent shall not be required to deal with any Person who has
acquired a participation in any Loan from a Bank. As to any matters not
expressly provided for by this Agreement or any other Facility Document, the
Agent shall in all cases be fully protected in acting, or in refraining from
acting, hereunder in accordance with instructions signed by the Required Banks,
and such instructions of the Required Banks and any action taken or failure to
49
act pursuant thereto shall be binding on all of the Banks and any other holder
of all or any portion any Loan.
Section 11.3. Defaults. The Agent shall not be deemed to have
knowledge of the occurrence of a Default or Event of Default (other than the
non-payment of principal of or interest or fees on the Loans to the extent the
same is required to be paid to the Agent for the account of the Banks) unless
the Agent has received notice from a Bank or the Borrower specifying such
Default or Event of Default. In the event that the Agent receives such a notice
of the occurrence of a Default or Event of Default, the Agent shall give prompt
notice thereof to the Banks (and shall give each Bank prompt notice of each such
non-payment). The Agent shall (subject to Section 11.8) take such action with
respect to such Default or Event of Default which is continuing as shall be
directed by the Required Banks; provided that, unless and until the Agent shall
have received such directions, the Agent may 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 interest of the Banks; and provided further that the
Agent shall not be required to take any such action which it determines to be
contrary to law.
Section 11.4. Rights of Agent as a Bank. With respect to its
Commitment and the Loans made by it, the Agent in its capacity as a Bank
hereunder shall have the same rights and powers hereunder as any other Bank and
may exercise the same as though it were not acting as the Agent, and the term
"Bank" or "Banks" shall, unless the context otherwise indicates, include the
Agent in its capacity as a Bank. The Agent or any Bank and their respective
Affiliates may (without having to account therefor to any other Bank) accept
deposits from, lend money to (on a secured or unsecured basis as otherwise
permitted hereunder), and generally engage in any kind of banking, trust or
other business with, the Borrower or any of the Guarantors (and any of their
Affiliates). In the case of the Agent, it may do so as if it were not acting as
the Agent, and the Agent may accept fees and other consideration from the
Borrower or any of the Guarantors for services in connection with this Agreement
or otherwise without having to account for the same to the Banks. Although the
Agent or a Bank or their respective Affiliates may in the course of such
relationships and relationships with other Persons acquire information about the
Borrower or any of the Guarantors or Affiliates and such other Persons, neither
the Agent nor such Bank shall have any duty to disclose such information to the
other Banks except as otherwise required pursuant to Facility Documents.
Section 11.5. Indemnification of Agent. The Banks agree to
indemnify the Agent (to the extent not reimbursed under Section 12.3 or under
the applicable provisions of any other Facility Document, but without limiting
the obligations of the Borrower under Section 12.3 or such provisions), ratably
in accordance with the respective Obligations of the Borrower then due and
payable to each of them (or, if no Loans are at the time outstanding, ratably in
accordance with their respective Commitments), for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever which may be imposed
on, incurred by or asserted against the Agent in any way relating to or arising
out of this Agreement, any other Facility Document or any other documents
contemplated by or referred to herein or the transactions contemplated hereby or
thereby (including, without limitation, the costs and expenses which the
Borrower is obligated to pay under Section 12.3 or under the applicable
provisions of any other Facility Document but excluding, unless a Default or
Event of Default has occurred, normal administrative costs and expenses
incidental to the performance of its agency duties hereunder) or the enforcement
50
of any of the terms hereof or thereof or of any such documents or instruments;
provided that no Bank shall be liable for any of the foregoing to the extent
they arise from the gross negligence or willful misconduct of the party to be
indemnified.
Section 11.6. Documents. The Agent will forward to each Bank,
promptly after the Agent's receipt thereof, a copy of each report, notice or
other document required by this Agreement or any other Facility Document to be
delivered to the Agent for such Bank.
Section 11.7. Non-Reliance on Agent and Other Banks. Each Bank
agrees that it has, independently and without reliance on the Agent or any other
Bank, and based on such documents and information as it has deemed appropriate,
made its own credit analysis of the Borrower and the Guarantors and decision to
enter into this Agreement and that it will, independently and without reliance
upon the Agent or any other Bank, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under this Agreement or any other
Facility Document. The Agent shall not be required to keep itself informed as to
the performance or observance by the Borrower of this Agreement or any other
Facility Document or any other document referred to or provided for herein or
therein or to inspect the properties or books of the Borrower or any Subsidiary,
except as provided herein. Except for notices, reports and other documents and
information expressly required to be furnished to the Banks by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Bank with any credit or other information concerning the affairs, financial
condition or business of the Borrower or any Subsidiary (or any of their
Affiliates) which may come into the possession of the Agent or of its
Affiliates. The Agent shall not be required to file this Agreement, any other
Facility Document or any document or instrument referred to herein or therein,
for record or give notice of this Agreement, any other Facility Document or any
document or instrument referred to herein or therein, to anyone.
Section 11.8. Failure of Agent to Act. Except for action
expressly required of the Agent hereunder, the Agent shall in all cases be fully
justified in failing or refusing to act hereunder unless it shall have received
further assurances (which may include cash collateral) of the indemnification
obligations of the Banks under Section 11.5 in respect of any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action.
Section 11.9. Resignation or Removal of Agent. Subject to the
appointment and acceptance of a successor Agent as provided below, the Agent may
resign at any time by giving written notice thereof at least 30 Banking Days
prior thereto to the Banks and the Borrower, the Agent may be removed at any
time with cause by the Required Banks and the Agent may be removed at any time
without cause by the Required Banks if with the prior written consent of the
Borrower; provided that the Borrower and the other Banks shall be promptly
notified thereof. Upon any such resignation or removal, the Required Banks shall
have the right to appoint a successor Agent. If no successor Agent shall have
been so appointed by the Required Banks and shall have accepted such appointment
within 30 days after the retiring Agent's giving of notice of resignation or the
Required Banks' removal of the retiring Agent, then the retiring Agent may, on
behalf of the Banks, appoint a successor Agent, which shall be a Bank. The
Required Banks or the retiring Agent, as the case may be, shall upon the
appointment of a Successor Agent promptly so notify the Borrower and the other
Banks. Upon the acceptance of any appointment as Agent hereunder by a successor
Agent, such successor Agent shall thereupon succeed to and
51
become vested with all the rights, powers, privileges and duties of the retiring
Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder. The retiring Agent shall execute all documents or
instruments of assignment as shall be necessary to vest in the successor Agent
all rights of the retiring Agent hereunder. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this Article 11
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Agent.
Section 11.10. Amendments Concerning Agency Function. The
Agent shall not be bound by any waiver, amendment, supplement or modification of
this Agreement or any other Facility Document which affects its duties hereunder
or thereunder unless it shall have given its prior consent thereto.
Section 11.11. Liability of Agent. The Agent shall not have
any liabilities or responsibilities to the Borrower on account of the failure of
any Bank to perform its obligations hereunder or to any Bank on account of the
failure of the Borrower to perform its obligations hereunder or under any other
Facility Document.
Section 11.12. Transfer of Agency Function. Without the
consent of the Borrower or any Bank, the Agent may at any time or from time to
time transfer its functions as Agent hereunder to any of its offices wherever
located, provided that the Agent shall promptly notify the Borrower and the
Banks thereof.
Section 11.13. Non-Receipt of Funds by the Agent. Unless the
Agent shall have been notified by a Bank or the Borrower (either one as
appropriate being the "Payor") prior to the date on which such Bank is to make
payment hereunder to the Agent of the proceeds of a Loan or the Borrower is to
make Payment to the Agent, as the case may be (either such payment being a
"Required Payment"), which notice shall be effective upon receipt, that the
Payor does not intend to make the Required Payment to the Agent, the Agent may
assume that the Required Payment has been made and may, in reliance upon such
assumption (but shall not be required to), make the amount thereof available to
the intended recipient on such date and, if the Payor has not in fact made the
Required Payment to the Agent, the recipient of such payment shall, on demand,
repay to the Agent the amount made available to it together with interest
thereon for the period commencing on the date such amount was so made available
by the Agent until the date the Agent recovers such amount at a rate per annum
equal to the Federal Funds Rate for such day (when the Agent recovers such
amount from a Bank) or equal to the rate of interest applicable to such Loan
(when the Agent recovers such amount from the Borrower) and, if such recipient
shall fail to make such payment promptly, the Agent shall be entitled to recover
such amount, on demand, from the Payor, with interest as aforesaid.
Section 11.14. Withholding Taxes. Each Bank represents that it
is entitled to receive any payments to be made to it hereunder without the
withholding of any tax and will furnish to the Agent such forms, certifications,
statements and other documents as the Agent may request from time to time to
evidence such Bank's exemption from the withholding of any tax imposed by any
jurisdiction or to enable the Agent to comply with any applicable laws or
regulations relating thereto. Without limiting the effect of the foregoing, if
any Bank is not created or organized under the laws of the United States of
America or any state thereof, in the event that the payment of interest by the
Borrower is treated for U.S. income tax purposes as derived in
52
whole or in part from sources from within the U.S., such Bank will furnish to
the Agent, no less frequently than annually, Form 4224 or Form 1001 of the
Internal Revenue Service, or such other forms, certifications, statements or
documents, duly executed and completed by such Bank as evidence of such Bank's
exemption from the withholding of U.S. tax with respect thereto. The Agent shall
not be obligated to make any payments hereunder to such Bank in respect of any
Loan or such Bank's Commitment until such Bank shall have furnished to the Agent
the requested form, certification, statement or document.
Section 11.15. Several Obligations and Rights of Banks. The
failure of any Bank to make any Loan to be made by it on the date specified
therefor shall not relieve any other Bank of its obligation to make its Loan on
such date, but no Bank shall be responsible for the failure of any other Bank to
make a Loan to be made by such other Bank. The amounts payable at any time
hereunder to each Bank shall be a separate and independent debt, and each Bank
shall be entitled to protect and enforce its rights arising out of this
Agreement, and it shall not be necessary for any other Bank to be joined as an
additional party in any proceeding for such purposes.
Section 11.16. Pro Rata Treatment of Revolving Credit Loans,
Etc. Except to the extent otherwise provided: (a) each borrowing under Article 2
shall be made from the Revolving Credit Lenders, each reduction or termination
of the amount of the Revolving Credit Commitments under Section 2.8 shall be
applied to the Revolving Credit Commitments of the Revolving Credit Lenders, and
each payment of the fees referenced in Article 3, shall be made by and held for
the account of the Banks, pro rata in accordance with their respective
Commitment Proportions; (b) each prepayment and payment of principal of or
interest on Loans of a particular type and a particular Interest Period shall be
made to the Agent for the account of the Bank's holding Loans of such type and
Interest Period pro rata in accordance with the respective unpaid principal
amounts of such Loans of such Interest Period held by such Banks.
Section 11.17. Sharing of Payments Among Banks. If a Bank
shall obtain payment of any principal of or interest on any Loan made by it
through the exercise of any right of setoff, banker's lien, counterclaim, or by
any other means, it shall promptly purchase from the other Banks a participation
in the Loans made by the other Banks in such amounts, and make such other
adjustments from time to time as shall be equitable to the end that all the
Banks shall share the benefit of such payment (net of any expenses which may be
incurred by such Bank in obtaining or preserving such benefit) pro rata in
accordance with the unpaid principal and interest on the Loans held by each of
them. To such end the Banks shall make appropriate adjustments among themselves
(by the resale of any such participation sold or otherwise) if such payment is
rescinded or must otherwise be restored. The Borrower agrees that any Bank so
purchasing a participation in the Loans made by other Banks may exercise all
rights of setoff, banker's lien, counterclaim or similar rights with respect to
such participation. Nothing contained herein shall require any Bank to exercise
any such right or shall affect the right of any Bank to exercise, and retain the
benefits of exercising, any such right with respect to any other indebtedness of
the Borrower.
53
ARTICLE 12.
MISCELLANEOUS.
Section 12.1. Amendments and Waivers. Except as otherwise
expressly provided in this Agreement, any provision of this Agreement may be
amended or modified only by an instrument in writing signed by the Borrower and
the Required Banks, and any provision of this Agreement may be waived by the
Borrower and by an instrument signed by the Required Banks (if such provision
requires performance by the Borrower), including, but not limited to, any Event
of Default; provided that no amendment, modification or waiver shall, unless by
an instrument signed by all of the Banks: (a) increase or extend the term, or
extend the time or waive any requirement for the reduction or termination of or
otherwise change the Commitment, (b) extend the date fixed for the payment of
principal of or interest on any Loan, (c) reduce the amount of any payment of
principal thereof or the rate at which interest is payable thereon or any fee
payable hereunder, (d) alter the terms of this Section 12.1, (e) change the fees
payable to any Bank except as expressly otherwise provided herein, (f) permit
the Borrower, or any of the Guarantors, to transfer or assign any of its
obligations hereunder or under the Facility Documents, (g) release the security
interest in and Lien on or the right to a security interest in and Lien, any
collateral securing the Borrower's obligations thereunder, or (h) change the
definition of the term "Required Banks". No failure on the part of any Bank to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof or preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
Section 12.2. Usury. Anything herein to the contrary
notwithstanding, the Obligations shall be subject to the limitation that
payments of interest shall not be required to the extent that receipt thereof
would be contrary to provisions of law applicable to a Bank limiting rates of
interest which may be charged or collected by such Bank. If any of the
above-referenced payments of interest, together with any other charges or fees
deemed in the nature of interest, exceed the maximum legal rate, then the Banks
shall have the right to make such adjustments as are necessary to reduce any
such aggregate interest rate (based on the foregoing aggregate amount) to the
maximum legal rate, and if any Bank ever receives, collects or applies any such
excess, it shall be deemed a partial repayment of principal and treated as such;
and if principal is paid in full, any remaining excess shall be refunded to the
Borrower. The Borrower waives any right to prior notice of such adjustment and
further agrees that any such adjustment may be made by the Banks subsequent to
notification from the Borrower that such aggregate interest charged exceeds the
maximum legal rate.
Section 12.3. Expenses and Indemnification. The Borrower shall
reimburse each of the Banks on demand for all reasonable costs, expenses and
charges (including, without limitation, reasonable fees and charges of such
Banks' special counsel, Xxxxxxx Xxxxx, P.C. up to a cap of $45,000, plus
disbursements of such counsel up to a cap of $15,000), incurred by such Bank in
connection with the preparation, review, execution and delivery of this
Agreement and the Facility Documents. Without limiting the generality of the
foregoing, the Borrower shall pay all recording fees and charges and recording
taxes incurred by any of the Banks hereunder or in connection herewith. In
addition, the Borrower shall reimburse each Bank for all of its reasonable costs
and expenses incurred from and after the occurrence of an Event of Default in
connection with the perfection, protection, enforcement or preservation of any
rights under this Agreement, the Notes or the other Facility Documents. The
Borrower agrees to indemnify each Bank and their respective directors, officers,
employees, representatives and agents from, and hold each of them harmless
against, any and all losses, liabilities, claims, damages or expenses of any
kind (including, without limitation, the reasonable fees and expenses of counsel
for such
54
Person in connection with any investigative, administrative or judicial
proceeding, whether or not such Person shall be designated a party thereto)
incurred by any of them arising out of or by reason of any investigation or
litigation or other proceedings (including any threatened investigation or
litigation or other proceedings) relating to or arising out of this Agreement,
any actual or proposed use by the Borrower of the proceeds of the Loans, or to
the failure of the Borrower to perform or observe any of the terms, covenants or
conditions on its part to be performed or observed under this Agreement or under
any of the Facility Documents. The indemnity provided in this Section shall not
extend to any such losses, liabilities, claims, damages or expenses incurred by
reason of the gross negligence, willful misconduct or bad faith of the Person to
be indemnified.
Section 12.4. Special Provisions Regarding Collateral.
Simultaneously with the execution and delivery of this Agreement, the Borrower
and the Guarantors have deposited with the Agent for the benefit of the Banks,
the Assignments duly executed and in proper form for recording in each of the
jurisdictions where Eligible Properties are located. In addition, the Operating
Companies have deposited with the Agent for the benefit of the Banks the
Security Agreements, together with UCC-I financing statements, each duly
executed and in proper form for recording in each of the jurisdictions in which
the Operating Companies maintain assets. The Agent agrees to hold such documents
and not to file or record such documents unless and until any Event of Default
shall occur hereunder. The Agent further agrees that upon the happening of an
Event of Default hereunder, other than an Event of Default referred to in
Section 10.1 (e) hereof (in which case no notice shall be required), the Agent
shall give the Borrower fourteen (14) days' prior written notice before
recording any of such documents. The costs incurred after the occurrence of an
Event of Default in connection with recording any such document shall be borne
by the Borrower whether or not any such document is recorded by the Agent. If
any of the Assignments or financing statements require amendment, re-execution
or any revision prior to being in a form acceptable to be recorded, the Borrower
shall be responsible for all costs incurred from and after the occurrence of an
Event of Default in connection with such amendment, re-execution or revision and
the Borrower shall do all things necessary at the request of the Agent in order
to permit such documents to be filed or recorded whether or not any such
documents are filed or recorded. Furthermore, upon the occurrence of an Event of
Default and the expiration of such fourteen (14) day period (except in the case
of an Event of Default under Section 10.1(e) hereof in which case no such notice
shall be required), and upon request of the Agent, the Borrower shall cause the
Operating Companies to do all things necessary or required to perfect the
Agent's liens upon any inventory or other collateral located outside of the
United States. To the extent that the Agent or any Bank incurs any of such costs
in connection with the foregoing directly, such costs be reimbursed by the
Borrower on demand. The failure of the Agent to file any of the foregoing or the
improper filing thereof shall not relieve the Borrower or any Guarantor of any
Obligations.
Section 12.5. Survival. The obligations of the Borrower under
Section 2.3(b), Article 4 and Section 12.3 shall survive the repayment of the
Loans and the Termination Date for a period corresponding to the maximum
applicable statute of limitations in effect in the State of New York from time
to time.
Section 12.6. Assignments; Participation. This Agreement shall
be binding upon, and shall inure to the benefit of Borrower, the Banks and their
respective successors and assigns, except that the Borrower may not assign or
transfer its rights or obligations hereunder. Each Bank may sell participations
55
in or, with the prior written consent of the Borrower, which shall not be
unreasonably withheld and which shall not be required during the occurrence and
continuance of an Event of Default, assign all or any part of any Loan to
another bank or other entity, in which event (a) in the case of an assignment,
upon notice thereof by the Bank to the Borrower, the assignee shall have, to the
extent of such assignment (unless otherwise provided therein), the same rights,
benefits and obligations (including, without limitation, a ratable assumption of
the assigning Bank's Commitment and Commitment Proportion hereunder) as it would
have if it were a Bank hereunder; and (b) in the case of a participation, the
participant shall have no rights under the Facility Documents and all amounts
payable by the Borrower under Articles 2 and 3 shall be determined as if such
Bank had not sold such participation. Such Bank may furnish any information
concerning the Borrower in the possession of such Bank from time to time to
assignees and participants (including prospective assignees and participants);
provided that such Bank shall require any such prospective assignee or such
participant (prospective or otherwise) to agree in writing to maintain the
confidentiality of such information. There shall be no limit on the number of
assignments or participants that may be granted by any Bank except that
assignments shall be in minimum amounts of $5,000,000 and in integral multiples
of $1,000,000 in excess thereof. Notwithstanding any such assignment, any rights
and remedies available to the Borrower for any breaches by an assigning Bank of
its obligations hereunder while a Bank shall be preserved after such assignment
and such Bank shall not be relieved of any liability to the Borrower due to such
breach. Each Bank may at any time pledge all or any portion of its rights under
the Facility Documents including any portion of the Notes to any Federal Reserve
Bank organized under Section 4 of the Federal Reserve Act. No such pledge or
enforcement thereof shall release any Bank from its obligations under any of the
Facility Documents.
Section 12.7. Notices. Unless the party to be notified
otherwise notifies the other party in writing as provided in this Section, and
except as otherwise provided in this Agreement, notices shall be given to the
Borrower by certified or registered mail or by recognized overnight delivery
services to such party at its address on the signature page of this Agreement.
In addition, notices of borrowing pursuant to Section 2.4 may be delivered by
telecopier, provided that such telecopied notices shall be confirmed by sending
the original signed copy of such notice to the Banks by certified or registered
mail or by recognized overnight delivery services. Initially, notice shall be
delivered to each party hereto at the addresses set forth on the signature page
hereof. Notices shall be effective: (a) if given by registered or certified
mail, 72 hours after deposit in the mails with postage prepaid, addressed as
aforesaid; or (b) if given by recognized overnight delivery service, on the
Banking Day following deposit with such service addressed as aforesaid; or (c)
if given by telecopy, when the telecopy is transmitted to the telecopy number as
aforesaid and confirmed with a confirmation receipt.
Section 12.8. Setoff. The Borrower agrees that, in addition to
(and without limitation of) any right of setoff, banker's lien or counterclaim a
Bank may otherwise have, each Bank shall be entitled, at its option without any
prior notice to Borrower (any such notice being expressly waived by the Borrower
to the extent permitted by applicable law), to offset balances (general or
special, time or demand, provisional or final) held by it for the account of the
Borrower at any offices of such Bank or any of its Affiliates, in Dollars or in
any other currency, against any amount payable by the Borrower to such Bank
under this Agreement or such Bank's Note which is not paid when due (regardless
of whether such balances are then due to the Borrower), in which case it shall
promptly notify the Borrower thereof; provided that such Bank's failure to give
56
such notice shall not affect the validity thereof. ANY AND ALL RIGHTS TO REQUIRE
A BANK TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL
THAT SECURES THE OBLIGATIONS OF THE BORROWER HEREUNDER, PRIOR TO EXERCISING ITS
RIGHTS OF SETOFF ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED BY THE
BORROWER. Payments by the Borrower thereof hereunder shall be made without
setoff or counterclaim.
Section 12.9. Jurisdiction; Immunities.
(a) THE BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY NEW YORK STATE OR UNITED STATES FEDERAL COURT SITTING IN NEW
YORK, NASSAU OR SUFFOLK COUNTIES OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE NOTES, AND THE BORROWER HEREBY IRREVOCABLY
AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH NEW YORK STATE OR FEDERAL COURT. THE BORROWER IRREVOCABLY
CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING
BY THE MAILING (BY CERTIFIED OR REGISTERED MAIL) COPIES OF SUCH PROCESS TO THE
BORROWER AT THE ADDRESS SPECIFIED IN SECTION 12.7. THE BORROWER AGREES THAT A
FINAL JUDGMENT (INCLUDING ANY APPLICABLE APPEALS) IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. THE BORROWER
FURTHER WAIVES ANY OBJECTION TO VENUE IN SUCH STATE AND ANY OBJECTION TO AN
ACTION OR PROCEEDING IN SUCH STATE ON THE BASIS OF FORUM NON CONVENIENS. THE
BORROWER FURTHER AGREES THAT ANY ACTION OR PROCEEDING BROUGHT AGAINST ANY BANK
SHALL BE BROUGHT ON ONLY IN NEW YORK STATE OR UNITED STATES FEDERAL COURT
SITTING IN NEW YORK COUNTY.
(b) EACH OF THE BANKS AND THE BORROWER MUTUALLY, KNOWINGLY,
VOLUNTARILY WAIVE ANY RIGHT THEY MAY HAVE TO JURY TRIAL WITH RESPECT TO THIS
AGREEMENT AND THE OTHER FACILITY DOCUMENTS. THIS WAIVER CONSTITUTES A MATERIAL
INDUCEMENT FOR THE BANKS TO ENTER INTO THIS AGREEMENT AND MAKE THE LOANS
HEREUNDER.
(c) NOTHING IN THIS SECTION 12.9 SHALL AFFECT THE RIGHT OF ANY
BANK TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE
RIGHT OF ANY BANK TO BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWER, OR ITS
PROPERTY IN THE COURTS OF ANY OTHER JURISDICTIONS.
(d) TO THE EXTENT THAT THE BORROWER HAS OR HEREAFTER MAY
ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS
(WHETHER FROM SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID
OF EXECUTION, EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, IT
HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
AGREEMENT AND THE NOTES.
57
Section 12.10. Table of Contents; Headings. Any table of
contents and the headings and captions hereunder are for convenience only and
shall not affect the interpretation or construction of this Agreement.
Section 12.11. Severability. The provisions of this Agreement
are intended to be severable. If for any reason any provision of this Agreement
shall be held invalid or unenforceable in whole or in part in any jurisdiction,
such provision shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without in any manner affecting the validity
or enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.
Section 12.12. Counterparts. This Agreement may be executed in
any number of counterparts, all of which taken together shall constitute one and
the same instrument, and any party hereto may execute this Agreement by signing
any such counterpart.
Section 12.13. Integration. The Facility Documents set forth
the entire agreement among the parties hereto relating to the transactions
contemplated thereby and supersede any prior oral or written statements or
agreements with respect to such transactions.
Section 12.14. Governing Law. This Agreement shall be governed
by, and interpreted and construed in accordance with, the law of the State of
New York.
Section 12.15. Relief from Bankruptcy Stay. The Borrower
agrees that, in the event that such Borrower, any Guarantor or any of the
persons or parties constituting the Borrower or a Guarantor shall (i) file with
any bankruptcy court of competent jurisdiction or be the subject of any petition
under Title 11 of the U.S. Code, as amended ("Bankruptcy Code"), (ii) be the
subject of any order for relief issued under the Bankruptcy Code, (iii) file or
be the subject of any petition seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar relief under any
present or future federal or state act or law relating to bankruptcy,
insolvency, or other relief for debtors, (iv) have sought or consented to or
acquiesced in the appointment of any trustee, receiver, conservator, or
liquidator, or (v) be the subject of any judgment, or decree entered by any
court of competent jurisdiction approving a petition filed against such
readjustment, liquidation, dissolution, or similar relief under any present or
future federal or state act or law relating to bankruptcy, insolvency, or relief
for debtors, the Banks shall thereupon be entitled and the Borrower irrevocably
consents to immediate and unconditional relief from automatic stay by Section
362 of the Bankruptcy Code, or otherwise available to the Banks as provided for
herein, in the Notes, other Facility Documents delivered in connection herewith
and as otherwise provided by law, and the Borrower hereby irrevocably waives any
right to object to such relief and will not contest any motion by the Banks
seeking relief from the automatic stay and the Borrower will cooperate with the
Banks, in any manner requested by the Banks, in their efforts to obtain relief
from any such stay or other prohibition.
58
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized
as of the date first above written.
UNITED CAPITAL CORP.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxx
Title:Vice President
Address for Notices:
United Capital Corp.
United Capital Building
0 Xxxx Xxxxx
Xxxxx Xxxx, X.X. 00000
Telephone No.: (000) 000-0000
Telefax No.: (000) 000-0000
BANKS:
FLEET BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxx X. Xxxxxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxxxxx
Title: Vice President
Lending Office and Address for Notices:
Fleet Bank, National Association
1185 Avenue of the Xxxxxxxx,
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxxxx,
Vice President
Telephone No.: (000) 000-0000
Telefax No.: (000) 000-0000
59
MANUFACTURERS & TRADERS TRUST
COMPANY
By: /s/ Xxxx Xxxxxxxx
--------------------------------
Name: Xxxx Xxxxxxxx
Title: Vice President
Lending Office and Address for Notices:
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone No.: (000) 000-0000
Telefax No.: (000) 000-0000
BANK LEUMI USA
By: /s/ Xxxx Xxxxxxx
--------------------------------
Name: Xxxx Xxxxxxx
Title:Vice President
Lending Office and Address for Notices:
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
Telephone No.: (000) 000-0000
Telefax No.: (000) 000-0000
60
LIST OF EXHIBITS
EXHIBIT A FORM OF REVOLVING CREDIT NOTE
EXHIBIT A-1 FORM OF TERM NOTE
EXHIBIT B FORM OF BORROWING BASE CERTIFICATE
EXHIBIT C FORM OF ENVIRONMENTAL INDEMNITY
EXHIBIT D FORM OF GUARANTY
EXHIBIT E FORM OF SECURITY AGREEMENT
EXHIBIT F FORM OF OPINION
61
EXHIBIT A
FORM OF
REVOLVING CREDIT NOTE
$--------- December 31, 1999
Nassau County, New York
UNITED CAPITAL CORP., a corporation organized under the laws
of the State of Delaware (the "Borrower") for value received, hereby promises to
pay to the order of ___________________ (the "Bank") or its permitted successors
or assigns, at the office of Fleet Bank, National Association, at 1185 Avenue of
the Xxxxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, or its permitted successors
or assigns (the "Agent"), for the account of the Bank on or before the
Termination Date the principal sum of ______________________ ($__________) or,
if less, the amount loaned as Loans by the Bank to the Borrower pursuant to the
Credit Agreement referred to below, in lawful money of the United States of
America and in immediately available funds, on the date(s) and in the manner
provided in said Credit Agreement. The Borrower also promises to pay interest on
the unpaid principal balance hereof, for the period such balance is outstanding,
to the Agent for the account of the Bank, in like money, at the rates of
interest as provided in the Credit Agreement described below, on the date(s) and
in the manner provided in said Credit Agreement.
The holder of this Note shall record the date, type and amount
of each Loan made by the Bank, and the date and amount of each payment or
prepayment of principal of or interest on any Loan, and the principal amount
subject thereto and the interest rate with respect thereto on such computer,
magnetic disk, tape or other such electronic data storage and retrieval system
deemed adequate for such purpose by the Bank, in its sole and absolute
discretion, which record shall, constitute, absent manifest error, conclusive
evidence of the accuracy of the information so recorded, but no failure so to
record or any error in so recording shall affect the obligation of the Borrower
to repay any such Loans, with interest thereon, as provided in the Credit
Agreement or herein.
This is one of the Notes referred to in that certain Credit
Agreement (as amended from time to time the "Credit Agreement") dated as of
December ___, 1999 among the Borrower, the Agent, the Bank and _________________
and evidences the Loans made by the Bank thereunder. All terms not defined
herein shall have the meanings given to them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the
maturity of principal upon the occurrence of certain Events of Default and for
prepayments on the terms and conditions specified therein. The Borrower waives
presentment, notice of dishonor, protest and any other notice or formality with
respect to this Note.
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The terms of this Note may not be changed orally, but only by
an instrument duly executed by the Borrower and the Banks.
This Note shall be governed by, and interpreted and construed
in accordance with, the laws of the State of New York.
UNITED CAPITAL CORP.
By:________________________
Name:
Title:
63
EXHIBIT A-1
FORM OF
TERM NOTE
$1,925,000 December 31, 1999
Melville, New York
UNITED CAPITAL CORP., a corporation organized under the laws
of the State of Delaware, having a principal place of business at 0 Xxxx Xxxxx,
Xxxxx Xxxx, Xxx Xxxx 00000 (the "Borrower"), for value received, hereby promises
to pay to the order of Fleet Bank, National Association (the "Bank") at the
office of the Bank located at 1185 Avenue of the Xxxxxxxx, 0xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, the principal sum of One Million Nine Hundred Twenty Five
Thousand Dollars ($1,925,000) in eleven (11) equal consecutive quarterly
installments of $175,000 in lawful money of the United States of America and in
immediately available funds, in the manner provided in the Credit Agreement
referred to below commencing on the last day of March, 2000, and continuing on
the last day of each June, September, December and March thereafter with the
final installment thereof being due on the Term Loan Maturity Date.
The Borrower shall pay interest on the unpaid principal
balance of this Term Note from time to time outstanding, at said office, at the
rates of interest, at the times and for the periods set forth in the Agreement
(as defined below).
All payments including prepayments of this Term Note shall be
made in lawful money of the United States of America in immediately available
funds. Except as otherwise provided in the Agreement, if a payment becomes due
and payable on a day other than a Banking Day, the maturity thereof shall be
extended to the next succeeding Banking Day, and interest shall be payable
thereon at the rate herein specified during such extension.
This Note is one of the Term Notes referred to in that certain
Credit Agreement dated as of December 31, 1999 among the Borrower and the Banks
party thereto (the "Agreement"), as such Agreement may be amended from time to
time, and is subject to prepayment and its maturity is subject to acceleration
upon the terms contained in said Agreement. All capitalized terms used in this
Term Note and not defined herein shall have the meanings given them in the
Agreement.
If any action or proceeding be commenced to collect this Term
Note or enforce any of its provisions, the Borrower agrees to pay all reasonable
costs and expenses of such action or proceeding and reasonable attorneys fees
and expenses and further expressly waive any and every right to interpose any
counterclaim in any such action or proceeding. The Borrower hereby submits to
the jurisdiction of the Supreme Court of the State of New York for purposes of
any action on or related to this Term Note, the liabilities, or the enforcement
of either or all of the same. The Borrower hereby expressly waives any and every
right to a trial by jury in any action on or related to this Term Note, the
liabilities or the enforcement of either or all of the same. The Bank may
transfer this Term note and may deliver the security or any part thereof to the
transferee or transferees, who shall thereupon become vested with all the powers
and rights
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above given to the Bank in respect thereto, and the Bank shall thereafter be
forever relieved and fully discharged from any liability or responsibility in
the matter. The failure of any holder of this Term note to insist upon strict
performance of each and/or all of the terms and conditions hereof shall not be
construed as or deemed to be a waiver of any such term or condition.
The Borrower and all endorsers and guarantors hereof waive
presentment and demand for payment, notice of non-payment, protest, and notice
of protest.
The terms of this Term Note may not be changed orally, but
only by an instrument duly executed by the Borrower and the Bank.
This Term Note shall be construed in accordance with and
governed by the laws of the State of New York.
UNITED CAPITAL CORP.
By:
-----------------------
Name:
Title:
65
EXHIBIT B
FORM OF
BORROWING BASE CERTIFICATE
UNITED CAPITAL CORP.
DATE:__________________
(000's Omitted)
(Capitalized term used herein and not defined herein
shall have the meanings ascribed to such terms
in the Credit Agreement dated as of
December __, 1999 among United Capital Corp., Fleet Bank, National Association
Manufacturers & Traders Trust Company and Bank Leumi USA)
1. Real Estate Borrowing Base
(a) (i) Aggregate annualized and
normalized year-to-date
Net Operating Income of
all unencumbered Eligible
Properties excluding Hotel
properties (see attached
schedule for property by
property breakdown) $_________________
(ii) Item 1(a)(i), capitalized at 10.5% $_________________
(iii) 60% of Item l(a)(ii) $_________________
(b) (i) Aggregate annualized and
normalized year-to-date Net
Operating Income of all
unencumbered Eligible Properties
that are hotel properties (see
attached schedule of property by
property breakdown).
$_________________
(ii) FF&E Reserve $_________________
(iii) Item 1(b)(i) minus Item (1)(b)(ii) $_________________
(iv) Item 1(b)(iii), capitalized at 10.5% $_________________
(v) 60% of Item 1(b)(iv), $_________________
(vi) The lesser of (i) $6,000,000 or (ii)
10% of Item 3 below calculated as
if Item 1(d) were the sum of Items
1(a)(iii) plus Item 1(b)(v) plus Item
1(c), plus Item 2(d), or (iii) Item
1(b)(v) $_________________
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(c) (i) Aggregate annualized and normalized
year-to-date Net Operating Income of
encumbered Eligible Properties $_________________
(ii) Item 1(c)(i), capitalizing at 12.0% $_________________
(iii) 50% of Item 1(c) $_________________
(iv) The lesser of Item 1(c)(iii)
or $10,000,000. $_________________
(d) Item (1)(a)(iii) plus Item 1(b)(vi) plus
Item 1(c)(iv) $_________________
2. Non-Real Estate Borrowing Base
(a) (i) Eligible Receivables $_________________
(ii) 75% of Item 2(a)(i) $_________________
(b) (i) Gross amount of Eligible Inventory $_________________
(ii) 50% of item 2(b)(i) $_________________
(c) The sum of items 2(a)(ii) and 2(b)(ii) $_________________
(d) The lesser of $10,000,000 or (c) $_________________
3. Borrowing Base
The sum of items 1(d) and 2(d) $
==================
The undersigned hereby represents and warrants that the above statement and the
information set forth herein is true and correct, and complete as of the date
specified above. The undersigned further represents and warrants that the
Borrower is in complete compliance with all terms and conditions set forth in
the Agreement and the other Facility Documents. The undersigned further
understands that your loans to the Borrower will be based upon your reliance on
the information contained herein.
UNITED CAPITAL CORP.
By:________________________
Name:
Title:
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EXHIBIT C
FORM OF
ENVIRONMENTAL INDEMNITY AGREEMENT
This Agreement made this 31st day of December, 1999 from
UNITED CAPITAL CORP., a Delaware corporation having an address at 0 Xxxx Xxxxx,
Xxxxx Xxxx, Xxx Xxxx 00000 (the "Indemnitor"), to FLEET BANK, NATIONAL
ASSOCIATION, a national banking association having an office at 000 Xxxxx Xxxxxx
Xxxx, Xxxxxxxx, Xxx Xxxx 00000 ("Fleet"), MANUFACTURERS & TRADERS TRUST COMPANY
("M&T") and BANK LEUMI USA ("Bank Leumi"; collectively with M&T and Fleet, the
"Banks").
Preliminary Statement
WHEREAS, the Indemnitor or one of its Subsidiaries is the
owner of each of the real properties set forth in Schedule A attached hereto
(said real properties being herein collectively called the "Land"; the Land,
together with all improvements now or hereafter located on the Land, being
herein collectively called the "Property");
WHEREAS, on the date hereof, pursuant to the terms of a Credit
Agreement, dated the date hereof (the "Credit Agreement"), the Banks have
extended credit to the Indemnitor in the aggregate principal amount of up to
$60,000,000 (the "Loan") secured by, among other things, assignments of leases
and rents with respect to each of the Properties (the "Assignments");
WHEREAS, as a condition to extending the Loan, Banks require
the Indemnitor to provide certain indemnities concerning existing and future
asbestos, polychlorinated biphenyls and petroleum products and any other
hazardous or toxic materials, wastes and substances which are defined,
determined or identified as such in any Laws (as hereinafter defined) (any such
asbestos, polychlorinated biphenyls and petroleum products and any such other
materials, wastes and substances being herein collectively called "Hazardous
Materials"); as used in this Agreement, the term "Laws" means federal, state or
local laws, rules or regulations (whether now existing or hereafter enacted or
promulgated) and any judicial or administrative interpretation thereof,
including any judicial or administrative orders or judgments;
WHEREAS, to induce the Banks to enter into the Credit
Agreement the above described transaction and to lend the indicated amount to
Indemnitor, Indemnitor has agreed to enter into this Agreement;
NOW THEREFORE, in consideration of the premises and other good
and valuable consideration, the receipt, and sufficiency of which are hereby
acknowledged, Indemnitor hereby represents, warrants and covenants to the Banks
as follows:
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1. Indemnitor covenants and agrees, to indemnify, protect and
save the Banks and each of their officers, directors, shareholders, employees or
agents (the "Indemnified Parties") harmless against and from any and all claims,
litigation, demands, judgments, suits, proceedings, costs, disbursements or
expenses (including, without limitation, attorneys', and experts' reasonable
fees and disbursements) of any kind or of any nature whatsoever (collectively,
the "Indemnified Matters") which may at any time be imposed upon, incurred by or
asserted or awarded against the Indemnified Parties arising from or out of:
(A) any Hazardous Materials on, in, under or affecting the
Property which affect all or any portion of the Property or
any surrounding areas, or
(B) the enforcement of this Agreement or the assertion by
the Indemnitor of any defense to its obligations hereunder
(except the successful defense of actual performance not
subject to further appeal),
whether any of such matters arise before or after the Banks exercising any of
their rights or remedies under the Assignments. Indemnified Matters shall
include, without limitation, all of the following: (i) the costs of removal of
any and all Hazardous Materials from all or any portion of the Property or any
surrounding areas (except that the indemnity provided for under this Agreement
shall not cover the costs of such removal from surrounding areas unless either
(a) removal is required by Laws or (b) any present or future use, operation,
development, construction, alteration or reconstruction of all or any portion of
the Property is or would be conditioned in any way upon, or is or would be
limited in any way until the completion of, such removal in accordance with
Laws), (ii) additional costs required by all applicable Laws to take necessary
precautions to protect against the release of Hazardous Materials on, in, under
or affecting the Property into the air, any body of water, any other public
domain or any surrounding areas and (iii) costs incurred to comply, in
connection with all or any portion of the Property or any surrounding areas,
with all applicable Laws with respect to Hazardous Materials (all removal work
referred to in clause (i) above, all work and actions to take precautions
against release referred to in clause (ii) above and all work and other actions
performed in order to comply with Laws referred to in clause (iii) above being
herein collectively called "Corrective Work"). The Banks' rights under this
Agreement shall be in addition to all rights of the Indemnified Parties under
the Credit Agreement, the Assignments, the notes secured by the Assignments (the
"Notes") and any guaranty or guaranties (whether of payment and/or performance)
given to the Banks in connection with the Loan and under any other documents or
instruments evidencing or securing the Loan (the Credit Agreement, the Notes,
any such guaranty or guaranties and such other documents or instruments, as
amended or modified from time to time, being herein called the "Loan Documents")
and payments by the Indemnitor under this Agreement shall not reduce the
Indemnitor's obligations and liabilities under any of the Loan Documents.
2. The liability of the Indemnitor under this Agreement shall
in no way be limited or impaired by any amendment or modification of the
provisions of the Loan Documents to or with the Banks. In addition, the
liability of Indemnitor under this Agreement shall in no way be limited or
impaired by (i) any extensions of time for performance required by any of the
Loan Documents, (ii) any sale, assignment or foreclosure of the Notes or any
sale or transfer of all or part of the Property, (iii) the accuracy or
inaccuracy of the representations and warranties made by the Indemnitor under
any of the Loan Documents, (iv) the release of the Indemnitor or any other
person from performance or observance of any of the agreements, covenants, terms
or conditions
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contained in any of the Loan Documents by operation of law, the Banks' voluntary
act, or otherwise, (v) the release or substitution in whole or in part of any
security for the Notes, (vii) the Banks' failure to record the Assignments or
file any UCC financing statement (or the Banks' improper recording or filing or
any thereof) or to otherwise perfect, protect, secure or insure any security
interest or lien given as security for the Notes or (viii) the repayment of all
Obligations to the Banks; and, in any such case, whether with or without notice
to the Indemnitor and with or without consideration.
3. No delay on the Banks' part in exercising any right, power
or privilege under any of the Loan Documents shall operate as a waiver of any
such privilege, power or right.
4. Except as herein provided, this Agreement shall be binding
upon and inure to the benefit of the Indemnitor and the Banks and their
respective heirs, personal representatives, successors and assigns, including,
as to the Banks, any holder of the Notes or any affiliate of the Banks which
acquired all or part of the Property by any sale, assignment or foreclosure, by
deed or other assignment in lieu of foreclosure, or otherwise. The benefits
granted the Indemnified Parties are not assignable except as indicated above. No
third party beneficiary rights are intended to be created hereby (except to any
Affiliates or participants of the Banks). Notwithstanding the foregoing, the
Indemnitor, without the prior written consent of the Banks in each instance, may
not assign, transfer or set over to another, in whole or in part, all or any
part of its benefits, rights, duties and obligations hereunder.
5. All notices hereunder shall be in writing and shall be
deemed to have been sufficiently given or served for all purposes when sent by
registered or certified mail, if to the Indemnitor, at its address stated on the
cover page hereof, and if to the Banks, to________________, or at such other
address of which a party shall have notified the party giving such notice in
writing in accordance with the foregoing requirements. Notice shall be deemed
given 3 business days after mailing.
6. No provision of this Agreement may be changed, waived,
discharged or terminated orally, by telephone or by any other means except by an
instrument in writing signed by the party against whom enforcement of the
change, waiver, discharge or termination is sought.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL IN
ALL RESPECTS BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO NEW YORK'S PRINCIPLES OF
CONFLICTS OF LAW). INDEMNITORS HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF ANY NEW YORK STATE OR FEDERAL COURT SITTING IN THE CITY OF NEW
YORK (OR ANY COUNTY IN NEW YORK STATE WHERE ANY PORTION OF THE PROPERTY IS
LOCATED) OVER ANY SUIT, ACTION, OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT.
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IN WITNESS WHEREOF, the Indemnitor has caused this Agreement
to be executed as of the date first written above.
UNITED CAPITAL CORP.
By:_____________________________
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
00
XXXXX XX XXX XXXX )
) SS.:
COUNTY OF NASSAU )
On the ____ day of __________, 1999, before me personally came
Xxxxxxx X. Xxxxxx, to me known, who, being duly sworn, did depose and say that
he resides at __________________; that he is the Vice President of United
Capital Corp., the corporation described in and which he executed the foregoing
instrument; that he signed his name thereto by order of the board of directors
of such corporation.
---------------------------
Notary Public
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EXHIBIT D
FORM OF
GUARANTEE
WHEREAS, FLEET BANK, NATIONAL ASSOCIATION, MANUFACTURERS &
TRADERS TRUST COMPANY and BANK LEUMI USA (the"Banks") have entered into a Credit
Agreement (the "Credit Agreement"), dated December 31, 1999, with UNITED CAPITAL
CORP. (the "Debtor"); and
WHEREAS, under the terms of the Credit Agreement, the Banks
have agreed to extend credit to the Debtor, which indebtedness will be evidenced
by certain promissory notes of the Debtor (the "Notes"), dated as of December
31, 1999, in the aggregate principal amount of $61,925,000;
WHEREAS, each of the undersigned (jointly and severally the
"Guarantors") is a direct or indirect subsidiary of the Debtor and has derived
or will derive direct benefit from the extension of credit to the Debtor; and
WHEREAS, the Banks will not extend such credit unless, among
other conditions, the undersigned Guarantors shall have executed and delivered
this Guarantee;
NOW, THEREFORE, in consideration of the Banks extending such
credit to the Debtor and other benefits accruing to Guarantors, the receipt and
sufficiency of which are hereby acknowledged, Guarantors hereby make the
following representations and warranties to the Banks and hereby covenant and
agree with the Banks as follows:
1. Guarantors, jointly and severally, irrevocably and
unconditionally guarantee to the Banks (i) timely payment in full by Debtor to
Banks of all payments due pursuant to the Notes (it being understood that this
is a guarantee of payment and not of collection), and (ii) timely payment and/or
performance, as applicable, of all other payment and performance obligations of
Debtor pursuant to the Notes, the Credit Agreement and all other documents and
instruments executed in connection therewith, or pursuant to any amendment,
modification or supplement to any of the foregoing (all of the foregoing under
clauses (i) and (ii) being collectively referred to as the "Guaranteed
Obligations"). If Debtor shall default in payment of any amount due pursuant to
the Notes beyond any applicable grace period or otherwise default beyond any
applicable grace period in the performance of the Guaranteed Obligations,
Guarantors, jointly and severally, irrevocably and unconditionally agree to pay
to the Banks upon demand the amount in default or to cure the default if it is a
non-payment default (it being understood, however, that a non-payment may result
in the acceleration of all indebtedness and a demand for payment in full by the
Guarantors, or any of them, under the Guarantee). Guarantors understand, agree
and confirm that the Banks may enforce this Guarantee up to the full amount of
the Guaranteed Obligations owing against the Guarantors or any of them without
proceeding against the Debtor, against any security for the Guaranteed
Obligations or against any other guarantor under any other guarantee covering
the Guaranteed Obligations.
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2. The Guarantors hereby acknowledge the Guaranteed
Obligations and hereby expressly waive: (i) presentment and demand for payment
of the principal of or interest thereon or any other sums of any nature
whatsoever with respect thereto, (ii) notice of acceptance of this Guarantee, or
of the extension of credit to the Debtor, (iii) notice of any default hereunder
or under any agreements between the Banks and the Debtor with respect to the
Guaranteed Obligations, and of all indulgences with respect thereto, (iv) demand
on the Debtor for observance or performance of, or enforcement of any terms or
provisions of any agreements between the Banks and the Debtor with respect to
the Guaranteed Obligations, (v) to the maximum extent permitted by applicable
law and except as otherwise provided herein, the benefit of all laws now or
hereafter in effect in any way limiting or restricting the liability of the
Guarantors under this Guarantee, including any and all right to stay of
execution and exemption of property in any action to enforce the liability of
the Guarantors hereunder and (vi) any other event or circumstance which may
constitute a release of or defense to the obligors under any of the Guaranteed
Obligations or any Guarantor under this Guarantee. In the event this Guarantee
shall be enforced by suit or otherwise, the Guarantors shall pay the Banks, on
demand, for all reasonable fees and expenses incurred by the Banks in connection
therewith, including, without limitation, the reasonable fees and expenses of
the Banks' counsel.
3. The Banks in their sole and absolute discretion, may at any
time and from time to time without the consent of, or notice to, Guarantors, or
any of them, without incurring responsibility to Guarantors, without impairing
or releasing the obligations of Guarantors hereunder, upon or without any terms
or conditions and in whole or in part (but in all events subject to the
applicable provisions of the Credit Agreement);
(a) by agreement with the Debtor, change the manner, place or
terms of payment of, and/or change or extend the time of payment of, increase
the amount of, or renew or alter any of the Guaranteed Obligations, any security
therefor, or any liability incurred directly or indirectly in respect thereof,
and the Guarantee herein made shall apply to the Guaranteed Obligations as so
changed, extended, increased, renewed or altered;
(b) exercise or refrain from exercising any rights against
Debtor or others or otherwise act or refrain from acting;
(c) release, settle or compromise any of the Guaranteed
Obligations, any security therefor or any liability (including any of those
hereunder) incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of Debtor to creditors of Debtor other than
Guarantors;
(d) consent to or waive any breach of, or any act, omission or
default under, the Credit Agreement or the Notes, or any of the instruments or
agreements referred to therein, or otherwise amend, modify or supplement any of
the foregoing;
(e) agree to the substitution, exchange, release or other
disposition of all or any part of any property securing the Guaranteed
Obligations;
(f) make advances for the purposes of performing any term or
covenant contained in any agreement between the Banks and the Debtor with
respect to which the Debtor may be in default;
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(g) assign or otherwise transfer all or any part of the
Guaranteed Obligations; and
(h) deal in all respects with the Debtor as if this Guarantee
were not in effect.
4. No invalidity, irregularity or unenforceability of all or
any part of the Guaranteed Obligations or of any security therefor shall affect,
impair or be a defense to this Guarantee, and this Guarantee is a primary, joint
and several obligation of Guarantors.
5. This Guarantee is a continuing one and all liabilities to
which it applies or may apply under the terms hereof shall be conclusively
presumed to have been created in reliance hereon. No failure or delay on the
part of the Banks (whether acting individually or through an agent), in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
expressly specified are cumulative and not exclusive of any rights or remedies
which the Banks (whether acting individually or through an agent), or any
subsequent holder of any Guaranteed Obligations would otherwise have. No notice
to or demand on Guarantors in any case shall entitle Guarantors to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Banks (whether acting individually or through an
agent), or any holder of any Guaranteed Obligations to any other or further
action in any circumstances without notice or demand.
6. This is a guarantee of payment and not of collection, and
the liability of Guarantors under this Guarantee shall be primary, direct and
immediate, and not conditional or contingent upon pursuit by the Banks of any
remedies it may have against the Debtor with respect to the Guaranteed
Obligations whether pursuant to the terms thereof or by law, or against any
other person or entity or against any other collateral. Without limiting the
generality of the foregoing, the Banks shall not be required to make any demand
on the Debtor, or to sell at foreclosure or otherwise pursue or exhaust their
remedies against the property securing the Debtor's obligations for the
Guaranteed Obligations or against the Debtor, or against any other person or
entity or against any other collateral whatsoever, before, simultaneously with
or after enforcing their rights and remedies hereunder against the Guarantors.
Any one or more successive or concurrent actions may be brought hereon against
the Guarantors either in the same action, if any, brought against the Debtor or
in separate actions, as often as the Banks may deem advisable.
7. Each Guarantor represents and warrants to the Banks that:
(a) It is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation and has
all corporate power and authority to own all of its properties and to carry on
its business as presently conducted and as contemplated by this Guarantee and
has corporate power and authority to execute and deliver this Guarantee and to
perform its obligations hereunder.
(b) This Guarantee is and will be the legal, valid and binding
obligation of such Guarantor enforceable in accordance with its terms and the
execution, delivery and performance of this Guarantee and such other agreements,
documents and instruments and the performance of the transactions contemplated
hereunder have been and will be duly and validly authorized and
75
approved by the Board of Directors and do not and will not require any consent
or approval of any third party or of the stockholders of such Guarantor other
than consents which have previously been obtained.
(c) The execution and delivery of this Guarantee do not, and
the consummation of the transactions contemplated hereby will not, constitute a
violation of, and are not, and will not be, a default under or conflict with the
terms of the Certificate of Incorporation or By-Laws of such Guarantor, or any
contract, lease, indenture, agreement, order, judgment, or decree to which it is
a party or by which it is bound or to which any of its assets are subject, which
in any case or in the aggregate could have a material adverse effect on its
ability to carry out its obligations under this Guarantee, and do not, and will
not, violate or constitute a default under any statute, rule, regulation, order
or ordinance of any governmental, judicial or arbitral body, which in any case,
or in the aggregate, could have a material adverse effect on its ability to
carry out its obligations under this Guarantee.
(d) Neither the execution, delivery or performance of this
Guarantee, nor the consummation of the transactions contemplated hereby,
requires such Guarantor to obtain any consent, authorization, approval or
registration under any law, rule or regulation, other than as contemplated
hereby or as previously obtained.
(e) There is no suit, action or legal, administrative,
arbitration or other proceeding of any nature pending, or, to the knowledge of
such Guarantor, threatened, against it which might affect the legality or
validity of this Guarantee, or the transactions contemplated hereby, and there
is not any factual basis known to it for any such suit, action or proceeding.
8. This Guarantee shall be binding upon Guarantors and their
respective successors and assigns and shall inure to the benefit of the Banks
and their successors and assigns. This Guarantee may not under any circumstances
be assigned by any Guarantor to any other person or entity without the express
prior written consent of the Banks.
9. Neither this Guarantee nor any provision hereof may be
changed, waived, discharged or terminated except with the written consent of the
Banks.
10. In the event that the Banks shall receive any payments on
account of any of the Guaranteed Obligations, whether directly or indirectly,
and it shall subsequently be determined that such payments were for any reason
improper, or a claim shall be made against the Banks that the same were
improper, and the Banks pursuant to court order shall return the, same, the
Guarantors shall be liable, with the same effect as if the said payment had
never been paid to, or received by the Banks, for the amount of such repaid or
returned payments, notwithstanding the fact that they may theretofore have been
credited on account of the Guaranteed Obligations or any of them. Moreover, this
Guarantee shall remain effective or be reinstated, as the case may be, if at any
time payment or performance, or any part thereof, or any or all of the
Guarantors, obligations under this Guarantee is rescinded or must otherwise be
restored or returned by the Banks, in connection with the insolvency, bankruptcy
or reorganization of the Guarantors, or any of them, or otherwise, all as though
such payment or performance had not been rendered. Notwithstanding any
compromise, release, discharge, settlement, extension or adjustment of the
Debtor's obligations or any amendment, modification or stay of the Banks' rights
against the Debtor that may occur in any bankruptcy or reorganization case or
76
proceeding concerning the Debtor, whether or not assented to by the Banks, the
Guarantors shall remain fully obligated to discharge the Guarantors' obligations
hereunder in accordance with the terms of this Guarantee in effect on the date
hereof. The Guarantors assume all risks of a bankruptcy or reorganization with
respect to the Debtor. In furtherance of this Section, the Banks shall not
otherwise indicate the satisfaction of the obligations of the parties
represented herein until the expiration of all applicable bankruptcy-related
periods of time during which the Debtor, the Guarantors, or any of them, or any
third party would have the right to commence a bankruptcy or reorganization
proceeding with regard to the Debtor or any Guarantor.
11. All notices and other communications provided for under
this Guarantee and under any other document executed in connection herewith
shall be in writing (including telegraphic or telefax communications) and,
unless the party to be notified otherwise notifies the other party in writing as
provided herein, notices shall be given by telecopier, by certified or
registered mail or by recognized overnight delivery service. If such notice is
delivered to the Guarantors, or to any of them, such notice shall be addressed
to the Guarantors c/o United Capital Corp., United Capital Building, 0 Xxxx
Xxxxx, Xxxxx Xxxx, Xxx Xxxx 00000, telecopier (000) 000-0000, Attn: Chief
Financial Officer and, if to the Banks, at their respective addresses listed on
the signature pages of the Credit Agreement; or as to each party, at such other
address as shall be designated by such party in a written notice to the other
parties complying as to delivery with the terms of this Section 10. Notices
shall be effective: (a) if given by registered or certified mail, on the third
day after deposit in the mails with postage prepaid, addressed as aforesaid; (b)
if given by recognized overnight delivery service, on the business day following
deposit with such service, addressed as aforesaid; and (c) if-given by telecopy,
when the telecopy is transmitted to the telecopy number, as aforesaid; provided
that all notices to the Banks shall be effective on receipt.
12. This Guarantee and the rights and obligations of the Banks
and of the undersigned hereunder shall be governed and be construed in
accordance with the laws of the State of New York applicable to agreements made
and to be wholly performed in the State of New York. The Guarantors hereby
irrevocably submit to the jurisdiction of any New York State or United States
Federal Court sitting in New York County over any action or proceeding arising
out of or relating to the Guarantee, and the Guarantors hereby irrevocably agree
that all claims in respect of such action or proceeding may be heard and
determined in such New York State or Federal court. The Guarantors irrevocably
consent to service of any and all process in any such action or proceeding by
the mailing (by registered or certified mail) of copies of such process to it at
its address specified in Section 10. The Guarantors agree that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law. The Guarantors further waive any objection to venue in such State or
Federal court and any objection to an action or proceeding in such State or
Federal court on the basis of forum non conveniens. Nothing in this Section
shall limit the rights of the Banks to serve legal process in any other manner
permitted by law or affect the right of the Banks to bring any action or
proceeding against the Guarantors, or any of them, in the courts of any other
jurisdiction. To the extent that the Guarantors have or hereafter may acquire
immunity from jurisdiction of any court or from any legal process with respect
to itself or its property, the Guarantors hereby waive, to the extent permitted
by applicable law, such immunity in respect of their obligations hereunder.
13. Each of the undersigned Guarantors hereby makes for the
benefit of the Banks each of the representations and warranties applicable to
77
the Guarantors, contained in Article 6 of the Credit Agreement with respect to
itself and each of such representations and warranties as incorporated herein by
reference.
14. THE PARTIES HERETO WAIVE ANY RIGHT TO A TRIAL BY JURY IN
CONNECTION HEREWITH TO THE EXTENT PERMITTED BY APPLICABLE LAW.
IN WITNESS WHEREOF, Guarantor's have caused this Guarantee to
be executed and delivered as of December 31, 1999.
THE GUARANTORS:
140 CORP.
147 CORP.
150 CORP.
1690 LEX CORP.
2911 CORP.
47 BOUNDARY CORP.
000 X. 000 CORP.
627 SECOND CORP.
629 SECOND CORP.
747 MIDDLENECK CORP.
860 FRANKLIN ASSOCIATES INC.
9 PARK PLACE CORP.
95 PERRY CORP.
AFP FINANCIAL CORP.
AFP FINANCIAL LLC
AFP REALTY CORP.
AFP TECHNOLOGIES, INC.
AFP TRANSFORMERS LLC
AFP ONE CORP.
AFP TWO CORP.
AFP THREE CORP.
AFP FOUR CORP.
AFP FIVE CORP.
AFP SIX CORP.
AFP SEVEN CORP.
AFP EIGHT CORP.
AFP NINE CORP.
AFP TEN CORP.
AFP ELEVEN CORP.
AFP TWELVE CORP.
AFP THIRTEEN CORP.
AFP FOURTEEN CORP.
AFP FIFTEEN CORP.
AFP SIXTEEN CORP.
AFP SEVENTEEN CORP.
78
AFP EIGHTEEN CORP.
AFP NINETEEN CORP.
AFP TWENTY CORP.
AFP TWENTY-ONE CORP.
AFP TWENTY-TWO CORP.
AFP TWENTY-THREE CORP.
AFP TWENTY-FOUR CORP.
AFP TWENTY-FIVE CORP.
AFP TWENTY-SIX CORP.
AFP TWENTY-SEVEN CORP.
AFP TWENTY-EIGHT CORP.
AFP TWENTY-NINE CORP.
AFP THIRTY CORP.
AFP THIRTY-ONE CORP.
AFP THIRTY-TWO CORP.
AFP THIRTY-THREE CORP.
AFP THIRTY-FOUR CORP.
AFP THIRTY-FIVE CORP.
AFP THIRTY-SIX CORP.
AFP THIRTY-SEVEN CORP.
AFP THIRTY-EIGHT CORP.
AFP THIRTY-NINE CORP.
AFP FORTY CORP.
AFP FORTY-ONE CORP.
AFP FORTY-TWO CORP.
AKM CORP.
ALBA CORP.
AVALON CORP.
XXXXXXX CORP.
BELMONT CORP.
BKM CORP.
BPI CORP.
BROAD FOX PROPERTIES CORP.
BROAD NORBROOK PROPERTIES
CORP.
BROADWAY CORPORATION
XXXXX REALTY CORP.
C. P. MANUFACTURING
CAMBRELENG CORP.
CAVINU CORP.
CEDAR ENTERPRISES CORP.
CEW PROPERTIES, INC.
CLEETHORPES PROPERTIES, INC.
XXXXXXX-XXXX CORP.
CORTLAND ENTERPRISES CORP.
XXXXXX CORP.
D&M/CHU TECHNOLOGY, INC.
DALLAS ENTERPRISES CORP.
DEL-METEX CORPORATION
79
DIESEL CORPORATION
DUNVEGAN PROPERTIES, INC.
EASTSIDE CORP.
EBMO CORP.
EKM CORP.
ELEVENTH CAVENDISH PROPERTIES, INC.
EROICA CORP.
FERN CORP.
FOURTEENTH CAVENDISH PROPERTIES, INC.
FRANKLIN 850 CORP.
GENH REALTY CORP.
GREENVALE ENTERPRISES CORP.
XXXXXX CORPORATION
HHKM REALTY CORP.
HJA REALTY CORP.
HJB CORP.
HJM CORP.
HJR CORP.
HJSC CORP.
HJSP CORP.
HORIZON CORPORATION
HR-TWENTY CORP.
IVES CORPORATION
JKM CORP.
K-SOUTH CORP.
KENTILE, INC.
KINGS COUNTY CORP.
LAND & LEASES CORP.
LC CORP.
MADISON CORP.
MAXCO INC.
XXXXXXXX CORP.
METEX ENVIROCO CORP.
METEX EUROPE S.A.R.L.
METEX EXPORT CORPORATION
METEX INTERNATIONAL SALES CORPORATION
METEX LIQUIDATION CO. INC.
METEX MFG. CORPORATION
METROMATIC PARTNER, INC.
METROPOLITAN MANAGEMENT SERVICES, INC.
NEMO ACQUISITION CORP.
NORTHBROOK ENTERPRISES CORP.
NORTHWOOD CORP.
PDK CORP.
XXXXXXX PROPERTIES LLC
PINE EQUITIES CORP.
PROSPECT CENTER CORP.
RBS REALTY CORP.
80
XXXXXXXX CORPORATION
SECOND CEW PROPERTIES, INC.
SECOND XXXXXXXX
SHREWBURRYS PROPERTIES, INC.
SUNRISE EQUITIES CORP.
XXXXXX REALTY CORP.
THIRD CEW PROPERTIES, INC.
TOLEDO CORP.
TOWN REALTY CORPORATION
TRI-MART CORP.
TWELFTH CAVENDISH CORP.
TWENTY-M CORP.
TWIN CORPORATION
TWIN II REALTY CORP.
VARIOUS EQUITIES CORP.
WAVERLY CORP.
WELLFORD CORP.
WEST 145 CORP.
EACH OF THE FOREGOING ENTITIES BY:
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Its Duly Authorized
Officer
81
EXHIBIT E
FORM OF
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Security Agreement") is made as
of this 31st day of December, 1999, by and between:
METEX MFG. CORP., a New York corporation, having an office at
000 Xxx Xxxxxx Xxxx, Xxxxxx, Xxx Xxxxxx 00000 (hereinafter referred to as the
"Debtor), and
FLEET BANK, NATIONAL ASSOCIATION, a national banking
association organized under the laws of the United States of America (the
"Agent") as agent for itself and MANUFACTURERS & TRADERS TRUST COMPANY AND BANK
LEUMI USA (the "Secured Parties").
WITNESSETH
WHEREAS, the Secured Parties and UNITED CAPITAL CORP. (the
"Borrower") have entered into a Credit Agreement dated as of December 31, 1999
(as it may hereafter be amended or otherwise modified from time to time, being
the "Agreement") pursuant to which the secured Parties may lend to the Borrower
the aggregate principal amounts set forth therein, upon and subject to the terms
and conditions thereof;
WHEREAS, the Debtor has executed a Guarantee dated the date
hereof (as it may hereafter be amended or otherwise modified from time to time,
the "Guarantee") pursuant to which the Debtor has guaranteed the obligations of
the Borrower to the Secured Parties;
WHEREAS, it is a condition precedent to the obligation of the
Secured Parties to extend credit to the Borrower provided for in the Agreement
that the Debtor shall execute and deliver this Security Agreement; and
WHEREAS, all capitalized terms used herein without definition
shall have the respective meanings ascribed thereto in the Agreement.
NOW, THEREFORE, in consideration of the premises and in order
to induce the Secured Parties to extend credit to the Borrower, the Debtor
agrees with the Agent and the Secured Parties as follows:
1. Security Interest.
(a) Grant of Security. As security for the Obligations (as
defined in Section 1(b) hereof), the Debtor hereby assigns and pledges to the
Agent for the benefit of the Secured Parties, and hereby grants to the Agent for
the benefit of the-Secured Parties a first priority security interest in, all of
the Debtor's right, title and interest, whether now existing or hereafter
arising or acquired, in and to the following (collectively, the "Collateral"):
82
(i) All personal property of the Debtor, whether now or
hereafter existing or now owned or hereafter acquired and wherever located, of
every kind and description, tangible or intangible, including, without
limitation, the balance of every deposit account now or hereafter existing of
the Debtor with the Secured Parties, or either of them, or any of their
affiliates or with any agent of the Secured Parties, or either of them, or any
of their affiliates to the extent such account is maintained by such agent in
its capacity as agent of any kind for the Secured Parties, or any of them, or
any of their affiliates, and all goods, equipment, furniture, inventory
(including, without limitation all raw materials, finished goods and
work-in-process), accounts, contract rights, chattel paper, notes receivable,
instruments, documents (including, without limitation, documents or title,
warehouse receipts and all other shipping documents and instruments of any kind
whatsoever, whether relating to goods in transit or otherwise), general
intangibles, credits, claims, demands and any other obligations of any kind,
whether now or hereafter arising, of the Debtor, and, as to all of the
foregoing, any and all additions and accessions thereto, all substitutions and
replacements therefor and all products and proceeds thereof (including, without
limitation, all proceeds of insurance thereon).
The term "accounts" shall mean, without limiting the
generality of the foregoing, any and all now existing or hereafter arising
rights to payment held by the Debtor, whether in the form of accounts
receivable, notes, drafts, acceptances or other forms of obligations and
receivables now or hereafter received by or belonging to the Debtor for (A)
inventory sold or leased by it, (B) services rendered by it, or (C) advances or
loans made by it to customers, together with all guarantees and security
therefor and all proceeds thereof, whether cash proceeds or otherwise,
including, without limitation, all right, title and interest of the Debtor in
the inventory which gave rise to any such accounts, including, without
limitation, the right to stoppage in transit and all returned, rejected,
rerouted or repossessed inventory.
(ii) All choses in action, any rights arising under any
judgment, statute or rule, all corporate and business records, customer lists,
credit files, computer program print-outs, and other computer materials and
records, all inventories, trademarks, trade styles, trade names, designs,
patents, copyrights, licenses, license agreements, and any applications for
patents and/or trademarks.
(iii) Any and all additions and accessions to the
foregoing Collateral, all substitutions and replacements therefor and all
products and proceeds thereof (including, without limitation, proceeds of
insurance thereon).
(b) Security for Obligations. This Security Agreement secures
the payment of all obligations of Debtor to the Secured Parties now or hereafter
existing under the Guarantee or this Security Agreement, including, in each
case, any modifications or amendments thereto, or otherwise, whether for
principal, interest, fees, expenses or otherwise, together with all costs of
collection or enforcement, including, without limitation, reasonable attorneys'
fees incurred in any collection efforts or in any judicial proceeding
(including, without limitation, bankruptcy or reorganization) (all such
obligations being the "Obligations").
(c) Debtor Remains Liable. Anything herein to the contrary
notwithstanding, (i) the Debtor shall remain liable to perform all of its duties
and obligations under the transactions giving rise to the Collateral to the same
extent as if this Security Agreement had not been executed, (ii) the exercise by
the Secured Parties of any of the rights hereunder shall not release the Debtor
83
from any of its duties or obligations under the transactions giving rise to the
Collateral, which shall remain unchanged as if this Security Agreement had not
been executed, and (iii) neither the Agent nor the Secured Parties shall not
have any obligation or liability under the transactions giving rise to the
Collateral by reason of this Security Agreement, nor shall the Secured Parties
be obligated to perform any of the obligations or duties of the Debtor
thereunder or to take any action to collect or enforce any claim for payment
assigned hereunder.
(d) Continuing Agreement. This Security Agreement shall create
a continuing security interest in the Collateral and shall remain in full force
and effect until payment in full of the Obligations and until the Guarantee
shall no longer be in effect.
2.Debtor's Title; Liens and Encumbrances.
The Debtor represents and warrants that the Debtor is, or to
the extent that this Security Agreement states that the Collateral is to be
acquired after the date hereof, will be, the owner of the Collateral, having
good and marketable title thereto, free from any and all liens, security
interests, encumbrances and claims. The Debtor will not create or assume or
permit to exist any such lien, security interest, encumbrance or claim on or
against the Collateral except as created by this Security Agreement, and the
Debtor will promptly notify the Agent of any such other claim, lien, security
interest or other encumbrance made or asserted against the Collateral and will
defend the Collateral against any such claim, lien, security interest or other
encumbrance.
3. Representations and Warranties;
Location of Collateral and Records;
Business and Trade Names of Debtor.
(a) The Debtor represents and warrants that it has no place of
business, offices where Debtor's books of account and records are kept, or
places where the Collateral is used, stored or located, except as set forth on
Schedule I annexed hereto, and covenants that the Debtor will promptly notify
the Agent of any change in the foregoing representation. The Debtor shall at all
times maintain its records as to the Collateral at its chief place of business
at the address referred to on Schedule I and at none other. The Debtor further
covenants that except for Collateral delivered to the Agent or an agent for the
Agent, the Debtor will not store, use or locate any of the Collateral at any
place other than as listed on Schedule I annexed hereto. To the extent that any
Collateral is located at a location which is not owned by the Debtor, upon the
occurrence and during the continuance of an Event of Default, the Debtor shall
deliver to the Agent landlords waivers in form and substance satisfactory to the
Agent.
(b) The Debtor represents and warrants that it currently uses,
and during the last five years has used, no business or trade names, except as
set forth on Schedule I annexed hereto, and covenants that the Debtor will
promptly notify the Agent, in sufficient detail, of any changes in, additions
to, or deletions from the business or trade names used by the Debtor for billing
purposes.
(c) The Debtor represents and warrants that it has complied
and is in compliance with the provisions of the Fair Labor Standards Act,
including, without limitation, the minimum wage and overtime rules of that Act,
and covenants that the Debtor will continue to comply with the provisions of
such Act.
84
4. Perfection of Security Interest.
Subject to the provisions of Section 17 hereof, the Debtor
will execute all such financing statements pursuant to the Uniform Commercial
Code or other notices appropriate under applicable law as the Agent may require,
each in form satisfactory to the Agent and will pay all filing or recording
costs with respect thereto, and all costs of filing or recording this Security
Agreement or any other instrument, agreement or document executed and delivered
pursuant hereto to the Guarantee or to the Agreement (including the cost of all
federal, state or local mortgage, documentary, stamp or other taxes), in each
case, in all public offices where filing or recording is deemed by the Agent to
be necessary or desirable. The Debtor hereby authorizes the Agent, upon the
occurrence and during the continuance of an Event of Default, to take all action
(including, without limitation, the filing of any Uniform Commercial Code
financing statements or amendments thereto without the signature of the Debtor
or by signing of the Debtor's name to any such financing statements as its
attorney-in-fact,) which the Agent may deem necessary or desirable to perfect or
otherwise protect the liens and security interests created hereunder and to
obtain the benefits of this Security Agreement.
5.General Covenants.
The Debtor shall:
(a) furnish the Agent from time to time at the Agent's request
written statements and schedules further identifying and describing the
Collateral in such detail as the Agent may reasonably require;
(b) advise the Agent promptly, in sufficient detail, of any
substantial change in the Collateral, and of the occurrence of any event which
would have a material adverse effect on the value of the Collateral or on the
Secured Parties' security interest therein;
(c) comply with all acts, rules, regulations and orders of any
legislative, administrative or judicial body or official applicable to the
Collateral or any part thereof or to the operation of the Debtor's business
except where the failure to comply (a) is non-material and (b) has no effect on
the value of the Collateral or on the ability of the Agent or the Secured
Parties to exercise their rights and remedies hereunder;
(d) perform and observe all covenants, restrictions and
conditions contained in the Agreement and applicable to the Borrower providing
for payment of taxes, maintenance of insurance and otherwise relating to the
Collateral, as though such covenants, restrictions and conditions were fully set
forth in this Security Agreement and were applicable to it;
(e) promptly upon the Chief Executive Officer or the Chief
Financial Officer of the Borrower obtaining knowledge thereof, notify the Agent
of any dispute with an account debtor involving amounts in excess of $100,000 or
of any combination of disputes involving amounts aggregating $500,000 or more;
(f) subject to the provisions of Section 17 hereof, promptly
execute and deliver to the Agent such further deeds, mortgages, assignments,
security agreements or other instruments, documents, certificates and assurances
85
and take such further action as the Agent may from time to time in its sole
discretion deem necessary to perfect, protect or enforce the Secured Parties'
security interests in the Collateral or otherwise to effect the intent of this
Security Agreement;
(g) keep or cause to be kept the Collateral in good working
order, repair, running and marketable condition, ordinary wear and tear
excepted, at the Debtor's own cost and expense; and
(h) not assign, sell, mortgage, lease, transfer, pledge, grant
a security interest in or lien upon, encumber or otherwise dispose of or
abandon, any part or all of the Collateral, without the express prior written
consent of the Agent, except (i) for the sale from time to time in the ordinary
course of business of the Debtor of such items of Collateral as may constitute
part of the business inventory of the Debtor; and (ii) as otherwise expressly
provided in the Agreement.
6. Assignment of Insurance.
Upon the occurrence and during the continuance of an Event of
Default, the Debtor shall deliver to each Secured Party copies of, or
certificates of the issuing companies with respect to, endorsements of any and
all policies of insurance owned by the Debtor covering or in any manner relating
to the Collateral, in form and substance satisfactory to the Agent naming the
Secured Parties as additional insured parties as their interests may appear with
respect to liability coverage and naming the Agent, for the benefit of the
Secured Parties, as loss payee with respect to property and extended insurance
coverage, and indicating that no such policy will be terminated, or reduced in
coverage or amount, without at least thirty (30) days prior written notice from
the insurer to the Agent. As further security for the due payment and
performance of the Obligations, the Debtor hereby assigns to the Agent for the
benefit of the Secured Parties all sums, including returned or unearned
premiums, which may become payable under or in respect of any policy of
insurance owned by the Debtor covering or in any manner relating to the
Collateral after the occurrence and during the continuance of an Event of
Default, and the Debtor hereby directs each insurance company issuing any such
policy to make payment of sums directly to the Agent, for the benefit of the
Secured Parties. The Debtor hereby appoints the Agent as the Debtor's
attorney-in-fact and authorizes the Agent in the Debtor's or in the Agent's name
after the occurrence and during the continuance of an Event of Default to
endorse any check or draft representing any such payment and to execute any
proof of claim, subrogation receipt and any other document required by such
insurance company as a condition to or otherwise in connection with such
payment, and, upon the occurrence of any Default or Event of Default, to cancel,
assign or surrender any such policies. All such sums received by the Agent shall
be applied by the Agent to satisfaction of the Obligations or, to the extent
that such sums represent unearned premiums in respect of any policy of insurance
on the Collateral refunded by reason of cancellation, toward payment for similar
insurance protecting the respective interests of the Debtor and the Secured
Parties, or as otherwise required by applicable law.
7. Fixtures.
It is the intent of the Debtor and the Secured Parties that
none of the Collateral is or shall be regarded as fixtures, as that term is used
or defined in Article 9 of the Uniform Commercial Code, and the Debtor
represents and warrants that it has not made and is not bound by any lease or
other agreement which is inconsistent with such intent. Nevertheless, if the
Collateral or any part thereof is or is to become attached or affixed to any
86
real estate, the Debtor will, upon request, furnish the Agent with a disclaimer
or subordination in form satisfactory to the Agent of the holder of any interest
in the real estate to which the Collateral is attached or affixed, together with
the names and addresses of the record owners of, and all other persons having
interest in, and a general description of, such real estate.
8. Collections.
(a) The Debtor may collect all checks, drafts, cash or other
remittances (i) in payment of any of its accounts, contract rights or general
intangibles constituting part of the Collateral, (ii) in payment of any
Collateral sold, transferred, leased or otherwise disposed of, or (iii) in
payment of or on account of its accounts, contracts, contract rights, notes,
drafts, acceptances, general intangibles, choses in action and all other forms
of obligations relating to any of the Collateral so sold, transferred, or leased
or otherwise disposed of, and all of the foregoing amounts so collected after
the occurrence of an Event of Default shall be held in trust by the Debtor for,
and as the property of, the Agent for the benefit of the Secured Parties and
shall not be commingled with other funds, money or property of the Debtor.
(b) Upon the occurrence and continuance of an Event of Default
and upon the written request of the Agent, the Debtor will immediately upon
receipt of all such checks, drafts, cash or other remittances in payment for any
Collateral sold, transferred, leased or otherwise disposed of, or in payment or
on account of its accounts, contracts, contract rights, notes, drafts,
acceptances, general intangibles, choses in action and all other forms of
obligations relating to any of the Collateral so sold, transferred, leased or
otherwise disposed of, deliver any such items to the Agent, for the benefit of
the Secured Parties accompanied by a remittance report in form supplied or
approved by the Agent, such items to be delivered to the Agent in the same form
received, endorsed or otherwise assigned by the Debtor where necessary to permit
collection of such items and, regardless of the form of such endorsement, the
Debtor hereby waives presentment, demand, notice of dishonor, protest, notice of
protest and all other notices with respect hereto.
(c) Upon the written request of the Agent, after the
occurrence and during the continuance of an Event of Default, the Debtor will
promptly notify the Agent in writing of the return or rejection of any goods
represented by any accounts, contract rights or general intangibles and the
Debtor shall forthwith account therefor to the Agent in cash without demand or
notice and, until such payment has been received by the Agent, the Debtor will
receive and hold all such goods separate and apart, in trust for and subject to
the security interest in favor of the Agent, and the Agent is authorized to
sell, for the Debtor's account and at the Debtor's sole risk, all or any part of
such goods.
(d) All of the foregoing remittances shall be applied and
credited by the Agent first to satisfaction of the Obligations or as otherwise
required by applicable law, and to the extent not so credited or applied, shall
be paid over to the Debtor.
9. Rights and Remedies.
In the event of the occurrence and continuance of any Event of
Default the Agent, shall at any time thereafter have the right, with or without
(to the extent permitted by applicable law) notice to the Debtor, as to any or
87
all of the Collateral, by any available judicial procedure or without judicial
process, to take possession of the Collateral and without liability for trespass
to enter any premises where the Collateral may be located for the purpose of
taking possession of or removing the Collateral, and, generally, to exercise any
and all rights afforded to a secured party under the Uniform Commercial Code or
other applicable law. Without limiting the generality of the foregoing, the
Debtor agrees that the Agent, shall have the right to sell, lease, or otherwise
dispose of all or any part of the Collateral, whether in its then condition or
after further preparation or processing, either at public or private sale or at
any broker's board, in lots or in bulk, for cash or for credit, with or without
warranties or representations, and upon such terms and conditions, all as the
Agent in its sole discretion may deem advisable, and the Secured Parties, or
either of them, shall have the right to purchase at any such sale; and, if any
Collateral shall require rebuilding, repairing, maintenance, preparation, or is
in process or other unfinished state, the Agent shall have the right, at its
sole option and discretion, to do such rebuilding, repairing, preparation,
processing or completion of manufacturing, for the purpose of putting the
Collateral in such saleable or disposable form as it shall deem appropriate. At
the Agent's request, the Debtor shall assemble the Collateral and make it
available to the Agent at places which the Agent shall select, whether at the
Debtor's premises or elsewhere, and make available to the Agent, without rent,
all of the Debtor's premises and facilities for the purpose of the Agent's
taking possession of, removing or putting the Collateral in saleable or
disposable form. The proceeds of any such sale, lease or other disposition of
the Collateral shall be applied first to the expenses of retaking, holding,
storing, processing and preparing for sale, selling, and the like, and to the
reasonable attorneys' fees and legal expenses incurred by the Agent, and then to
satisfaction of the Obligations, and to the payment of any other amounts
required by applicable law, after which the Agent shall account to the Debtor
for any surplus proceeds. If, upon the sale, lease or other disposition of the
Collateral, the proceeds thereof are insufficient to pay all amounts to which
the Secured Parties are legally entitled, the Debtor will be liable for the
deficiency, together with interest thereon, at the rate prescribed in the
Agreement, and the reasonable fees of any attorneys employed by the Secured
Parties to collect such deficiency. To the extent permitted by applicable law,
the Debtor waives all claims, damages and demands against the Agent or the
Secured Parties arising out of the repossession, removal, retention or sale of
the Collateral.
10. Costs and Expenses.
Subject to the provisions of the Credit Agreement and of
Section 17 hereof, any and all fees, costs and expenses, of whatever kind or
nature, including the reasonable attorneys' fees and legal expenses incurred by
the Agent or the Secured Parties, or either of them, in connection with the
preparation of this Security Agreement and all other documents relating hereto
and the consummation of this transaction, the filing or recording of financing
statements and other documents (including all taxes in connection therewith) in
public offices, the payment or discharge of any taxes, insurance premiums,
encumbrances or otherwise protecting, maintaining or preserving the Collateral
and the Secured Parties' security interest therein, whether through judicial
proceedings or otherwise, or in defending or prosecuting any actions or
proceedings arising out of or related to the transaction to which this Security
Agreement relates, shall be borne and paid by the Debtor on demand by the Agent
and until so paid shall be added to the principal amount of the Obligations and
shall bear interest at the rate prescribed in the Agreement.
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11. Power of Attorney.
The Debtor authorizes the Agent and does hereby make,
constitute and appoint the Agent, and any officer or agent of the Agent, with
full power of substitution, as the Debtor's true and lawful attorney-in-fact,
with power, in its own name or in the name of the Debtor upon the occurrence and
continuance of an Event of Default: (a) to endorse any notes, checks, drafts,
money orders, or other instruments of payment (including payments payable under
or in respect of any policy of insurance) in respect of the Collateral that may
come into possession of the Agent or the Secured Parties; (b) to sign and
endorse any invoice, freight or express xxxx, xxxx of lading, storage or
warehouse receipts, drafts against debtors, assignments, verifications and
notices in connection with accounts; and other documents relating to Collateral;
(c) to pay or discharge any taxes, liens, security interest or other
encumbrances at any time levied or placed on or threatened against the
Collateral; (d) to demand, collect, receipt for, compromise, settle and xxx for
monies due in respect of the Collateral; (e) to receive, open and dispose of all
mail addressed to the Debtor and to notify the Post Office authorities to change
the address for delivery of mail addressed to the Debtor to such address as the
Agent may designate; and (f) generally to do, at the Agent's option and at the
Debtor's expense, at any time, or from time to time, all acts and things which
the Agent deems necessary to protect, preserve and realize upon the Collateral
and the Secured Parties' security interest therein in order to effect the intent
of this Security Agreement, the Guarantee and the Agreement, all as fully and
effectually as the Debtor might or could do; and the Debtor hereby ratifies all
that said attorney shall lawfully do or cause to be done by virtue hereof. All
acts of said attorney or designee are hereby ratified and approved and said
attorney or designee shall not be liable for any acts of commission or omission,
nor for any error or judgment or mistake of fact or law except for its own gross
negligence or willful misconduct. This power of attorney shall be irrevocable
for the term of this Security Agreement and thereafter as long as any of the
Obligations shall be outstanding.
12. Notices.
Unless the party to be notified otherwise notifies the other
party in writing as provided in this Section, notices shall be given hereunder
by telecopy, by certified or registered mail or by recognized overnight delivery
services to any party at its address on the signature page of this Security
Agreement. Notices shall be effective (a) if given by registered or certified
mail, on the third day after deposit in the mails with postage prepaid,
addressed as aforesaid; (b) if given by recognized overnight delivery service,
on the business day following deposit with such service, addressed as aforesaid;
or (c) if given by telecopy, when the telecopy is transmitted to the telecopy
number as aforesaid; provided that all notices to the Agent or the Secured
Parties shall be effective on receipt.
13. Other Security.
To the extent that the Obligations are now or hereafter
secured by property other than to the Collateral or by the guarantee,
endorsement or property of any other person, then the Agent and the Secured
Parties shall have the right in their sole discretion to pursue, relinquish,
subordinate, modify or take any other action with respect thereto, without in
any way modifying or affecting any of the rights and remedies of the Agent or
the Secured Parties hereunder.
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14. Deposits.
Any and all deposits or other sums at any time credited by or
due from any of the Secured Parties to the Debtor, whether in regular or special
depository accounts or otherwise, shall at all times constitute additional
Collateral for the Obligations, and may upon the occurrence and continuance of
an Event of Default, be set-off by the Secured Parties against any Obligations
at any time, whether or not other collateral held by the Secured Parties is
considered to be adequate.
15. Miscellaneous.
(a) Beyond the safe custody thereof, the Agent shall have no
duty as to the collection of any Collateral in its possession or control or in
the possession or control of any agent or nominee of the Agent, or any income
thereon or as to the preservation of rights against prior parties or any other
rights pertaining thereto.
(b) No course of dealing between the Debtor and the Agent or
the Secured Parties, nor any failure to exercise, nor any delay in exercising,
on the part of the Agent or the Secured Parties, any right, power or privilege
hereunder, under the Guarantee or under the Agreement shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or thereunder preclude any other or further exercise thereof
or the exercise of any other right, power or privilege.
(c) All of the rights and remedies of the Agent and the
Secured Parties with respect to the Collateral, whether established hereby, by
the Guarantee or by the Agreement, or by any other agreements, instruments or
documents or by law, shall be cumulative and may be exercised singly or
concurrently.
(d) The provisions of this Security Agreement are severable,
and if any clause or provision shall be held invalid or unenforceable in whole
or in part in any jurisdiction, then such invalidity or unenforceability shall
affect only such clause or provision, or part thereof, in such jurisdiction and
shall not in any manner affect such clause or provision in any other
jurisdiction, or any other clause or provision of this Security Agreement in any
jurisdiction.
(e) This Security Agreement (including this subsection) is
subject to modification only by a writing signed by all of the parties hereto.
(f) The benefits and burdens of this Security Agreement shall
inure to the benefit of and be binding upon the respective successors and
assigns of the parties hereto; provided, however, that the rights and
obligations of the Debtor under this Security Agreement shall not be assigned or
delegated without the prior written consent of the Secured Parties (exercisable
in its sole discretion), and any purported assignment or delegation without such
consent shall be void.
16. Term of Agreement.
The term of this Security Agreement shall commence on the date
hereof and this Security Agreement shall continue in full force and effect, and
be binding upon the Debtor, until all of the Obligations have been fully paid
and performed and such payment and performance have been acknowledged in writing
by the Secured Parties, whereupon this Security Agreement shall terminate.
17. Special Provision Regarding Perfection of Security
Interests.
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The Agent and the Secured Parties hereby agree that, until an
Event of Default shall have occurred hereunder, the Agent shall not record any
UCC-1 financing statements in any jurisdiction to perfect the security interests
granted hereunder. The parties further agree that upon the happening of an Event
of Default under the Agreement, other than an Event of Default referred to in
Section 10.1(e) thereof (in which case no notice shall be required), the Agent
shall give the Borrower fourteen (14) days prior written notice before recording
any such documents.
WITNESS the execution hereof as of the day and year first
above written.
METEX MFG. CORP., as Debtor
By:___________________________
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
Address for Notices:
000 Xxx Xxxxxx Xxxx
Xxxxxx, Xxx Xxxxxx 00000
Telecopier: (000) 000-0000
FLEET BANK, NATIONAL ASSOCIATION,
as Agent and as Secured Party
By:_____________________________
Name: Xxxxx X. Xxxxxxxxxxx
Title: Vice President
Address for Notices:
Fleet Bank, National Association
0000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxxxxxx, Vice President
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
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MANUFACTURERS & TRADERS TRUST
COMPANY, as Secured Party
By:_________________________
Name: Xxxx Xxxxxxxx
Title: Vice President
Address for Notices:
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
BANK LEUMI USA
By:_________________________
Name: Xxxx Xxxxxxx
Title: Vice President
Address for Notices:
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopier:(000) 000-0000
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SCHEDULE I
TO
SECURITY AGREEMENT
Offices Where Records Are Kept:
-----------------
-----------------
-----------------
Other Locations Where Collateral
Is Stored, Used or Located:
-----------------
-----------------
-----------------
Business and Trade Names
Used by Debtor:
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SCHEDULE A
TO
UCC-1 FINANCING STATEMENT
NAMING METEX MFG. CORP., AS DEBTOR, AND
FLEET BANK NATIONAL ASSOCIATION, AS AGENT FOR ITSELF AND
MANUFACTURERS & TRADERS TRUST COMPANY
AND BANK LEUMI USA, AS SECURED PARTIES
All of the Debtor's right, title and interest, whether now
existing or hereafter arising, in and to the following:
(a) All personal property of the Debtor, whether now or
hereafter existing or now owned or hereafter acquired and wherever located, of
every kind and description, tangible or intangible, including, without
limitation, the balance of every deposit account now or hereafter existing of
the Debtor with the Secured Parties, or either of them, or any of their
affiliates or with any agent of the Secured Parties, or either of them or any of
their affiliates to the extent such account is maintained by such agent in its
capacity as agent of any kind for the Secured Parties, or either of them, or any
of its affiliates and all goods, equipment, furniture, inventory (including,
without limitation, all raw materials, finished goods and work-in-process),
accounts, contract rights, chattel paper, notes receivable, instruments,
documents (including, without limitation, documents of title, warehouse receipts
and all other shipping documents and instruments of any kind whatsoever, whether
relating to goods in transit or otherwise), general intangibles, credits,
claims, demands and any other obligations of any kind, whether now or hereafter
arising, of the Debtor and, as to all the foregoing, any and all additions and
accessions thereto, all substitutions and replacements therefor and all products
and proceeds thereof (including, without limitation, proceeds of insurance
thereon).
The term "accounts" shall mean, without limiting the
generality of the foregoing, any and all now existing or hereafter arising
rights to payment held by the Debtor, whether in the form of accounts
receivable, notes, drafts, acceptances or other forms of obligations and
receivables now or hereafter received by or belonging to the Debtor for (A)
inventory sold or leased by it, (B) services rendered by it, or (C) advances or
loans made by it to customers, together with all guarantees and security
therefor and all proceeds thereof, whether cash proceeds or otherwise,
including, without limitation, all right, title and interest of the Debtor in
the inventory which gave rise to any such accounts, including, without
limitation, the right to stoppage in transit and all returned, rejected,
rerouted or repossessed inventory.
(b) All choses in action, any rights arising under any
judgment, statute or rule, all corporate and business records, customer lists,
credit files, computer program print-outs, and other computer materials and
records, all inventories, trademarks, trade styles, trade names, designs,
patents, copyrights, licenses, license agreements and any applications for
patents and/or trademarks.
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(c) Any and all additions and accessions to the foregoing
Collateral, all substitutions and replacements therefor and all products and
proceeds thereof (including, without limitation, proceeds of insurance thereon).
(d) All sums, including returned or unearned premiums, which
may become payable under or in respect of any policy of insurance owned by the
Debtor covering or in any manner relating to the Collateral.
(e) Any and all deposits or other sums at any time credited by
or due from any of the Secured Parties to the Debtor whether in regular or
special depository accounts or otherwise.
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EXHIBIT E
FORM OF
OPINION OF COUNSEL
Fleet Bank, National Association
000 Xxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000-0000
Manufacturers & Traders Trust Company
_______________________________
_______________________________
Bank Leumi USA
_____________________________
_____________________________
Re: United Capital Corp.
Ladies and Gentlemen:
We have acted as counsel to United Capital Corp., a Delaware
corporation ("United Capital") and certain of its subsidiaries listed on
Schedule "A" hereto (the "Scheduled Subsidiaries"; collectively with United
Capital, the "Obligors") in connection with the execution and delivery by United
Capital of a Credit Agreement dated the date hereof (the "Credit Agreement") and
executed by and between United Capital, as borrower, Fleet Bank, National
Association, Manufacturers & Traders Trust Company, and Bank Leumi USA, as banks
(the "Banks"); and Fleet Bank, National Association, as Agent. Capitalized terms
used herein and not defined herein shall have the meaning given to them in the
Credit Agreement.
We have examined the Credit Agreement and all documents
executed in connection therewith (collectively, the "Facility Documents") and
have examined the originals, or copies certified or otherwise identified to our
satisfaction, of the by-laws and the certificate of incorporation of the
Obligors and such other documents, corporate records, certificates and
instruments as in our judgment are necessary or appropriate to enable us to
render the opinion hereinafter expressed. In such examination we have assumed
the genuineness of all signatures, the authenticity of all documents submitted
to us as originals, the conformity to originals of all documents submitted to us
as certified copies or photocopies and the authenticity of the originals of such
latter documents.
As to all questions of fact material to the opinions specified
herein that have not been independently established, we have relied upon
certificates or comparable documents of officers and representatives of the
Obligors and upon the representations and warranties of the Obligors contained
in the Facility Documents.
96
Many of the Facility Documents provides that they are to be
governed by and construed in accordance with the laws (in some cases, without
regard to the conflicts of laws provisions) of the State of New York. For the
purposes of this opinion we are assuming, but express no opinion as to such
assumption, that any court or other tribunal outside of the State of New York
which may interpret the Facility Documents would give effect to the choice of
law clause.
With your permission, we have not examined title or any
leases, mortgages or other documents governing real estate in which you are to
receive a collateral interest pursuant to the Assignments, and accordingly,
express no opinion on whether the execution of the Assignments by the Guarantors
conflicts with, results in a breach, or creates a default under the terms of any
documents to which the Guarantors may be parties or their properties may be
subject, and on whether any such could affect the enforceability of any
Assignment.
We express no opinion on whether any of the Obligors is
required to qualify to do business in any jurisdiction other than its
jurisdiction of incorporation or what effect, if any, the failure to qualify
could have on the Obligors.
The opinions set forth in paragraph 4 below, are based solely
on our knowledge and representations of the Company, we have done no independent
investigations as to such matters.
On the basis of the preceding and subject to the
qualifications and assumptions set forth herein, we are of the opinion that:
1. Each Obligor is a corporation duly organized, validly
existing and in good standing under the laws of the state of its incorporation,
has all requisite corporate power and authority to own its property and assets
and to transact the business in which it is engaged.
2. Each Obligor has full corporate power and authority to
enter into and perform the Credit Agreement and the Facility Documents to which
it is a party, all of which have been duly authorized by all necessary and
proper corporate action. No consent or approval (including, without limitation,
by shareholders of any Obligor) is required as a condition to the validity or
enforceability of the Credit Agreement and the Facility Documents except for any
consents and approvals heretofore delivered to you.
3. The Credit Agreement and the Facility Documents have been
duly executed and delivered and constitute the valid and legally binding
obligations of the Obligors party thereto, enforceable in accordance with its
respective term. The foregoing is subject to (i) applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium and similar laws
affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity); (ii) the application
or effect of judicial decisions invoking statutes or principles of equity,
including decisions which have held that certain covenants and other provisions
of agreements, including, without limitation, those providing for the
acceleration of indebtedness upon the occurrence of events therein described,
are unenforceable in circumstances where it cannot be demonstrated that the
enforcement of such provisions is reasonably necessary for the protection of the
lenders; (iii) limitations upon the enforcement of terms or conditions of the
Facility Documents which may be construed and held by a court to be in the
nature of penalties or forfeitures; and (iv) Lenders acting in good faith and in
a commercially reasonable manner.
97
4. Except as may be disclosed in Schedules to the Credit
Agreement, we are aware of no actions, suits, investigations or administrative
proceedings of or before any court, arbitrator or governmental authority,
pending or threatened against any Obligor or any of their respective properties
or assets which (i) either in any case or in the aggregate, if adversely
determined, would materially, adversely affect the business, operations or
condition, financial or otherwise, of the Obligors, taken as a whole; or (ii)
question the validity of the Agreement and the Facility Documents or any action
to be taken in connection with the transactions contemplated thereby.
5. The execution, delivery and performance by the Obligors of
the Credit Agreement and the Facility Documents do not and will not (i) violate
any provision of the corporate charter or by-laws of any Obligor; (ii) violate
any order, decree or judgment, or any provisions of any statute, rule or
regulation, domestic or foreign (including, without limitation, Regulations U
and X of the Board of Governors of the Federal Reserve System); (iii) violate or
conflict with, result in a breach of or constitute (with notice or lapse of
time, of both) a default under any shareholder agreement, stock preference
agreement, mortgage, indenture or contract to which any Obligor is a party, and
of which we have knowledge, or (iv) result in the creation or imposition of any
lien, charge or encumbrance of any nature whatsoever upon any property or assets
of any Obligor except as contemplated by the Credit Agreement and the Facility
Documents.
The opinions expressed herein are limited to the laws of the
State of New York, the corporate laws of Delaware and Nevada (the other states
of incorporation of the Obligors) and any applicable federal laws of the United
States of America. We express no opinion herein with respect to the laws of any
other jurisdiction.
This opinion is rendered solely for your benefit in connection
with the transaction described above. This opinion may not be used or relied
upon by any other person and may not be- disclosed, quoted, filed with a
governmental agency or otherwise referred to without our prior written consent,
and as otherwise required by any Governmental Authority or pursuant to legal
process, except that copies of this opinion (i) may be furnished to and relied
upon by assignees or any of the Lenders, successors to any of the Agent or the
Lenders and by counsel to the Lender and (ii) may be furnished to participants
of the Lenders. We expressly disclaim any duty to update this letter in the
future in the event there are any changes in relevant fact or law that may
affect any of our opinions expressed herein.
Very truly yours,
cc: Xx. X. X. Xxxxxxxxxx
98
