EXHIBIT 10.50
AMENDED AND RESTATED
CREDIT AGREEMENT
AMONG
G REIT, L.P., a Virginia limited partnership,
THE LENDERS NAMED HEREIN
AND
LASALLE BANK NATIONAL ASSOCIATION, as Agent for the Lenders
Dated as of July 17, 2003
Table of Contents
Page
----
ARTICLE I. DEFINITIONS; CONSTRUCTION.............................. 1
Section 1.1. Definitions............................................ 1
Section 1.2. Accounting Terms and Determinations.................... 13
Section 1.3. Other Definitional Terms............................... 13
ARTICLE II. AMOUNTS AND TERMS...................................... 14
Section 2.1. Commitment............................................. 14
Section 2.2. Advances............................................... 14
Section 2.3. Notices of Borrowing................................... 14
Section 2.4. Disbursement of Funds.................................. 15
Section 2.5. Promissory Notes; Collateral........................... 15
Section 2.6. Interest on Advances................................... 15
Section 2.7. Eurodollar Rate........................................ 16
Section 2.8. Prepayments of Advances................................ 17
Section 2.9. Maturity Date.......................................... 17
Section 2.10. Payments, Etc.......................................... 17
Section 2.11. Interest Rate Not Ascertainable, Etc................... 18
Section 2.12. Illegality............................................. 18
Section 2.13. Increased Costs........................................ 19
Section 2.14. Change of Lending...................................... 20
Section 2.15. Funding Losses......................................... 20
Section 2.16. Taxes.................................................. 20
Section 2.17. Letters of Credit...................................... 21
Section 2.18. Letter of Credit Usage Absolute........................ 24
Section 2.19. Fees................................................... 25
i
Table of Contents
(continued)
Page
----
ARTICLE III. CONDITIONS TO BORROWINGS............................... 26
Section 3.1. Conditions Precedent to Closing and Subsequent
Advances............................................... 26
Section 3.2. Additional Conditions.................................. 32
Section 3.3. Closing Procedures..................................... 33
ARTICLE IV. REPRESENTATIONS AND WARRANTIES......................... 33
Section 4.1. Good Standing.......................................... 33
Section 4.2. Authorization of Agreement; No Violation............... 34
Section 4.3. Governmental Approvals................................. 34
Section 4.4. Binding Effect......................................... 34
Section 4.5. Financial Information and No Material Adverse Change... 34
Section 4.6. Litigation............................................. 34
Section 4.7. Compliance with Law.................................... 34
Section 4.8. Employees.............................................. 35
Section 4.9. ERISA.................................................. 35
Section 4.10. No Default............................................. 35
Section 4.11. Improvements........................................... 35
Section 4.12. Intellectual Property.................................. 35
Section 4.13. No Burdensome Restrictions............................. 36
Section 4.14. Taxes.................................................. 36
Section 4.15. Investment Company Act; Other Regulations.............. 36
Section 4.16. Insurance.............................................. 36
Section 4.17. Mortgaged Properties................................... 37
Section 4.18. Full and Accurate Disclosure........................... 39
ii
Table of Contents
(continued)
Page
----
Section 4.19. Solvency............................................... 39
Section 4.20. Not Foreign Person..................................... 39
Section 4.21. Assessments............................................ 39
Section 4.22. Flood Zone............................................. 39
Section 4.23. Physical Condition..................................... 39
Section 4.24. Operation of Properties................................ 39
Section 4.25. Margin................................................. 39
Section 4.26. Hazardous Materials.................................... 40
Section 4.27. Brokerage.............................................. 40
Section 4.28. Representations and Warranties in the Loan Documents... 40
Section 4.29. Loan Documents......................................... 40
Section 4.30. Utilities.............................................. 41
Section 4.31. Labor and Materials.................................... 41
Section 4.32. Usury.................................................. 41
Section 4.33. Leases................................................. 41
Section 4.34. Commercial Purposes.................................... 41
Section 4.35. Exempt Transaction..................................... 41
Section 4.36. Reportable Transaction................................. 41
ARTICLE V. COVENANTS.............................................. 41
Section 5.1. Certain Affirmative Covenants.......................... 41
Section 5.2. Reporting Covenants.................................... 45
Section 5.3. Negative Covenants..................................... 47
Section 5.4. Casualty............................................... 50
iii
Table of Contents
(continued)
Page
----
ARTICLE VI. EVENTS OF DEFAULT...................................... 51
Section 6.1. Events of Default...................................... 51
Section 6.2. Global Remedies........................................ 52
Section 6.3. Marshaling; Waiver of Certain Rights; Recapture........ 53
Section 6.4. Application of Proceeds................................ 53
Section 6.5. Attorneys-in-Fact...................................... 54
Section 6.6. Actions in Respect of Letters of Credit................ 54
ARTICLE VII. AGENCY AND INTERCREDITOR............................... 56
Section 7.1. Appointment............................................ 56
Section 7.2. Delegation of Duties................................... 56
Section 7.3. Exculpatory Provisions................................. 57
Section 7.4. Reliance by Agent...................................... 57
Section 7.5. Notice of Default and Other Notices From Borrower...... 57
Section 7.6. Non-Reliance on Agent and the Other Lenders............ 58
Section 7.7. Indemnification........................................ 58
Section 7.8. Agent in Its Individual Capacity....................... 59
Section 7.9. Agent's Resignation or Removal......................... 59
Section 7.10. Appointment of a Substitute Agent...................... 59
Section 7.11. Loans.................................................. 59
Section 7.12. Priority of Loans...................................... 60
Section 7.13. Books and Records...................................... 60
Section 7.14. Decisions of the Lenders............................... 60
Section 7.15. Unanimous Approvals by the Lenders..................... 61
iv
Table of Contents
(continued)
Page
----
Section 7.16. Approvals by the Required Lenders...................... 61
Section 7.17. Management of Acquired Collateral...................... 62
ARTICLE VIII. MISCELLANEOUS.......................................... 63
Section 8.1. Notices................................................ 63
Section 8.2. Amendments, Etc........................................ 64
Section 8.3. No Waiver; Remedies Cumulative......................... 64
Section 8.4. Payment of Expenses, Etc............................... 64
Section 8.5. Right of Setoff........................................ 65
Section 8.6. Benefit of Agreement................................... 65
Section 8.7. Governing Law; Submission to Jurisdiction.............. 65
Section 8.8. Counterparts........................................... 66
Section 8.9. Headings Descriptive................................... 66
Section 8.10. Entire Agreement....................................... 66
Section 8.11. Further Assurances..................................... 66
Section 8.12. Participation.......................................... 66
Section 8.13. Assignments............................................ 67
Section 8.14. Withholding............................................ 68
Section 8.15. Amounts Received by the Lenders........................ 68
Section 8.16. No Joint Venture....................................... 68
Section 8.17. Acknowledgment by Parties Hereto....................... 68
Section 8.18. Right of the Lenders and Agent to Transact Business.... 68
Section 8.19. Sharing of Payments.................................... 68
Section 8.20. Limitation of Liability................................ 69
v
Table of Contents
(continued)
Page
----
Section 8.21. Reliance by Borrower................................... 69
Section 8.22. Time of the Essence.................................... 69
Section 8.23. Indemnity.............................................. 69
Section 8.24. Knowledge.............................................. 69
Section 8.25. Transitional Arrangements.............................. 69
Section 8.26. Replacement Documents.................................. 70
ARTICLE IX. RELEASE OF LIENS....................................... 70
Section 9.1. Release................................................ 70
ARTICLE X. PATRIOT ACT PROVISIONS................................. 71
Section 10.1. Patriot Rules.......................................... 71
vi
AMENDED AND RESTATED
CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT (this "AGREEMENT") is dated as of
July 17, 2003, by and among G REIT, L.P., a Virginia limited partnership, having
an address at 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 000, Xxxxx Xxx, Xxxxxxxxxx 00000
("BORROWER"), the lenders listed on Exhibit A attached hereto, as amended from
time to time (each a "LENDER" and collectively, the "LENDERS") and LASALLE BANK
NATIONAL ASSOCIATION, a national banking association, having an address at 000
Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, as agent for the Lenders (the
"AGENT").
WITNESSETH:
WHEREAS, pursuant to that certain Credit Agreement dated as of January 31,
2003, by and among Borrower, the Lenders and Agent, as amended by that certain
First Amendment to Credit Agreement dated as of April 28, 2003 (as so amended,
the "ORIGINAL AGREEMENT"), the Agent has agreed to underwrite and arrange a
credit facility in the amount of up to $40,000,000 on behalf of Borrower;
WHEREAS, Borrower, the Lenders and Agent have agreed to amend and restate
the Original Agreement in its entirety and, subject to the terms and conditions
of this Agreement, increase the amount of the credit facility to $65,000,000.00;
WHEREAS, Borrower's obligations under the Agreement will be secured by a
lien on the Collateral; and
WHEREAS, in consideration of the representations, warranties, covenants
and agreements of Borrower set forth herein and in the Loan Documents, the
Lenders are willing to establish the credit facility upon the terms and
conditions set forth herein.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS; CONSTRUCTION
SECTION 1.1. DEFINITIONS. As used herein, the following terms shall have the
following meanings:
"ACQUISITION COSTS" means the purchase price paid by an Executing
Subsidiary with respect to each Mortgaged Property, plus reasonable and
customary closing costs paid to third parties up to an aggregate of three
percent (3%) of the purchase price, in addition to a three percent (3%)
acquisition fee payable to Advisor, all approved by Agent (which approval shall
not be unreasonably withheld, conditioned or delayed).
"ACTUAL DEBT SERVICE COVERAGE RATIO" means, with respect to all Mortgaged
Properties, the ratio of Net Operating Income to Debt Service allocable to
Advances made for Permitted
Purposes with respect to the Mortgaged Properties computed on the basis of a
twenty-five (25) year amortization schedule and a rate of interest equal to the
actual rate of interest charged for all Advances then outstanding plus scheduled
principal payments.
"ADDITIONAL PROPERTY" means any property which Borrower desires to add to
the Collateral Pool and with respect to which has submitted to Agent a FIRREA
Appraisal and all other documentation and information requested by Agent.
"ADJUSTED EURODOLLAR RATE" means, with respect to each Eurodollar Rate
Interest Period, the rate obtained by dividing (i) the Eurodollar Rate for such
Eurodollar Rate Interest Period by (ii) a percentage equal to one (1) minus the
stated maximum rate (stated as a decimal) of all reserves required to be
maintained against "eurocurrency liabilities" as specified in Regulation D (or
against any other category of liabilities that includes deposits by reference to
which the interest rate on Eurodollar Advances is determined or any category of
extensions of credit for other assets that includes loans by a non-United States
office of the Agent to United States residents) or by any other Requirement of
Law relating to reserve or capital adequacy requirements.
"ADVANCE" has the meaning provided in Section 2.1(a).
"ADVISOR" means Triple Net Properties, LLC, a Virginia limited liability
company.
"AFFILIATE" means, with respect to any Person, any other Person directly
or indirectly controlling, controlled by, or under common control with such
Person, whether through the ownership of voting securities, by contract, or
otherwise. A Person shall be deemed to control a corporation, limited
partnership or limited liability company if such Person possesses, directly or
indirectly, (i) fifty percent (50%) or more of the beneficial interests in such
corporation, limited partnership or limited liability company or (ii) the power
to direct or cause the direction of the management and policies of such
corporation, through the ownership of voting securities, partnership or
membership interests or by contract or otherwise.
"AGENT" means LaSalle Bank National Association, in its capacity as agent
for the Lenders hereunder, or such successor Agent as may be appointed pursuant
to Section 7.10 of this Agreement.
"AGGREGATE ADVANCES" has the meaning provided in this Section 1.1,
"Maximum Availability Amount".
"AGREEMENT" means this Agreement, as amended, supplemented, or modified
from time to time.
"APPLICABLE BASE RATE" means the Prime Rate.
"APPLICABLE EURODOLLAR RATE" means the Adjusted Eurodollar Rate plus the
applicable Eurodollar Spread.
"APPLICABLE RATE" has the meaning provided in Section 2.6.
2
"APPRAISED VALUE" means, with respect to any Mortgaged Property, the
"as-is" value of such Mortgaged Property determined by a FIRREA Appraisal.
"ASSIGNMENT AND SUBORDINATION OF ADVISORY AGREEMENT" means that certain
Assignment and Subordination of Advisory Agreement, substantially in the form
attached hereto as Exhibit D, executed by Borrower and Advisor in favor of
Agent, as the same may be amended, modified or otherwise supplemented from time
to time.
"ASSIGNMENT AND SUBORDINATION OF MANAGEMENT AGREEMENT" means each
Assignment and Subordination of Management Agreement, substantially in the form
attached hereto as Exhibit E, executed by an Executing Subsidiary and Property
Manager in favor of Agent, with respect to a Mortgaged Property, as the same may
be amended, modified or otherwise supplemented from time to time.
"ASSIGNMENT OF LEASES AND RENTS" means each Assignment of Leases and
Rents, substantially in the form attached hereto as Exhibit F attached hereto,
executed by an Executing Subsidiary, as assignor, in favor of Agent, as
assignee, for each Mortgaged Property, as the same may be amended, modified or
otherwise supplemented from time to time.
"AUTHORIZED REPRESENTATIVE" means the President and Chief Executive
Officer, Chief Financial Officer or Chief Operating Officer of General Partner.
"BANKRUPTCY CODE" has the meaning provided in Section 6.1(g).
"BASE RATE ELECTION" has the meaning provided in Section 2.6(b).
"BORROWER" has the meaning set forth in the introductory paragraph to this
Agreement.
"BORROWING BASE LOAN AMOUNT" has the meaning provided in Section 3.2(d).
"BUSINESS DAY" means any day excluding Saturday, Sunday, and any other day
on which banks are required or authorized to close in Chicago or on which
trading is not carried on by and between banks in Dollar deposits in the
applicable interbank Eurodollar market.
"CLOSING DATE" means the date of the this Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor code thereto.
"COLLATERAL ASSIGNMENT OF INTEREST RATE AGREEMENT" means that certain
Collateral Assignment of Interest Rate Protection Agreement, substantially in
the form attached hereto as Exhibit G, executed by Borrower in favor of Agent,
as the same may be amended, modified or otherwise supplemented from time to
time.
"COLLATERAL POOL" means, collectively, the Mortgaged Properties and the
proceeds thereof, and all other property and interests in property now owned or
hereafter acquired by an Executing Subsidiary (expressly excluding all other
entities) and upon which a Lien has been or is purported or intended to have
been granted in favor of the Agent.
3
"COMMITMENT" has the meaning provided in Section 2.1(b).
"COMMITMENT FEE" has the meaning provided in Section 2.19(a).
"COMPLIANCE CERTIFICATE" has the meaning provided in Section 5.2(e).
"CONTRACTUAL OBLIGATION" means as to any Person, any material provision of
any security issued by such Person or of any agreement, instrument, or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"CREDIT EXPOSURE" has the meaning provided in Section 8.12.
"DEBT SERVICE" means for any period the sum of (i) all interest
obligations accrued on all Indebtedness of Borrower and its Subsidiaries, (ii)
all payments of principal required to be made with respect to any Indebtedness
of Borrower and its Subsidiaries during such period, and (iii) all other
payments required to be made in respect of any Indebtedness of Borrower and its
Subsidiaries.
"DECISIONS" has the meaning provided in Section 7.14.
"DEFAULT" means any condition or event that, with the giving of notice or
the lapse of time or both, would constitute an "Event of Default" hereunder or
under the Promissory Notes or the other Loan Documents.
"DEFAULT RATE" means the Base Rate plus four percent (4%), regardless of
whether a Eurodollar Rate Election would otherwise then be in effect, and
regardless of whether the Rate Reduction Conditions had theretofore been
satisfied.
"DEPOSITORY ACCOUNTS" means any operating account set up and maintained by
Borrower or an Executing Subsidiary with Agent.
"DOLLAR" and the sign "$" each mean lawful currency of the United States
of America.
"ENVIRONMENT" means soil, surface waters, groundwaters, land, stream,
sediments, surface or subsurface strata and ambient air.
"ENVIRONMENTAL DISCHARGE" means any discharge of pollutants or effluent
into any aquifer or water source or system (whether naturally occurring or man
made), gaseous emissions (including, without limitation, air emissions),
particulate emissions and noise emissions, in each case, in violation of any
Relevant Environmental Law.
"ENVIRONMENTAL INDEMNITY" means that certain Environmental Indemnity,
substantially in the form attached hereto as Exhibit H, to be executed by
Borrower and Guarantors in favor of the Agent, as the same may be amended,
modified or otherwise supplemented from time to time.
"EQUITY REQUIREMENT" has the meaning provided in Section 3.2.
4
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA AFFILIATE" means each trade or business (whether or not
incorporated) that together with Borrower or a Subsidiary of Borrower would be
deemed to be a "single employer" within the meaning of Section 4001 of ERISA.
"ESTOPPEL" has the meaning provided in Section 3.1(b)(xvi).
"EURODOLLAR RATE" means a rate of interest equal to the per annum rate of
interest at which United States dollar deposits in an amount comparable to the
principal balance of the Eurodollar Rate Election and for a period equal to the
relevant Eurodollar Rate Interest Period are offered in the London Interbank
Eurodollar market at 11:00 a.m. (London time) two Business Days prior to the
commencement of each Eurodollar Rate Interest Period, as displayed in the
Bloomberg Financial Markets system, or other authoritative source selected by
the Agent in its sole discretion, divided by a number determined by subtracting
from 1.00 the maximum reserve percentage for determining reserves to be
maintained by member banks of the Federal Reserve System for Eurodollar
liabilities, such rate to remain fixed for such Eurodollar Rate Interest Period.
The Agent's determination of the Eurodollar Rate shall be conclusive, absent
manifest error.
"EURODOLLAR RATE ELECTION" has the meaning provided in Section 2.6(b).
"EURODOLLAR RATE INTEREST PERIOD" has the meaning provided in Section 2.7.
"EURODOLLAR SPREAD" means two and 50/100 percent (2.50%), provided that,
if Mortgagor satisfies the Rate Reduction Conditions and only during the time
such Rate Reduction Conditions remain satisfied, then "EURODOLLAR SPREAD", when
used to calculate the rate of interest applicable to portions of Advances funded
shall mean two and 25/100 percent (2.25%). At all times when the Rate Reduction
Conditions are not satisfied, the Eurodollar Spread shall be two and 50/100
percent (2.50%).
"EVENT OF DEFAULT" has the meaning provided in Section 6.1.
"EXECUTING SUBSIDIARY" means each Subsidiary of Borrower which delivers a
Mortgage to Agent in accordance with the terms of this Agreement.
"FEDERAL FUNDS RATE" means, for any day of determination, a rate per annum
(rounded upwards, if necessary, to the nearest 1/100th of one percent) equal to
the weighted average of the rates on overnight Federal Funds transacted with
members of the Federal Reserve System arranged by Federal Funds brokers on such
date, as published by the Federal Reserve Bank of Chicago on the Business Day
next succeeding such day, provided that (x) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (y) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate quoted to the
Agent on such day on such transactions as determined by the Agent.
5
"FINANCING STATEMENTS" means UCC Financing Statements made by an Executing
Subsidiary, as debtor, in favor of the Agent, as secured party, covering all
fixtures, equipment and personal property of such Executing Subsidiary at the
applicable Mortgaged Property.
"FIRREA APPRAISAL" means an appraisal obtained by Agent at Borrower's
expense and conforming in all respects with the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, 12 USC 1811, and which such appraisal
shall be obtained with respect to each Mortgaged Property (i) prior to the
making of the first Advance to fund Permitted Purposes with respect to such
Mortgaged Property, in order to determine the Loan to Value Ratio of such
Mortgaged Property and (ii) not more than once in any twelve (12) month period
thereafter.
"FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT" has the meaning provided in
Section 8.13.
"GAAP" means generally accepted accounting principles as in effect at the
time of application applied on a consistent basis.
"GENERAL PARTNER" means G REIT, Inc., a Virginia corporation, the general
partner of Borrower.
"GENERAL PARTNER GUARANTY" means that certain Unconditional Guaranty,
substantially in the form attached hereto as Exhibit I, executed by General
Partner in favor of Agent and the Lenders, as the same may be amended, modified
or otherwise supplemented from time to time.
"GOVERNMENTAL ACTS" has the meaning provided in Section 2.17(g).
"GOVERNMENTAL AUTHORITY" means any nation and any state or other political
subdivision thereof, and any entity exercising executive, legislative, judicial,
regulatory, or administrative functions of or pertaining to government,
including, but not limited to, the Federal Reserve Board, any Federal Reserve
Bank, any other central banking authority, or any agency or subdivision thereof.
"GUARANTEE OBLIGATION" means, as to any Person (the "GUARANTEEING
PERSON"), any obligation of (a) the Guaranteeing Person or (b) another Person
(including, without limitation, any bank under any letter of credit) to induce
the creation of which the Guaranteeing Person has issued a reimbursement,
counterindemnity, or similar obligation, in either case guaranteeing any
Indebtedness, leases, dividends, or other obligations (the "PRIMARY
OBLIGATIONS") of any other third Person (the "PRIMARY OBLIGOR") in any manner,
whether directly or indirectly, including, without limitation, any obligation of
the Guaranteeing Person, whether or not contingent, (i) to purchase any such
primary obligation or any property constituting direct or indirect security
therefor, (ii) to advance or supply funds (x) for the purchase or payment of any
such primary obligation or (y) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities, or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however that the term
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The
6
amount of any Guarantee Obligation of any Guaranteeing Person shall be deemed to
be the lower of (a) an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Guarantee Obligation is made and (b)
the maximum amount for which such Guaranteeing Person may be liable pursuant to
the terms of the instrument embodying such Guarantee Obligation, unless such
primary obligation and the maximum amount for which such Guaranteeing Person may
be liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such Guaranteeing Person's maximum reasonably
anticipated liability in respect thereof as determined by Agent in good faith.
"GUARANTORS" means individually, and collectively, General Partner,
Advisor and Xxxxxxxx.
"GUARANTY" means either or both of the General Partner Guaranty and the
Xxxxxxxx/Advisor Guaranty.
"HAZARDOUS MATERIALS" means any substance in quantities and/or form:
(a) the presence of which requires or shall hereafter require
notification, investigation or remediation under any Relevant Environmental Law;
or
(b) which is or becomes defined as a "hazardous waste", "hazardous
material" or "hazardous substance" or "controlled industrial waste" or
"pollutant" or "contaminant" under any Relevant Environmental Law, including
without limitation, which contains gasoline, diesel fuel or other petroleum
hydrocarbons or volatile organic compounds, or which contains polychlorinated
biphenyls or asbestos or urea formaldehyde foam insulation, or which contains or
emits radioactive particles, waves or material, including radon gas; or
(c) which is toxic, explosive, corrosive, flammable, infectious,
radioactive, carcinogenic, mutagenic or otherwise hazardous and is or becomes
regulated under any Relevant Environmental Law or by any Governmental Authority;
or
(d) pursuant to applicable Relevant Environmental Laws, the presence of
which on the Mortgaged Property causes or threatens to cause a nuisance upon the
Mortgaged Property or adjacent properties; or poses or threatens to pose a
hazard to the Mortgaged Property or to the health or safety of persons or
property on or about the Mortgaged Property, including, without limitation,
mold, mycotoxins and microbial matter (whether naturally occurring or
otherwise).
"IMPUTED DEBT SERVICE COVERAGE RATIO" means, with respect to each
Mortgaged Property, the ratio of Net Operating Income to Debt Service allocable
to Advances made for Permitted Purposes with respect to such Mortgaged Property,
computed on the basis of a twenty-five (25) year amortization schedule and a
rate of interest per annum equal to the greater of (i) the Treasury Rate then in
effect plus two and 75/100 percent (2.75%), (ii) eight percent (8%), and (iii)
the actual rate of interest charged with respect to the Advance for such
Mortgaged Property.
"INDEBTEDNESS" of any Person means as of the date of any determination
thereof:
7
(a) all obligations of such Person which in accordance with GAAP would be
shown on the balance sheet of such Person as a liability (including, without
limitation, obligations for borrowed money and for the deferred purchase price
of property or services, and obligations evidenced by bonds, debentures, notes,
or other similar instruments);
(b) all rental or other obligations under leases required to be
capitalized under GAAP;
(c) all Guarantee Obligations of such Person;
(d) liabilities resulting from all payment obligations of such Person
under any interest rate protection agreement (including, without limitation, any
interest rate swaps, caps, floors, collars and similar agreements) and currency
swaps and similar agreements determined on a consolidated basis for all such
payment obligations; and
(e) indebtedness of others secured by any Lien upon property owned by such
Person, whether or not assumed.
"INDEBTEDNESS" shall expressly exclude indebtedness of Subsidiaries of
Borrower to Borrower.
"INDEMNIFIED LOSS" has the meaning provided in Section 8.23.
"INDEMNIFIED PARTY" has the meaning provided in Section 8.23.
"INTELLECTUAL PROPERTY" has the meaning provided in Section 4.12.
"INTERCREDITOR AGREEMENT" means that certain Intercreditor Agreement,
substantially in the form attached hereto as Exhibit J, executed by Agent and
the applicable subordinate mortgagee with respect to a subordinate mortgage
placed upon any Mortgaged Property by the Executing Subsidiary, as the same may
be amended, modified or otherwise supplemented from time to time.
"INTEREST RATE AGREEMENT" means any interest rate protection agreement
Borrower enters into with respect to the Loan.
"LEASES" means all leases, licenses and other arrangements pursuant to
which any Person has the right or option to occupy or use any portion of any
Mortgaged Property, and shall include all right, title and interest to receive
all rent and other revenue thereunder, and shall include all guaranties of the
obligations of all such Persons.
"LENDER" or "LENDERS" has the meaning set forth in the introductory
paragraph of this Agreement, and any successors and assigns, provided that any
Lender(s) not specified on Exhibit A at the time of execution hereof must meet
the requirements set forth in Section 8.12 below applicable to a Participant or
Section 8.13 as a Purchasing Lender.
"LENDING OFFICE" means, with respect to any of the Lenders, the branch or
branches (or affiliate or affiliates) from which any of such Lender's Advances
are made or maintained and for
8
the account of which all payments of principal of, and interest on, such
Lender's Advances are made, as designated in writing from time to time to the
Agent and Borrower.
"LETTER OF CREDIT" has the meaning provided in Section 2.17(a).
"LETTER OF CREDIT COLLATERAL" has the meaning provided in Section 6.6.
"LETTER OF CREDIT COLLATERAL ACCOUNT" has the meaning provided in Section
6.6.
"LETTER OF CREDIT DOCUMENTS" has the meaning provided in Section 2.18(a).
"LETTER OF CREDIT FEE" has the meaning provided in Section 2.19(c).
"LETTER OF CREDIT USAGE" means at any time, without duplication, the sum
of (i) the aggregate maximum amount available to be drawn under the Letters of
Credit then outstanding, assuming compliance with all requirements referred to
therein, and (ii) the aggregate amount of Borrower's unpaid obligations under
this Agreement in respect of drawings under the Letters of Credit not then
reimbursed by Borrower.
"LIEN" means, with respect to any asset, any mortgage, pledge, security
interest, encumbrance, lien, charge, or deposit arrangement or other arrangement
having the practical effect of the foregoing and shall include the interest of a
vendor or lessor under any conditional sale agreement, capitalized lease, or
other title retention agreement relating to such asset or the filing of any
financing statement under the UCC or comparable law.
"LOAN DOCUMENTS" means, collectively, this Agreement, the Promissory
Notes, the Guaranty, all Assignments of Leases and Rents, all Mortgages, all
Financing Statements, the Environmental Indemnity, the Collateral Assignment of
Interest Rate Agreement, the Interest Rate Agreement, the Assignment and
Subordination of Advisory Agreement, all Assignments and Subordinations of
Management Agreement, the Note Assumptions, the Letter of Credit Documents and
all other documents, certificates, affidavits and other instruments executed and
delivered by Borrower and/or its Affiliates pursuant thereto or in connection
therewith, as each of the same may be amended, modified or otherwise
supplemented from time to time.
"LOAN TO VALUE RATIO" means the ratio of the amount of all outstanding
Aggregate Advances to the aggregate appraised value of the Mortgaged Properties,
to be determined not more frequently than once in any twelve month period, with
reference to FIRREA Appraisals.
"LOSS" has the meaning provided in Section 7.16(c).
"MAJOR ACTION" means any action, suit or proceeding or any governmental
investigation or arbitration which, if adversely determined, could result in
liability to Borrower or an Executing Subsidiary in an amount exceeding
$100,000, unless Borrower's insurance carrier has expressly acknowledged
liability therefor in writing.
9
"MAJOR LEASE" means, with respect to any Mortgaged Property, any Lease for
over the lesser of (x) 5,000 rentable square feet or (y) ten percent (10%) of
the gross leaseable area of such Mortgaged Property.
"MATERIAL ADVERSE CHANGE" means any change, event or circumstance which
could have a material adverse effect on (i) the transactions contemplated by
this Agreement, the Promissory Notes, or any Loan Documents, including, without
limitation, Borrower's, Guarantors' or any of the Executing Subsidiaries'
ability to perform any of their obligations under this Agreement or any of the
other Loan Documents or (ii) the business, condition (financial or otherwise),
prospects or results of operation of Borrower, Guarantors or any of the
Executing Subsidiaries, or any of the Mortgaged Properties, in each case
determined by Agent in its discretion.
"MATURITY DATE" means January 30, 2006.
"MAXIMUM AVAILABILITY AMOUNT" means, as of any date of determination, the
maximum amount of the aggregate of all outstanding and requested Advances and
all outstanding and requested Letters of Credit (collectively, the "AGGREGATE
ADVANCES") which would not cause (x) the Loan to Value Ratio to exceed 0.65 to
1; provided, however, if the Minimum Pool Conditions are not then satisfied, the
Aggregate Advances shall not cause the Loan to Value Ratio to exceed 0.5 to 1,
or (y) the Imputed Debt Service Coverage Ratio for the Mortgaged Properties to
exceed 1.40 to 1; provided, however, if the Minimum Pool Conditions are not then
satisfied, the Aggregate Advances shall not cause the Imputed Debt Service
Coverage Ratio to exceed 1.65 to 1.
"MINIMUM POOL CONDITIONS" means that (i) the Collateral Pool contains at
least three (3) Mortgaged Properties, and (ii) the Maximum Availability Amount
is at least $8,000,000.00,
"MORTGAGED PROPERTIES" means, collectively, all of the properties
constituting a Mortgaged Property.
"MORTGAGED PROPERTY" means any property encumbered from time to time by a
Mortgage.
"MORTGAGE" means those certain Mortgages, Security Agreements, Assignments
of Leases and Rents and Fixture Filings, substantially in the form attached
hereto as of Exhibit L, to be delivered by an Executing Subsidiary in favor of
Agent and covering each of the Mortgaged Properties, as the same may be amended,
modified, or otherwise supplemented from time to time.
"NET OPERATING INCOME" means, (i) the gross revenues derived from (x)
Leases in effect with respect to a Mortgaged Property and (y) other recurrent
items of revenue derived from a Mortgaged Property in the ordinary course of
business, less (ii) all out-of-pocket expenses and costs related to the
ownership, operation, repair, maintenance of such property for such period
(other than interest expense, depreciation and amortization), including the
Property Management Fee and the Replacement Reserve, but excluding the cost of
capital repairs and replacements not covered by the Replacement Reserve. The
"Net Operating Income" of each Mortgaged Property shall be calculated with
reference to the three (3) month period immediately preceding the month in which
the calculation occurs.
10
"NET WORTH" means, with respect to any Person, such Person's total assets
and liabilities determined in accordance with GAAP.
"NOTE ASSUMPTION" means an Assumption of Note in the form attached hereto
as Exhibit M.
"NOTICE OF BORROWING" has the meaning provided in Section 2.3.
"NOTICE OF ISSUANCE" has the meaning provided in Section 2.17(a).
"NOTIFYING LENDER" has the meaning provided in Section 2.12.
"ORIGINAL CLOSING DATE" means the date of the first Advance under the
Original Agreement.
"PARTICIPANT" has the meaning provided in Section 8.12.
"PARTNERSHIP AGREEMENT" means the Agreement of Limited Partnership of
Borrower dated December 18, 2001.
"PAYMENT OFFICE" means the office of the Agent located at 000 Xxxxx
XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000.
"PERCENTAGE" means each Lender's percentage share of the Commitment as set
forth on Exhibit A hereto.
"PERMITTED ENCUMBRANCES" means, with respect to each of the Mortgaged
Properties, all exceptions to title insurance coverage approved by Agent and set
forth in the title insurance policies insuring the Mortgages covering such
Mortgaged Properties as of the date such policies are issued and any subordinate
mortgage pursuant to which Agent has entered into an Intercreditor Agreement
with the subordinate mortgagee.
"PERMITTED PURPOSES" means the payment of Acquisition Costs.
"PERSON" means any individual, partnership, firm, corporation,
association, joint venture, joint stock company, trust, unincorporated
organization or other entity, or any governmental or political subdivision or
agency, department, or instrumentality thereof.
"PLAN" means any multiemployer plan or single employer plan, as defined in
Section 4001 and subject to Title IV of ERISA, which is maintained, or at any
time during the five calendar years preceding the date of this Agreement was
maintained, for employees of Borrower or a Subsidiary of Borrower or an ERISA
Affiliate.
"PRESENCE" means, when used in connection with Hazardous Materials,
treatment, use, storage, handling, repair, encapsulation, disposal,
transportation, spill, discharge and release.
"PRIME RATE" means such rate of interest as is publicly announced by Agent
at its office in Chicago from time to time as its prime rate.
11
"PROMISSORY NOTES" means the promissory notes made by Borrower to each
Lender substantially in the form attached hereto as Exhibit C.
"PROPERTY MANAGEMENT FEE" means the greater of (x) three percent (3%) of
gross rents for a particular Mortgaged Property or (y) the actual management
fees paid by Borrower in connection with a Mortgaged Property.
"PROPERTY MANAGER" means Triple Net Properties Realty, Inc., a California
corporation.
"PURCHASING LENDER" has the meaning provided in Section 8.13.
"RATE REDUCTION CONDITIONS" means (i) no Default shall have occurred under
any of the Loan Documents for which a notice has been given and remains uncured,
(ii) no Event of Default shall have occurred and be continuing, (iii) Borrower
has a minimum Net Worth of $50,000,000, and (iv) Borrower shall be in full
compliance with each of the covenants set forth in Article V below for the
lesser of (x) six (6) consecutive months or (y) the number of months which have
elapsed from the Original Closing Date.
"REGULATION D", "REGULATION T", "REGULATION U" AND "REGULATION X" mean
Regulation D, Regulation T, Regulation U and Regulation X, respectively, of the
Board of Governors of the Federal Reserve System as from time to time in effect
and any successor thereto.
"RELEVANT ENVIRONMENTAL LAWS" means all Requirements of Law and all other
applicable Federal, state and local environmental statutes, regulations, rules,
ordinances, codes, licenses, permits, approvals, plans, authorizations,
guidelines, concessions, franchises, orders and similar items, and rules of
common law (whether now existing or hereafter enacted or promulgated and whether
now contemplated, anticipated or foreseeable or not) of all courts and
Governmental Authorities, and all applicable judicial and administrative and
regulatory decrees, judgments and orders, including common law rulings and
determinations, relating to injury to or the protection of the Environment,
including, without limitation, all requirements pertaining to reporting,
licensing, permitting, investigation, remediation and removal of emissions,
discharges, releases or threatened releases of Hazardous Materials into the
Environment, or relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Materials.
"REPLACEMENT RESERVE" means a reserve of $0.20 per rentable square foot of
a particular Mortgaged Property for capital repairs and replacements.
"REQUIRED LENDERS" means the Lenders holding at least 66-2/3% of the
Commitment.
"REQUIRED TENANTS" has the meaning provided in Section 3.1(b)(xv).
"REQUIREMENT OF LAW" means, as to any Person, the certificate of
incorporation and bylaws, certificate of partnership and partnership agreement
or other organizational or governing documents of such Person, and any law,
treaty, rule, or regulation or determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.
12
"SNDA" has the meaning provided in Section 3.1(b)(xv).
"SPECIFIED COVENANTS" has the meaning provided in Section 6.1(b).
"SUBORDINATE MORTGAGEE" shall mean any Person who enters into an
Intercreditor Agreement with Agent.
"SUBSIDIARY" of any Person means a corporation, partnership, limited
liability company or other entity of which a majority of the outstanding shares
of stock (or beneficial interests) of each class having ordinary voting power is
owned by such Person, by one or more Subsidiaries of such Person, or by such
Person and one or more of its Subsidiaries.
"TAXES" has the meaning provided in Section 2.16.
"XXXXXXXX" means Xxxxxxx X. Xxxxxxxx.
"XXXXXXXX/ADVISOR GUARANTY" means that certain Unconditional Guaranty,
substantially in the form attached hereto as Exhibit N, executed by Xxxxxxxx and
Advisor in favor of Agent, as the same may be amended, modified or otherwise
supplemented from time to time.
"TOTAL ASSETS" means, with respect to Borrower, the total value of
Borrower's assets determined in accordance with GAAP.
"TREASURY RATE" means the weekly average auction rate on U.S. Treasury
bonds with a maturity of ten (10) years, as published in the Federal Reserve
Bulletin and made available each week by the Federal Reserve Board in
Statistical Release H.15(519).
"UCC" means the Uniform Commercial Code as from time to time in effect in
the relevant jurisdiction.
"USE REQUIREMENTS" means any and all building codes or permits,
certificates of occupancy or compliance, restrictions of record, easements,
reciprocal easements or other agreements, subdivision, zoning, wetlands
protection, or land use laws or ordinances and any and all applicable rules or
regulations of any Governmental Authority affecting any part of any Mortgaged
Property.
"UNUSED FACILITY FEE" has the meaning provided in Section 2.19(b).
SECTION 1.2. ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise defined or
specified herein, all accounting terms shall be construed herein, all accounting
determinations hereunder shall be made, all financial statements required to be
delivered hereunder shall be, prepared, and all financial records shall be
maintained in accordance with GAAP.
SECTION 1.3. OTHER DEFINITIONAL TERMS. The words "hereof," "herein," and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement, and Article, Section, schedule, exhibit, and like references are to
this Agreement unless otherwise specified. References to agreements,
13
instruments, documents, statutes, and regulations include all amendments,
supplements, and modifications thereof as may be in effect from time to time.
ARTICLE II.
AMOUNTS AND TERMS
SECTION 2.1. COMMITMENT.
(a) Subject to and upon the terms and conditions herein set forth, each
Lender, severally and not jointly, agrees to (i) make loans (each an "ADVANCE"
and collectively, the "ADVANCES") to Borrower pro rata in accordance with such
Lender's Percentage from time to time on and/or after the Closing Date, and (ii)
issue Letters of Credit to Borrower pro rata in accordance with such Lender's
Percentage from time to time on and/or after the Closing Date in accordance with
the terms and conditions of Sections 2.17, 2.18 and 2.19.
(b) The Advances made pursuant hereto by the Lenders, together with the
Letter of Credit Usage at such time, shall not exceed an aggregate principal
amount outstanding at any one time of the lesser of (i) the aggregate amount the
Lenders have committed to lend to Borrower as set forth on Exhibit A, as the
same may be increased pursuant to the terms and conditions set forth in Section
2.20 (the "COMMITMENT"), and the (ii) the Maximum Availability Amount. There may
not be more than one (1) Advance made on any day. Within the foregoing limits
and subject to the conditions set out in this Agreement, Borrower may borrow
Advances under this Section 2.1 and repay Advances under Section 2.8, but in no
event may Borrower reborrow Advances except as otherwise expressly permitted by
this Agreement.
(c) The aggregate principal amount of each Advance hereunder shall be not
less than $500,000.
SECTION 2.2. ADVANCES.
(a) The Lenders will make Advances for (and only for) the Permitted
Purposes subject to and in accordance with the terms and conditions of this
Agreement, including, without limitation, subject to satisfaction of all
conditions precedent to Advances set forth herein.
(b) The initial Advance of the loan proceeds will be made upon
satisfaction of the conditions set forth in Article III of this Agreement, and
all subsequent Advances shall be made no more frequently than monthly
thereafter. Notwithstanding the foregoing, Borrower may obtain not more than one
(1) additional Advance per month in connection with the closing of the
acquisition of one or more Mortgaged Properties.
SECTION 2.3. NOTICES OF BORROWING.
(a) Whenever Borrower desires to receive an Advance hereunder, it shall
give the Agent at least three (3) Business Days' prior written notice of the
proposed Advance to be made hereunder, such notice to be given prior to 10:00
a.m. (Chicago time) on the date specified. Each such notice (each a "NOTICE OF
BORROWING") shall be in the form of Exhibit B, be irrevocable and shall specify
the principal amount of the Advance to be made and the date
14
(which shall be a Business Day) of the Advance. No Notice of Borrowing shall be
effective unless it is accompanied by evidence satisfactory to Agent that all of
the conditions to an Advance set forth in Article III hereof have been
satisfied.
(b) Without in any way limiting Borrower's obligation to confirm in
writing any telephonic notice received from an Authorized Representative to the
Agent and the Lenders may act without liability upon the basis of telephonic
notice believed by the Agent in good faith to be from Borrower prior to receipt
of written confirmation. In each such case, Borrower hereby waives the right to
dispute Agent's record of the terms of such telephonic Notice of Borrowing,
except to the extent contradicted by Borrower's subsequent written confirmation
received prior to Agent and the Lenders having irrevocably acted in reliance on
the telephonic Notice of Borrowing.
SECTION 2.4. DISBURSEMENT OF FUNDS. Agent shall promptly (but in no event less
than two (2) Business Days prior to the date of the Advance) notify each Lender
of its Percentage of each Advance and the date of such Advance. On the date so
specified, each Lender shall make available to Agent at the Payment Office no
later than 11:00 a.m. (Chicago time) in immediately available funds an amount
equal to such Lender's Percentage of such Advance. No later than 1:00 p.m.
(Chicago time) on the date of each Advance, Agent will make available to
Borrower at the Payment Office the full amount of the Advance.
SECTION 2.5. PROMISSORY NOTES; COLLATERAL.
(a) Borrower's obligation to pay the principal of, and interest on, the
Advances made by each Lender shall be evidenced by one or more Promissory Notes
in the face amount of each such Lender's Percentage of the Commitment, with
blanks as to payee, date and principal amount appropriately completed. The
determination by Agent of the amount of principal outstanding hereunder or under
any Promissory Note shall, except for patent error, be final, conclusive and
binding upon Borrower for all purposes.
(b) Each borrowing, prepayment and reborrowing hereunder shall be recorded
by Agent; provided, however, that no failure to make or any error in making a
recordation of an Advance shall in any way limit, affect or modify the
obligation of Borrower to repay any obligations, or the rights of Agent and the
Lenders to any amounts due under this Agreement, the Loan Documents or the
Promissory Notes.
(c) Except as otherwise set forth in the Loan Documents, each item of
Collateral shall secure the payment and performance of all indebtedness and
obligations of Borrower under this Agreement, including without limitation, any
increased cost under Section 2.13 hereof, and each other Loan Document.
SECTION 2.6. INTEREST ON ADVANCES.
(a) The unpaid principal amount of each Advance shall bear interest at a
rate per annum equal to the Applicable Rate. Notwithstanding the foregoing, in
no event will the Applicable Rate ever be less than four and 15/100 percent
(4.15%) per annum; provided, however, if Mortgagor satisfies the Rate Reduction
Conditions and during such time as the Rate Reduction Conditions remain
satisfied, then in no event will the Applicable Rate ever be less
15
than three and 90/100 percent (3.90%) per annum. The "APPLICABLE RATE" with
respect to each Advance shall be the Applicable Eurodollar Rate, provided that,
if Borrower makes a Base Rate Election, the Applicable Rate shall mean the
Applicable Base Rate. Notwithstanding the foregoing, interest on each Advance
shall accrue from and including the date of such Advance to but excluding the
date of any repayment thereof and shall be payable as follows:
(i) with respect to Advances bearing interest at the Applicable Base
Rate, interest shall be payable (x) in arrears on the first day of each calendar
month at all times while any such Advances are outstanding, (y) at maturity
(whether by acceleration or otherwise), and (z) after maturity, on demand; and
(ii) with respect to Advances bearing interest at the Applicable
Eurodollar Rate, interest shall be payable (x) in arrears on the first day of
each calendar month while any such Advances are outstanding, (y) at maturity and
(z) after maturity (whether by acceleration or otherwise), on demand.
(b) Borrower may elect from time to time to have the Applicable Base Rate
apply to any Advance by giving Agent written notice thereof in a Notice of
Borrowing (a "BASE RATE ELECTION").
(c) If a Default or Event of Default exists hereunder, the Applicable Rate
shall mean the Default Rate. Additionally, overdue principal and, to the extent
permitted by law, overdue interest in respect of each Advance, and all other
overdue amounts owing hereunder, shall bear interest for each day that such
amounts are overdue at a rate per annum equal to the Default Rate.
(d) Agent, upon determining the Applicable Eurodollar Rate for any
applicable Eurodollar Interest Rate Period, shall promptly notify by telephone
(confirmed in writing) or in writing Borrower thereof.
SECTION 2.7. EURODOLLAR RATE. If an Advance bears interest at the Applicable
Eurodollar Rate in accordance with the terms hereof, an interest period (each a
"EURODOLLAR RATE INTEREST PERIOD") shall be applicable thereto, which shall be a
period of up to three (3) months as selected by Borrower in the Notice of
Borrowing for such Advance, provided that:
(a) the initial Eurodollar Rate Interest Period for any Advance shall
commence on the date of such Advance;
(b) at the end of the initial Eurodollar Rate Interest Period, and each
subsequent Eurodollar Rate Interest Period for any Advance, Borrower shall be
permitted to select an additional Eurodollar Rate Interest Period for such
Advance by delivering a written notice thereof to Agent at any time prior to
12:00 Noon (Chicago time) on the third Business Day prior to the expiration of
the then-current Interest Period applicable to such Advance, provided that if no
Eurodollar Rate Interest Period selection is delivered to Agent by such time,
Borrower shall be deemed to have selected the existing Eurodollar Rate Interest
Period for such Advance of one month;
(c) if a Eurodollar Rate Interest Period would otherwise expire on a day
which is not a Business Day, such Eurodollar Rate Interest Period shall expire
on the next succeeding
16
Business Day, provided that if any Eurodollar Rate Interest Period in respect of
an Advance (other than an Advance referred to in Section 2.12(b)(ii) or Section
2.13(b)(ii)) would otherwise expire on a day that is not a Business Day but is a
day of the month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(d) any Eurodollar Rate Interest Period in respect of an Advance which
begins on the last Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (v) below, end on the last Business
Day of a calendar month;
(e) no Eurodollar Rate Interest Period shall extend beyond the Maturity
Date; and
(f) there shall be no more than eight (8) Eurodollar Rate Interest Periods
in effect at any time.
SECTION 2.8. PREPAYMENTS OF ADVANCES.
(a) Borrower may prepay all outstanding Advances, any one Advance or any
portion of an Advance on any Business Day without penalty, premium or additional
charge, except as set forth in Section 2.15 hereof; provided that such
prepayment shall be at least equal to the lesser of $100,000 or the outstanding
amount of such Advance. Upon five (5) days' written notice to Agent, Borrower
may terminate the Commitment by prepaying all outstanding Advances and all other
amounts and fees due to Agent and the Lenders under this Agreement and the other
Loan Documents, including, without limitation, Section 2.15 hereof.
(b) Borrower shall be liable for all amounts payable pursuant to Section
2.15 with respect to a prepayment of an Advance on any date other than the last
day of the Eurodollar Rate Interest Period related to such Advance.
SECTION 2.9. MATURITY DATE. Borrower shall repay to Agent, for the account of
the Lenders, the unpaid principal amount of each Advance made by the Lenders
hereunder, together with all accrued and unpaid interest thereon and any other
sums due and payable to the Lenders hereunder or under the other Loan Documents
on the Maturity Date.
SECTION 2.10. PAYMENTS, ETC.
(a) All payments under this Agreement shall be pro rated among the Lenders
in accordance with their Percentages and, shall be made by Borrower, without
defense, setoff, or counterclaim, to Agent not later than 12:00 noon (Chicago
time) on the date when due and shall be made in Dollars in immediately available
funds at the Payment Office and any funds received by Agent after such time
shall, for all purposes of this Agreement, be deemed to have been paid on the
next succeeding Business Day. Agent shall thereafter cause to be distributed to
the Lenders, on the Business Day when paid, in like funds their Percentage of
payments so received. In the event Agent fails to cause such funds to be
distributed to any Lender on the same Business Day when paid (or deemed paid) to
Agent, Agent shall pay interest to such Lender on such amounts at the Federal
Funds Rate.
17
(b) Whenever any payment to be made hereunder or under the Promissory
Notes shall be stated to be due on a day which is not a Business Day, the due
date thereof shall be extended to the next succeeding Business Day (unless a
Eurodollar Rate Interest Period expires on the next preceding Business Day
pursuant to Section 2.7(c), in which case the due date shall be the next
preceding Business Day) and, with respect to payments of principal, interest
thereon shall be payable at the Applicable Rate during such extension.
(c) All computations of interest on the Advances and fees due under
Sections 2.19(b) and (c) shall be made on the basis of a year of 360 days for
the actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest or fees are payable. Each
determination by Agent of an interest rate or fee hereunder shall, except for
patent error, be final, conclusive, and binding upon Borrower for all purposes.
(d) Prior to the occurrence of an Event of Default, all payments and
prepayments under this Agreement shall be applied as follows: (a) first, to
fees, expenses, costs and other similar amounts then due and payable to Agent
and the Lenders, including, without limitation any prepayment premium, exit fee
or late charges due hereunder, (b) second, to accrued and unpaid interest on the
outstanding Advances, (c) third, to the payment of principal due in the month in
which the payment or prepayment is made, if any, (d) fourth, to any escrows,
impounds or other amounts which may then be due and payable under the Loan
Documents, (e) fifth, to any other amounts then due Agent and/or Lenders
hereunder or under any of the Loan Documents, and (f) last, to the unpaid
principal balance of the outstanding Advances in the inverse order of maturity.
Any prepayment of Advances shall not extend or postpone the Maturity Date or
reduce the amount of any subsequent monthly payment of principal and interest
due hereunder. After an Event of Default has occurred and is continuing,
payments may be applied by Agent to amounts owed hereunder and under the Loan
Documents in such order as Agent shall determine, in its sole discretion.
SECTION 2.11. INTEREST RATE NOT ASCERTAINABLE, ETC. If Agent shall have
determined (which determination shall, except for patent error, be final,
conclusive and binding upon Borrower for all purposes) that on any date for
determining the Applicable Eurodollar Rate for any Eurodollar Rate Interest
Period, by reason of any circumstances affecting the interbank Eurodollar
market, or Agent's position in such market, adequate and fair means do not exist
for ascertaining the applicable interest rate on the basis provided for in the
definition of Applicable Eurodollar Rate, then, and in any such event, Agent
shall forthwith give notice (by telephone confirmed in writing) to Borrower of
such determination. Until Agent notifies Borrower that the circumstances giving
rise to the suspension described herein no longer exist, then (x) any Advance
made hereunder shall bear interest at the Applicable Base Rate then in effect
and (y) if any Advance affected is then outstanding, each such Advance shall
immediately convert into an Advance bearing interest at the Applicable Base Rate
then in effect.
SECTION 2.12. ILLEGALITY.
(a) If any Lender (a "NOTIFYING LENDER") shall have determined at any time
that compliance by such Lender in good faith with any law, rule or regulation,
or any change therein, or any change in the interpretation or administration
thereof by any Governmental Authority adopted or becoming effective after the
date hereof renders unlawful the making or continuance
18
of any Advance, the Notifying Lender shall give prompt notice (by telephone
confirmed in writing) to Agent, and Agent to Borrower of such determination.
(b) Upon the giving of the notice to Agent and Borrower referred to in
Section 2.12(a) above, (i) Borrower's right to request and the Notifying
Lender's obligation to make Advances shall be immediately suspended, and (ii) if
the Notifying Lender's Advance affected is then outstanding, each such Advance
shall immediately convert into an Advance bearing interest at the Applicable
Base Rate, provided that, in such event, Borrower shall not be liable for any
costs referred to in Section 2.15(ii) hereof resulting solely by reason of such
conversion occurring prior to the last day of a Eurodollar Rate Interest Period.
SECTION 2.13. INCREASED COSTS.
(a) If, by reason of (x) after the date hereof, the implementation of or
any change (including, without limitation, any change by way of imposition or
increase of reserve or capital adequacy requirements) in, or in the
interpretation by any Governmental Authority or any other recognized authority
of, any law or regulation, or (y) the compliance with any guideline or request
from any central bank or other Governmental Authority or quasi-Governmental
Authority exercising control over banks or financial institutions generally
(whether or not having the force of law) adopted or becoming effective after the
date hereof:
(i) any Lender (or its Lending Office) shall be subject to any tax,
duty, or other charge, with respect to the Advances or its obligation to make
Advances, or shall change the basis of taxation of payments to any Lender of the
principal of or interest on the Advances or its obligation to make Advances
(except for changes in the rate of tax on the overall net income of such Lender
or its Lending Office imposed by the jurisdiction in which such Lender's
principal executive office or Lending Office is located); or
(ii) any reserve, special deposit, or similar requirement
(including, without limitation, any reserve, special deposit, or similar
requirement imposed by the Board of Governors of the Federal Reserve System)
against assets of, deposits with or for the account of, or credit extended by,
any Lender or its Lending Office shall be imposed or deemed applicable or any
other condition affecting the Advances shall be imposed on such Lender or its
Lending Office or the interbank Eurodollar market;
and as a result thereof there shall be any cost to such Lender of agreeing to
make or maintain the Advances (except to the extent already included in the
determination of the Applicable Eurodollar Rate for the Advances), or there
shall be a reduction in the amount received or receivable by such Lender or its
Lending Office, then Borrower shall from time to time, upon written notice and
demand by Agent, pay to Agent for the account of such Lender, within five (5)
Business Days after the date specified in such notice and demand, additional
amounts sufficient to indemnify such Lender against such increased cost. A
certificate as to the amount of such increased cost and setting forth in
reasonable detail the reason for the adjustment and the calculation thereof,
submitted to Borrower and Agent by such Lender, shall, except for patent error,
be final, conclusive, and binding for all purposes. In the event that a Lender
becomes aware of the imposition of a cost to such Lender or a reduction in the
amount to be received or receivable by such Lender or its Lending Office which
is an additional cost pursuant to this
19
Section 2.13, such Lender shall notify Agent and Borrower in writing of such
imposition or reduction. With respect to costs or reductions incurred by a
Lender pursuant to this Section 2.13 relating to any period in which the
Commitment is in effect, the provisions of this Section 2.13 shall survive the
termination of this Agreement and the payment of the Promissory Notes and all
other amounts payable hereunder.
(b) If the Lenders shall notify Borrower in writing that at any time,
because of the circumstances described in clause (x) or (y) in Section 2.13(a)
or any other circumstances arising after the Closing Date and relating to any
period in which the Commitment is in effect affecting the Lenders or the
interbank Eurodollar market or the Lenders' position in such market, the
Applicable Eurodollar Rate, as determined by Agent, will not adequately and
fairly reflect the cost to the Lenders of funding Advances subject to such rate,
then thereafter:
(i) any Advance made hereunder shall bear interest at the Applicable
Base Rate; and
(ii) if the affected Advance is then outstanding, Borrower shall
immediately, or if permitted by applicable law, no later than the date permitted
thereby, upon at least one (1) Business Day's written notice to the Lenders,
convert each such Advance into an Advance bearing interest at the Applicable
Base Rate, provided that in such event, Borrower shall not be liable for any
costs referred to in Section 2.15(ii) hereof resulting solely by reason of such
conversion occurring prior to the last day of a Eurodollar Rate Interest Period.
SECTION 2.14. CHANGE OF LENDING. Each Lender agrees that it will use reasonable
efforts to designate an alternate Lending Office with respect to its Advances
affected by the matters or circumstances described in Sections 2.11, 2.12 or
2.13 to reduce the liability of Borrower or avoid the results provided
thereunder, so long as such designation is not disadvantageous to such Lender as
determined by such Lender in its sole discretion.
SECTION 2.15. FUNDING LOSSES. Borrower shall compensate each Lender, upon such
Lender's written request to Agent and Agent's delivery thereof to Borrower
(which request shall set forth the basis for requesting such amounts and which
request shall, absent patent error, be final, conclusive, and binding upon
Borrower for all purposes), for all losses, expenses, and liabilities
(including, without limitation, any interest paid by such Lender to lenders of
funds borrowed by it to make or carry its Advances to the extent not recovered
by such Lender in connection with the re-employment of such funds), which such
Lender may sustain: (i) if for any reason (other than a default by such Lender)
an Advance does not occur on the date specified therefor in a Notice of
Borrowing (whether or not withdrawn); (ii) if any repayment of any Advance
occurs on a date which is not the last day of a Eurodollar Rate Interest Period
applicable to such Advance; or (iii) if, for any reason, Borrower defaults in
its obligation to repay any Advances when required by the terms of this
Agreement. With respect to losses, expenses and liabilities which a Lender may
sustain as described in this Section 2.15 relating to any period in which the
Commitment is in effect, the provisions of this Section 2.15 shall survive the
termination of this Agreement and the payment of the Promissory Notes and all
other amounts payable hereunder.
SECTION 2.16. TAXES. All payments made by Borrower under this Agreement and the
Promissory Notes shall be made free and clear of, and without deduction or
withholding for or
20
on account of, any present or future income, stamp, or other taxes, levies,
imposts, duties, charges, fees, deductions, reserves or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding in the case of each Lender, net income taxes and franchise
taxes (imposed in lieu of net income taxes) imposed on such Lender as a result
of a present or former connection between the jurisdiction of the government or
taxing authority imposing such tax and such Lender (excluding a connection
arising solely from such Lender having executed, delivered, or performed its
obligations or received a payment under, or enforced, this Agreement or the
Promissory Notes) or any political subdivision or taxing authority thereof or
therein (all such non-excluded taxes, levies, imposts, duties, charges, fees,
deductions and withholdings being hereinafter called "TAXES"). If any Taxes are
required to be withheld from any amounts payable to any Lender hereunder or
under the Promissory Notes, the amounts so payable to such Lender shall be
increased to the extent necessary to yield to such Lender (after payment of all
Taxes) interest or any such other amounts payable hereunder at the rates or in
the amounts specified in this Agreement and the appropriate Promissory Note.
Whenever any Taxes are payable by Borrower pursuant to applicable law, as
promptly as possible thereafter Borrower shall send to Agent a certified copy of
an original official receipt received by Borrower showing payment thereof. If
any Borrower fails to pay any Taxes when due to the appropriate taxing authority
or fails to remit to Agent the required receipts or other required documentary
evidence, Borrower shall indemnify, defend and hold harmless Agent and each
Lender for any incremental taxes, interest, or penalties that may become payable
by Agent or any Lender as a result of any such failure. With respect to any
obligations of Borrower pursuant to this Section 2.16 relating to any period in
which the Commitment is in effect, the agreements in this Section 2.16, as they
apply to any Advance, shall survive the termination of this Agreement and the
payment of the Promissory Notes and all other amounts payable hereunder.
SECTION 2.17. LETTERS OF CREDIT.
(a) Borrower shall give Agent written notice (a "NOTICE OF ISSUANCE") in
the event that it desires to have any Letters of Credit (each, a "LETTER OF
CREDIT") issued hereunder no later than 1:00 p.m. Chicago time at least three
(3) Business Days prior to the date of such issuance. Each such notice shall
specify (i) the aggregate amount of the requested Letters of Credit, (ii) the
individual amount of each requested Letter of Credit and the number of Letters
of Credit to be issued, (iii) the date of such issuance (which shall be a
Business Day), (iv) the name and address of the beneficiary, (v) the expiration
date(s) of the Letter(s) of Credit (which in no event shall be later than the
Maturity Date), (vi) the purpose and circumstances for which each such Letter of
Credit is being issued, and (vii) the terms upon which each such Letter of
Credit may be drawn down (which terms shall not leave any discretion to Agent).
No later than 1:00 p.m. Chicago time on the date that is three (3) Business Days
prior to the date of issuance, Borrower shall also specify a precise description
of the documents and the verbatim text of any certificate to be presented by the
beneficiary of such Letter of Credit, which if presented by such beneficiary
prior to the expiration date of the Letter of Credit would require Agent, on
behalf of the Lenders, to make a payment under the Letter of Credit; provided
that Agent may, in its reasonable judgment, require changes in any such
documents and certificates in conformity with changes in customary and
commercially reasonable practice or law and provided further, that no Letter of
Credit shall require payment against a conforming draft to be made thereunder on
the following Business Day that such draft is presented if such presentation is
made later than 10:00 a.m
21
Chicago time (except that if the beneficiary of any Letter of Credit requests at
the time of the issuance of its Letter of Credit that payment be made on the
same Business Day against a conforming draft, such beneficiary shall be entitled
to such a same day draw, provided such draft is presented to Lender no later
than 10:00 a.m. Chicago time and provided further that, prior to the issuance of
such Letter of Credit, Borrower shall have requested to Agent that such
beneficiary shall be entitled to a same day draw). In determining whether to pay
on such Letter of Credit, Agent shall be responsible only to determine that the
documents and certificates required to be delivered under the Letter of Credit
have been delivered and that they comply on their faces with the requirements of
the applicable Letter of Credit.
(b) Subject to the terms contained in this Agreement and the other Loan
Documents, upon receipt of a Notice of Issuance in accordance with Section
2.17(a) requesting the issuance of a Letter of Credit, Agent, on behalf of the
Lenders, shall issue a Letter of Credit or Letters of Credit, subject to the
requirements of this Section 2.17, in such form as is customarily used by Agent,
in an amount or amounts equal to the amount or amounts requested by Borrower.
(c) Each Letter of Credit shall be issued in the minimum amount of One
Hundred Thousand Dollars ($100,000).
(d) There shall be no more than five (5) Letters of Credit outstanding at
any one time, and the aggregate Letter of Credit Usage at any time shall not
exceed twenty-five percent (25%) of the then available Commitment; provided,
however, in no event shall any requested Letter of Credit cause the aggregate
principal amount of all Aggregate Advances to exceed the Borrowing Base Loan
Amount.
(e) In the event of any request for a drawing under any Letter of Credit
by the beneficiary thereunder, Agent shall notify Borrower and Lenders on or
before the date on which Agent intends to honor such drawing. On the date
specified for the drawing, each Lender shall make available to Agent such
Lender's Percentage of the amount of the applicable drawing. Except as provided
in this Section 2.17(e), Borrower shall reimburse Agent, on behalf of the
Lenders, in immediately available funds, on the same day on which such drawing
is honored in of the amount of such drawing. Notwithstanding anything in this
Agreement to the contrary, unless (i) Borrower shall have notified Agent prior
to 11:00 a.m. Chicago time on the Business Day immediately prior to the date of
such drawing that Borrower intends to reimburse the Lenders for the amount of
such drawing with funds other than an Advance, or (ii) the Advance in amount of
such drawing would cause the aggregate principal amount of all Aggregate
Advances to exceed the Borrowing Base Loan Amount, Borrower shall be deemed to
have timely given notice to Agent of a Base Rate Election pursuant to Section
2.3 on the date on which such drawing is honored in an amount equal to the
amount of such drawing. In the event Borrower reimburses Agent for the amount of
any such drawing, Agent shall thereafter cause to be distributed to the Lenders,
on the Business Day when paid, in like funds, their Percentage of the payments
so received. In the event Agent fails to cause such funds to be distributed to
any Lender within one (1) Business Day after the Business Day when paid to
Agent, Agent shall pay interest to such Lender on such amounts at the Federal
Funds Rate.
(f) If, after the date hereof, any change in any law or regulation or in
the interpretation thereof by any court or administrative or Governmental
Authority charged with the
22
administration thereof shall either (i) impose, modify or deem applicable any
reserve, special deposit or similar requirement against letters of credit issued
by or assets or deposits held by Lenders or (ii) impose on the Agent or the
Lenders any other condition regarding this Agreement or such Lender as it
pertains to the Letters of Credit and the result of any event referred to in
either clause (i) or (ii) shall be to increase the cost to such Lender of
issuing or maintaining any Letter of Credit, then Borrower shall pay to Agent,
on behalf of the Lenders, within five (5) days after written demand by Agent,
which demand shall be accompanied by a certificate showing, in reasonable
detail, the calculation of such amount or amounts, such additional amounts as
shall be required to compensate the Agent or the Lenders for such increased
costs or reduction in amounts received or receivable hereunder together with
interest thereon at the Base Rate. The amount specified in the written demand
shall, absent manifest error, be final and conclusive and binding upon Borrower.
(g) Borrower hereby agrees to protect, indemnify, pay and save Agent and
each Lender harmless from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable attorneys'
fees and disbursements) which Lenders may incur or be subject to as a result of
(i) the issuance of the Letters of Credit, other than as a result of the gross
negligence or willful misconduct of Agent or such Lender or (ii) the failure of
the Agent or the Lenders to honor a drawing under the Letter of Credit as a
result of any act or omission, whether rightful or wrongful, of any present or
future Governmental Authority (collectively, "GOVERNMENTAL ACTS"), other than as
a result of the gross negligence or willful misconduct of Agent or the Lenders.
As between Borrower, Agent and the Lenders, Borrower assumes all risks of the
acts and omissions of, or misuses of, the Letters of Credit, by the
beneficiaries of such Letters of Credit. In furtherance and not in limitation of
the foregoing, neither Agent nor the Lenders shall not be responsible (i) for
the form, validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for and
issuance of such Letters of Credit, even if it should in fact prove to be in any
and all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii)
for the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) for failure of the beneficiary
of any such Letter of Credit to comply fully with conditions required in order
to draw upon such Letter of Credit; (iv) for errors, omissions, interruptions or
delays in transmission or delivery of any message, by mail, cable, telegraph,
telex, facsimile transmission, or otherwise; (v) for errors in interpretation of
any technical terms; (vi) for any loss or delay in the transmission or otherwise
of any documents required in order to make a drawing under any such Letter of
Credit or of the proceeds thereof; (vii) for the misapplication by the
beneficiary of any such Letter of Credit or the proceeds of such Letter of
Credit; and (viii) for any consequence arising from causes beyond the control of
Agent or the Lenders, including any Governmental Acts, in each case other than
as a result of the gross negligence or willful misconduct of Agent or the
Lenders. None of the above shall affect, impair or prevent the vesting of
Agent's or the Lenders' rights and powers hereunder. In furtherance and
extension and not in limitation of the specific provisions hereinabove set
forth, any action taken or omitted by Agent or the Lenders under or in
connection with the Letters of Credit issued by it or the related certificates,
if taken or omitted in good faith and in the absence of gross negligence or
willful misconduct, shall not put Agent or the Lenders under any resulting
liability to Borrower.
23
(h) Borrower may at any time return any undrawn Letter of Credit to Agent
in whole, but not in part.
SECTION 2.18. LETTER OF CREDIT USAGE ABSOLUTE. The obligations of Borrower under
this Agreement in respect of any Letter of Credit shall be unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement (as the same may be amended from time to time) and any Letter of
Credit Documents (as hereinafter defined) under all circumstances, including,
without limitation, to the extent permitted by law, the following circumstances:
(a) any lack of validity or enforceability of any Letter of Credit or any
other agreement or instrument relating thereto (collectively, the "LETTER OF
CREDIT DOCUMENTS") or any Loan Document;
(b) any change in the time, manner or place of payment of, or in any other
term of, all or any of the obligations of Borrower in respect of the Letters of
Credit or any other amendment or waiver of or any consent by Borrower to
departure from all or any of the Letter of Credit Documents or any Loan
Document, provided that Agent shall not consent to any such change or amendment
unless previously consented to in writing by the Borrower;
(c) any exchange, release or non-perfection of any collateral, or any
release or amendment or waiver of or consent to departure from any guaranty, for
all or any of the obligations of Borrower in respect of the Letters of Credit;
(d) the existence of any claim, set-off, defense or other right that
Borrower may have at the time against any beneficiary or any transferee of a
Letter of Credit (or any Persons for whom any such beneficiary or any such
transferee may be acting), Agent (other than a defense based on the gross
negligence or willful misconduct of Agent), the Lenders (other than a defense
based on the gross negligence or willful misconduct of the Lenders), or any
other Person, whether in connection with the Loan Documents and the transactions
contemplated thereby, the Letter of Credit Documents, or any unrelated
transaction;
(e) any draft or any other document presented under or in connection with
any Letter of Credit or other Loan Document proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; provided that payment by Agent under such Letter of
Credit against presentation of such draft or document shall not have constituted
gross negligence or willful misconduct of Agent or the Lenders;
(f) payment by Agent against presentation of a draft or certificate that
does not comply with the terms of the Letter of Credit; provided that such
payment shall not have constituted gross negligence or willful misconduct of
Agent or the Lenders; and
(g) any other circumstance or happening whatsoever other than the payment
in full of all obligations hereunder in respect of any Letter of Credit or any
agreement or instrument relating to any Letter of Credit, whether or not similar
to any of the foregoing, that might otherwise constitute a defense available to
or a discharge of Borrower; provided that such other circumstance or happening
shall not have been the result of gross negligence or willful misconduct of
Agent or the Lenders.
24
SECTION 2.19. FEES. In consideration of Agent and the Lenders establishing the
facility hereunder, making the Advances hereunder and issuing Letters of Credit
hereunder, Borrower shall pay to Agent, on behalf of Agent or the Lenders (as
applicable), the following fees and charges:
(a) A non-refundable facility commitment fee and other fees as described
in a separate agreement between Agent and Borrower (the "COMMITMENT FEE").
(b) Non-refundable fees ("UNUSED FACILITY FEE") in an amount equal to a
quarter percent (0.25%) of the total of (x) the Commitment less (y) the
aggregate amount of the then outstanding Advances less (z) Letter of Credit
Usage, which fee shall be payable, in arrears, quarterly on the first day of
each calendar quarter during the term of this Agreement.
(c) Non-refundable fees ("LETTER OF CREDIT FEE") in an amount equal to the
then applicable Eurodollar Spread on the daily average of the amount available
to be drawn under the issued and outstanding Letters of Credit, which fee shall
be payable, in arrears, quarterly on the first day of each calendar quarter
during the term of this Agreement. The Letter of Credit Fee shall be calculated
from time to time, taking into account any "step-down" or other reduction in the
amount available to be drawn under any particular Letter of Credit. In the event
of syndication of this Loan, in addition to the Letter of Credit Fee, a fronting
fee of 0.125% of the amount of any Letter of Credit shall be paid to Agent prior
to the issuance of any Letter of Credit hereunder.
SECTION 2.20. Unless a Default or an Event of Default has occurred and is
continuing, Borrower, by written notice to Agent, may request on up to three (3)
occasions on or before the second anniversary of the Closing Date that the
Commitment be increased by an amount not less than Five Million and No/100
Dollars ($5,000,000) and not more than One Hundred Thirty-Five Million and
No/100 Dollars ($135,000,000.00) in the aggregate (such that the Commitment
shall never exceed Two Hundred Million and No/100 Dollars ($200,000,000.00));
provided that for any such request (a) any Lender which is a party to this
Agreement prior to such request for increase, at its sole discretion, may elect
to increase its commitment and (b) in the event that no Lender elects to
increase its commitment, Agent shall use commercially reasonable efforts to
locate additional lenders willing to hold commitments for the requested
increase. In the event that Lenders commit to any such increase, (i) the
Commitment shall be increased by the amount committed to by the Lenders and any
new lenders; (ii) the applicable Percentage of each of the Lenders shall be
adjusted accordingly, (iii) if requested by any Lender making an additional or
new commitment, new Notes and Note Assumptions shall be issued, (iv) Borrower
shall make such borrowings and repayments as shall be necessary to effect the
reallocation of the Commitment, provided the same do not have any material
adverse effect upon the Borrower, and (v) other changes shall be made by way of
supplement, amendment or restatement of any Loan Document as may be necessary or
desirable to reflect the aggregate amount, if any, by which the Lenders have
agreed to increase the Commitment or any other lenders have agreed to make new
commitments pursuant to this Section 2.20; in each case notwithstanding anything
in Section 7.15 to the contrary, without the consent of any Lender not adversely
affected by any such supplement, amendment or restatement other than those
Lenders participating in the increase or increasing their Percentage of the
Commitment (it being understood that Agent shall execute any such supplement,
amendment or restatement as may be reasonably requested by
25
Borrower and necessary or desirable in connection with an increase in the
Commitment permitted pursuant to this Section 2.20). The fees payable by
Borrower upon any such increase in the Commitment shall be agreed upon by Agent
and Borrower at the time and as a condition of such increase. Notwithstanding
the foregoing, nothing in this Section 2.20 shall constitute or be deemed to
constitute an agreement by any Lender to increase its Commitment hereunder.
ARTICLE III.
CONDITIONS TO BORROWINGS
The obligation of the Lenders to make an Advance to Borrower is subject to
the satisfaction of the following conditions:
SECTION 3.1. CONDITIONS PRECEDENT TO CLOSING AND SUBSEQUENT ADVANCES. On or
prior to the Closing Date and the date of any subsequent Advance or Letter of
Credit issuance, as applicable, all obligations of Borrower hereunder to Agent
and the Lenders incurred prior to the Closing Date, the Advance date or Letter
of Credit issuance date, as applicable, and any amounts payable to Agent or the
Lenders on the Closing Date, the Advance date or Letter of Credit issuance date,
as applicable, shall have been paid in full, including any amounts due under
Section 2.19. In addition, the following conditions shall be satisfied:
(a) Receipt of Commitment Fee/Documents on Closing Date. On or before the
Closing Date, the Commitment Fee shall have been paid to Agent and Agent shall
have received the following, each duly executed by Borrower as of or prior to
the Closing Date and in form and substance satisfactory to Agent:
(i) The Promissory Notes;
(ii) The Environmental Indemnity;
(iii) The Guaranty;
(iv) The Assignment and Subordination of Advisory Agreement;
(v) An Interest Rate Agreement with Agent;
(vi) The Collateral Assignment of Interest Rate Agreement;
(vii) An opinion of counsel to Borrower and Guarantors substantially
in the form of Exhibit O attached hereto;
(viii) Good standing certificates with respect to Borrower, issued
by the Secretary of State of the State of Virginia and dated as of a date not
more than thirty (30) days prior to the Closing Date or otherwise reasonably
acceptable to Agent;
(ix) A certificate for Borrower, signed by an Authorized
Representative, in the form of Exhibit P attached hereto;
26
(x) A certificate of non-foreign status executed by Borrower;
(xi) A good standing certificate with respect to General Partner,
issued by the State Corporation Commission of Virginia and dated as of a date
not more than thirty (30) days prior to the Closing Date or otherwise reasonably
acceptable to Agent;
(xii) Certified copies of the articles of incorporation and bylaws
of General Partner and original resolutions and certificate of incumbency with
specimen signatures for Authorized Representatives with respect to General
Partner;
(xiii) A certificate of fact with respect to Advisor, issued by the
State Corporation Commission of Virginia and dated as of a date not more than
thirty (30) days prior to the Closing Date or otherwise reasonably acceptable to
Agent;
(xiv) Certified copies of certificate of formation and operating
agreement of Advisory and original resolutions and certificate of incumbency
with specimen signatures for Authorized Representatives with respect to Advisor;
(xv) Current financial statements of Borrower and Guarantors
(certified by an Authorized Representative);
(xvi) UCC lien searches, satisfactory to Agent, with respect to
Borrower, and conducted in the State Corporation Commission of Virginia and the
Secretary of State of Illinois;
(xvii) UCC lien searches, satisfactory to Agent, with respect to
General Partner and Advisor, conduced in the offices of the State Corporation
Commission of Virginia and the Secretary of State of Illinois, and with respect
to Xxxxxxxx, conducted in the offices of the Secretary of State of California
and Illinois;
(xviii) Such bankruptcy, judgment, federal tax lien and other
searches of public records as Agent may reasonably require with respect to
Borrower and Guarantors;
(xix) A side letter granting Agent a right of first refusal on
permanent financing on the Mortgaged Properties;
(xx) This Agreement; and
(xxi) All other documents and instruments as Agent may reasonably
require, including, without limitation, documentation evidencing that Borrower
has set up a Depository Account with Agent.
(b) Receipt of Documents on or before date of first Advance with respect
to a Mortgaged Property. On or before the date of the first Advance made to fund
Permitted Purposes with respect to a Mortgaged Property, Agent shall have
received each of the following, dated (unless otherwise set forth herein) as of
the date of such Advance and in form and substance satisfactory to Agent:
27
(i) A manager's certificate of the Executing Subsidiary, signed by
an Authorized Representative, in the form of Exhibit P-1 attached hereto;
(ii) (A) a good standing certificate from the state of formation in
respect of the applicable Executing Subsidiary, dated not more than thirty (30)
days prior to the date of the Advance, and (B) a certificate of the Secretary of
State of the state in which the Mortgaged Property is located, dated as of a
date not more than thirty (30) days prior to the date of the Advance, to the
effect that the Executing Subsidiary is authorized to do business in such state;
(iii) A Note Assumption, duly executed and delivered by the
applicable Executing Subsidiary;
(iv) A Mortgage for the Mortgaged Property, duly authorized,
executed, and delivered by the applicable Executing Subsidiary. Notwithstanding
anything herein to the contrary, Agent shall have the right to revise the
Mortgages to conform to local recording requirements and to include such other
provisions as Agent determines, in its sole discretion, are necessary to conform
to the laws of the state in which the applicable Mortgaged Property is located
with respect to the creation and perfection of liens and security interests and
the enforcement of remedies. Each Mortgage shall secure an amount up to
$200,000,000.00, except that, in those jurisdictions in which there is a
recording or similar tax imposed with respect to mortgage indebtedness, Agent
and Borrower shall cooperate with each other to allocate an appropriate portion
of the Loan to the Mortgaged Property, provided that (i) such cooperation shall
be without liability to Agent, (ii) Borrower shall promptly reimburse Agent upon
demand for any costs or expenses, including reasonable attorneys' fees and
disbursements, incurred by Agent in connection with such cooperation, and (iii)
the allocation shall in no way impair Agent's ability to realize upon the
portion of the Collateral Pool subject to the Mortgage to the full extent
provided for in the Loan Documents;
(v) Financing Statements for the Mortgaged Property, duly
authorized, executed and delivered, and in form suitable for recording and
filing in all necessary and appropriate recorders' and filing offices;
(vi) A mortgagee's policy of title insurance issued by a reputable
national title insurance company reasonably acceptable to Agent, in form and
substance satisfactory to Agent, (A) insuring Agent and the Lenders (in an
amount acceptable to Agent) that the Mortgage constitutes a valid first mortgage
lien on the Executing Subsidiary's interest in the Mortgaged Property, (B)
containing the following endorsements (the extent applicable and available in
the state where the applicable Mortgaged Property is located): comprehensive,
zoning 3.1 (with parking and excluding marketability limitation), tax parcel,
contiguity, survey, restrictions, location 1, location 5, location 6,
subdivision, PUD, utility facility, environmental protection lien, usury, doing
business, variable interest rate, aggregate liability/tie in, creditor's rights,
last dollar (first loss), and such other endorsements and affirmative coverage
as required by Agent, (C) with such reinsurance (with direct access provisions)
as Agent may request, and (D) subject only to the Permitted Encumbrances; and
Agent shall also have received evidence that the premiums in respect of such
title insurance policies have been paid;
28
(vii) A current survey of the Mortgaged Property by a licensed
surveyor reasonably satisfactory to Agent and such title insurance company,
certified to Agent, the Lenders, Borrower, the Executing Subsidiary and the
title insurance company satisfying the requirements set forth on Exhibit Q and
containing the form of certification attached hereto as Exhibit Q. showing no
state of facts unacceptable to Agent;
(viii) A copy of all recorded documents referred to, or listed as
exceptions to title in, the title policies referred to in subsection (vi) above,
and certified copies of appurtenant easements affecting or benefiting the
Mortgaged Property;
(ix) Environmental studies, in each case satisfactory to Agent in
its sole discretion, confirming that there are no Hazardous Materials,
including, without limitation, mold, mycotoxins and other microbial matter, on
or under the Mortgaged Property, except as set forth in such environmental
studies;
(x) UCC lien searches, satisfactory to Agent, with respect to the
Executing Subsidiary and conducted in the Offices of the Secretary of State of
the state in which the Mortgaged Property is located and the state of formation
of the Executing Subsidiary and in the county in which the Mortgaged Property is
located;
(xi) Such bankruptcy, judgment, federal tax lien, building code
violations and other searches of public records as the Agent may reasonably
require with respect to the Executing Subsidiary and the Mortgaged Property;
(xii) Certificates or binders naming Agent and each Lender as an
additional insured or loss-payee (as applicable) under the policies of insurance
required to be maintained with respect to the Mortgaged Property, accompanied by
a certification stating that all insurance required hereunder and under the
other Loan Documents has been obtained, such insurance satisfies the
requirements hereof and thereof, and is in full force and effect and that all
current premiums therefor have been paid in full;
(xiii) An opinion of counsel licensed in the state or commonwealth
in which the Mortgaged Property is located in the form of Exhibit 0-1 attached
hereto;
(xiv) A certified rent roll for the Mortgaged Property dated not
earlier than two (2) Business Days prior to the date of the Advance;
(xv) Subordination, Non-Disturbance and Attornment Agreements,
substantially in the form attached hereto as Exhibit R (the "SNDA"), from
tenants leasing at least seventy five percent (75%) of the rentable square
footage shown on the rent roll for the Mortgaged Property, including without
limitation, from all tenants at the Mortgaged Property whose premises consists
of at least 5,000 rentable square feet (the "REQUIRED TENANTS"); provided
however, Agent, in its sole discretion, may from time to time with respect to
one or more Mortgaged Properties, permit Borrower to deliver SNDAs from less
than the Required Tenants;
(xvi) Tenant Estoppel Certificates, substantially in the form
attached hereto as Exhibit S (the "ESTOPPEL"), from the Required Tenants;
provided however, Agent, in its sole
29
discretion, may from time to time with respect to one or more Mortgaged
Properties, permit Borrower to deliver Estoppels from less than the Required
Tenants;
(xvii) Evidence reasonably satisfactory to Agent as to the
compliance of the Mortgaged Property with all applicable zoning, subdivision and
land use, environmental and building statutes, codes, ordinances, regulations,
variances, and with all other laws affecting the use and operation of the
Mortgaged Properties (including the Americans with Disabilities Act);
(xviii) Evidence as to whether the Mortgaged Property is located in
a flood zone and flood insurance if such Mortgaged Property is located in a
flood zone;
(xix) A FIRREA Appraisal of the Mortgaged Property;
(xx) A certified copy of the management agreement for the Mortgaged
Property;
(xxi) An Assignment and Subordination of Management Agreement for
the Mortgaged Property;
(xxii) A certificate of non-foreign status executed by the Executing
Subsidiary;
(xxiii) A copy of the engineering report for the Mortgaged Property;
(xxiv) Copies of all the purchase agreement and closing documents
for the Mortgaged Property, including, without limitation, the deed and closing
statement;
(xxv) Property specific financial information for the Mortgaged
Property, including, without limitation, to the extent available, operating
statements for the immediately preceding three (3) years, the current
year-to-date operating statement and the capital expenditure budget;
(xxvi) Documentation evidencing that the Executing Subsidiary has
set up a Depository Account with Agent for the applicable Mortgaged Property;
(xxvii) Such consents or acknowledgments from such Persons as Agent
or its counsel may determine to be necessary or appropriate; and
(xxviii) Such other documents and instruments as Agent may deem
reasonably necessary or appropriate.
(c) Other Conditions. As of the Closing Date, at the time of the making by
the Lenders of each Advance (before as well as after giving effect to such
Advance and to the proposed use of the proceeds thereof) and at the time of the
issuance by the Agent, on behalf of the Lenders, of any Letter of Credit (before
as well as after giving effect to such Letter of Credit), each of the following
requirements shall be satisfied as determined by Agent in its sole and absolute
discretion:
30
(i) No suit, action, investigation, inquiry or other proceeding
(including, without limitation, the enactment or promulgation of a statute or
rule) by or before any arbitrator or any Governmental Authority shall be pending
and no preliminary or permanent injunction or order by a state or federal court
shall have been entered (i) in connection with this Agreement, the Promissory
Notes, any Loan Document or any of the transactions contemplated hereby or
thereby or (ii) which, in any such case, in the sole judgment of Agent, could
result in a Material Adverse Change.
(ii) There shall have been no Material Adverse Change. Neither
Borrower nor any Subsidiary of any Borrower shall be the subject of any
bankruptcy, reorganization, or insolvency proceeding.
(iii) No Default shall have occurred with respect to which a notice
shall have been given which remains uncured, and there shall be no continuing
Event of Default.
(iv) Agent shall be satisfied that the Mortgaged Properties and
their use comply with all applicable zoning, sub-division and building laws,
environmental protection and land use and development laws, ordinances and
regulations, and all other applicable federal, state and municipal laws and
requirements.
(v) No proceedings shall have been threatened or commenced by any
authority having the power of eminent domain to condemn any part of any
Mortgaged Properties and no part of the Mortgaged Properties shall have been
damaged and not repaired which Agent, in its sole judgment, deems material.
(vi) Agent shall have received payment of all costs and expenses
(including, without limitation, all applicable fees described in Section 2.19,
reasonable attorneys' fees and other disbursements) incurred by Agent in
connection with reviewing and evaluating the items furnished and the actions
purporting to satisfy the conditions and requirements to be satisfied pursuant
to this Section 3.1.
(vii) All representations and warranties contained herein shall be
true and correct in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of such
Advance or Letter of Credit and Borrower shall be in compliance in all material
respects with all covenants and agreements contained in Article V hereof and
elsewhere in this Agreement;
(viii) Agent shall have received such other documents or legal
opinions as Agent or counsel to Agent may reasonably request, all in form and
substance reasonably satisfactory to Agent.
(ix) No Default or Event of Default shall have occurred and be
continuing, or would result from such Advance or from the application of the
proceeds thereof, or from the issuance of such Letter of Credit, as applicable,
or shall have occurred during the two (2) calendar quarters immediately
preceding the date of the Notice of Borrowing or Notice of Issuance, as
applicable.
31
SECTION 3.2. ADDITIONAL CONDITIONS. At the time of the making by the Lenders of
an Advance hereunder, Agent shall have received evidence satisfactory to Agent
that Borrower (directly or through its Executing Subsidiaries) has paid the
Acquisition Costs with respect to a Mortgaged Property in an amount not less
than thirty-five percent (35%) of the total Acquisition Costs for such Mortgaged
Property; provided, however, until the Minimum Pool Conditions are satisfied,
Borrower shall deliver evidence satisfactory to Agent that Borrower (directly or
through its Executing Subsidiaries) has paid from its own funds (or pursuant to
a loan from a Subordinate Mortgagee) Acquisition Costs with respect to a
Mortgaged Property in an amount not less than fifty percent (50%) of the total
Acquisition Cost for such Mortgaged Property (the "EQUITY REQUIREMENT"). It is
understood and agreed that in no event shall Borrower become entitled to
reimbursement of all or any portion of the Equity Requirement. In addition,
prior to the making by the Lenders of each Advance (before as well as after
giving effect to such Advance and to the proposed use of the proceeds thereof):
(a) Approval of Additional Property. Agent shall have approved, in its
sole discretion, the Additional Property, and if such Additional Property is
approved by Agent, such Additional Property shall be presented to the Lenders by
Agent and shall be approved by the Required Lenders;
(b) Notice of Borrowing. Agent shall have received a Notice of Borrowing
from Borrower, accompanied by evidence satisfactory to Agent that all conditions
to the making of an Advance hereunder have been satisfied, at least three (3)
Business Days prior to the date of the proposed borrowing in accordance with
Article II;
(c) FIRREA Appraisal. A Notice of Borrowing containing a request for an
Advance with respect to a Mortgaged Property shall be accompanied by a FIRREA
Appraisal satisfactory to Lender confirming that the Loan to Value Ratio for the
Mortgaged Property does not exceed 0.65 to 1; provided, however, if the Minimum
Pool Conditions are not then satisfied, the Loan to Value Ratio for the
Mortgaged Property shall not exceed 0.5 to 1;
(d) Borrowing Base Loan Amount. Such Advance shall not cause the aggregate
principal amount of all Aggregate Advances to exceed the lesser of (i) the
Commitment and (ii) the Maximum Availability Amount (the "BORROWING BASE LOAN
AMOUNT");
(e) Loan to Value Ratio. Such Advance shall not cause the Projected Loan
to Value Ratio for all of the Mortgaged Properties to exceed 0.65 to 1;
provided, however, if the Minimum Pool Conditions are not then satisfied, the
Loan to Value Ratio for all of the Mortgaged Properties shall not exceed 0.5 to
1;
(f) Imputed Debt Service Coverage Ratio. Such Advance shall not cause the
Imputed Debt Service Coverage Ratio for any Mortgaged Property or all of the
Mortgaged Properties to exceed 1:40 to 1; provided, however, if the Minimum Pool
Conditions are not then satisfied, the Imputed Debt Service Coverage Ratio for
any Mortgaged Property or all of the Mortgaged Properties shall not exceed 1.65
to 1;
(g) Representations. All representations and warranties contained herein
shall be true and correct in all material respects with the same effect as
though such representations and
32
warranties had been made on and as of the date of such Advance and Borrower
shall be in compliance in all material respects with all covenants and
agreements contained in Article V hereof and elsewhere in this Agreement;
(h) Material Adverse Change. There shall have been no Material Adverse
Change;
(i) Litigation. No litigation, investigation or proceeding before or by
any arbitrator or Governmental Authority shall be continuing or threatened
against Borrower, a Subsidiary, General Partner or any of Xxxxxxxx, Xxxx Xxxxxxx
or Xxxxx Xxxxxxxx in connection with this Agreement and the other Loan Documents
which would result in a Material Adverse Change;
j) Additional Documentation. Agent shall have received such other
documents or legal opinions as Agent or counsel to Agent may reasonably request,
all in form and substance reasonably satisfactory to Agent,
(k) Default. No Default or Event of Default shall have occurred and be
continuing, or would result from such Advance or from the application of the
proceeds thereof, or shall have occurred during the two (2) calendar quarters
immediately preceding the date of the Notice of Borrowing.
(l) Conditions Satisfied. Each request for an Advance by Borrower and each
selection or deemed selection by Borrower of the Applicable Base Rate or the
Applicable Eurodollar Rate with respect to any Advance pursuant to Sections 2.6
or 2.7, shall constitute a representation and warranty by Borrower, as of the
date of the Advance, that the conditions specified in subsections (a)-(k) of
this Section 3.2 have been satisfied.
SECTION 3.3. CLOSING PROCEDURES. The Lenders and the Borrower agree that a "New
York" style closing of the Mortgaged Properties, i.e., the funding of the
Acquisition Costs for each Mortgaged Property, shall be provided in the
applicable amount after the satisfaction of the conditions set forth in Sections
3.1 and 3.2 (which will not require actual recording of the Mortgage and filing
of the UCC Financing Statements encumbering such Mortgaged Property as a
condition for the funding of such Acquisition Costs but delivery of a title
insurance policy insuring the Mortgage as a first priority lien, subject to no
liens or encumbrances, other than Permitted Encumbrances). The recorded Mortgage
shall be delivered to the Agent promptly after it is recorded.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants the following as of the date hereof and
further represents and warrants on the date of each Advance and the issuance
date of any Letter of Credit:
SECTION 4.1. GOOD STANDING. Borrower is duly organized, validly existing and in
good standing under the laws of the State of Virginia and each Executing
Subsidiary is or will be duly organized, validly existing, and in good standing
under the laws of the state of its organization.
33
Borrower and each Executing Subsidiary is or will be duly qualified to do
business as a foreign company and is or will be in good standing in each
jurisdiction where it owns property or where the conduct of its business or the
ownership of its property or assets (including, without limitation, the
respective Mortgaged Properties) requires such qualification, and has or will
have all powers and all governmental licenses, authorizations, consents, and
approvals required to carry on its business as is now or is proposed to be
conducted.
SECTION 4.2. AUTHORIZATION OF AGREEMENT; NO VIOLATION. The execution, delivery,
and performance by Borrower of this Agreement and of the Loan Documents (i) are
within Borrower's powers, (ii) have been duly authorized by all necessary
action, and (iii) do not violate or create a default under any Requirement of
Law, Borrower's organizational documents or any Contractual Obligation binding
on or affecting Borrower or its property.
SECTION 4.3. GOVERNMENTAL APPROVALS. No authorization or approval or other
action by, and no notice to or filing or registration with, any Governmental
Authority is required in connection with the execution, delivery, and
performance by Borrower of this Agreement or the other Loan Documents.
SECTION 4.4. BINDING EFFECT. This Agreement and the other Loan Documents have
each been duly executed by Borrower and each constitutes a legal, valid, and
binding obligation of Borrower, enforceable against Borrower in accordance with
its terms, except as enforcement thereof may be subject to (i) the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium, or similar law
affecting creditors, rights generally and (ii) general principles of equity
(regardless of whether such enforcement is sought in a proceeding in equity or
at law).
SECTION 4.5. FINANCIAL INFORMATION AND NO MATERIAL ADVERSE CHANGE. Each of the
financial statements delivered pursuant to Sections 5.2 (a) through (d) were
prepared in accordance with GAAP and fairly present the financial condition and
results of operation of the Persons and/or properties covered thereby on the
dates and for the periods covered thereby, except as disclosed in the notes
thereto and, with respect to normally recurring year-end adjustments. There have
been no Material Adverse Changes to any such financial statements.
SECTION 4.6. LITIGATION. There is no action, suit, or proceeding, or any
governmental investigation or any arbitration, in each case pending or, to the
knowledge of Borrower, threatened against Borrower, an Executing Subsidiary, or
any property of Borrower or an Executing Subsidiary before any court or
arbitrator or any governmental or administrative body, agency, or official (i)
which challenges the validity of this Agreement or any of the other Loan
Documents or (ii) which if adversely determined, and taking into account any
insurance with respect thereto, could result in a Material Adverse Change.
SECTION 4.7. COMPLIANCE WITH LAW. Borrower and each Executing Subsidiary is in
compliance with all Requirements of Law, its organizational documents and all
Contractual Obligations binding on or affecting it or any of its properties. The
execution and delivery by Borrower of this Agreement, the Promissory Notes and
the Loan Documents do not, and the performance by Borrower of this Agreement,
the Promissory Notes and each of the Loan Documents will not, (a) violate any
Requirement of Law, the violation of which could result in a Material Adverse
Change, (b) violate or contravene any provision of Borrower's organizational
34
documents, or any law, rule, regulation, order, writ, judgment, decree,
determination or award applicable to Borrower, (c) violate, contravene or result
in a breach of or constitute a default under any Contractual Obligation of
Borrower, or (d) result in, or require the creation or imposition of any Lien
upon or with respect to any of the Mortgaged Properties other than the Liens
created by the Loan Documents.
SECTION 4.8. EMPLOYEES. Neither Borrower nor any Executing Subsidiary has any
employees, any Plans, or any liabilities under any Plan of any other Person.
SECTION 4.9. ERISA. As of the date of this Agreement and throughout the term of
this Agreement, (i) neither Borrower nor any Executing Subsidiary is or will be
an "employee benefit plan" as defined in Section 3(3) of ERISA, which is subject
to Title I of ERISA, (ii) neither the assets of Borrower nor any Executing
Subsidiary are or will constitute "plan assets" of one or more such plans within
the meaning of 29 C.F.R. 2510.3-101 and (iii) neither Borrower nor any Executing
Subsidiary is or will be a "government plan" within the meaning of Section 3(32)
of ERISA.
SECTION 4.10. NO DEFAULT. Neither Borrower nor any Executing Subsidiary is in
default under, or with respect to, any of its Contractual Obligations in any
respect which could reasonably be expected to result in a Material Adverse
Change and no Default or Event of Default has occurred and is continuing
hereunder.
SECTION 4.11. IMPROVEMENTS.
(a) All of the improvements located on the Mortgaged Properties and the
use of such improvements are being lawfully occupied and any and all
certificates and permits required by applicable laws, rules, regulations, and
ordinances or in connection with the use, occupancy, and operation thereof have
been obtained.
(b) No portion of any of the Mortgaged Properties, nor any improvements
located on such Mortgaged Properties that are material to the operation, use, or
value thereof, have been damaged in any respect as a result of any fire,
explosion, accident, flood, or other casualty, except to the extent that the
same have been restored to their condition prior thereto.
(c) No written notices of violation of any federal, state, or local law or
ordinance or order or requirement have been received by Borrower, General
Partner, Advisor, Xxxxxxxx, any Executing Subsidiary or Property Manager with
respect to any Mortgaged Properties.
SECTION 4.12. INTELLECTUAL PROPERTY. Borrower owns, or is licensed to use, all
trademarks, trade names, copyrights, technology, know-how, and processes
necessary for the conduct of its business as currently conducted (the
"INTELLECTUAL PROPERTY") except for those the failure to own or license which
could not reasonably be expected to have a material adverse effect on the
business, financial condition, results of operations, or prospects of Borrower.
No claim has been asserted and is pending by any Person challenging or
questioning the use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, nor does Borrower know of any
valid basis for any such claim. The use of such Intellectual Property by
Borrower does not infringe on the rights of any Person, except for such claims
and infringements that, in
35
the aggregate, could not reasonably be expected to have a material adverse
effect on the business, financial condition, results of operations, or prospects
of Borrower.
SECTION 4.13. NO BURDENSOME RESTRICTIONS. To Borrower's knowledge, no
Requirement of Law or Contractual Obligation of Borrower could reasonably be
expected to result in a Material Adverse Change.
SECTION 4.14. TAXES. Borrower and each Executing Subsidiary has filed or caused
to be filed all tax returns that, to the knowledge of Borrower, are required to
be filed and has paid all taxes shown to be due and payable on such returns or
on any assessments made against it or any of its property and all other taxes,
fees, or other charges now due and payable imposed on it or any of its property
by any Governmental Authority (other than any the amount or validity of which
are currently being contested in good faith by appropriate proceedings and with
respect to which adequate reserves in conformity with GAAP have been provided on
the books of Borrower). No tax Lien has been filed, and, to the knowledge of
Borrower, no claim is being asserted, with respect to any such tax, fee, or
other charge.
SECTION 4.15. INVESTMENT COMPANY ACT; OTHER REGULATIONS. Borrower is not an
"investment company," or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended. Borrower
is not subject to regulation under any federal or state statute or regulation
which limits its ability to incur Indebtedness.
SECTION 4.16. INSURANCE. Notwithstanding anything to the contrary contained in
the Mortgages and subject to Section 4.16(b), Borrower maintains upon or in
connection with each of its Properties:
(a) Property and casualty insurance coverage evidenced by original or
certified copies of insurance policies or binders for such insurance, together
with evidence that the premiums for such policies have been paid current. Such
insurance policies shall insure each of the Mortgaged Properties for 100% of
their full replacement cost in so-called "all risk" form and with coverage for
floods, terrorism, earthquakes (except as provided in Section 4.16(b)) and such
other hazards (including "collapse" and "explosion" and mold related damage) as
Agent may require for each of the Mortgaged Properties and as are consistent
with reasonable and customary requirements in the industry. Such insurance
policies shall contain replacement cost and agreed amount endorsements (with no
reduction for depreciation), an endorsement providing Building Ordinance
Coverage and an endorsement covering the costs of demolition and increased costs
of construction due to the enforcement of building codes or ordinances. To the
extent there exists a boiler on the premises of any of the Mortgaged Properties,
Borrower shall also furnish insurance providing boiler and machinery
comprehensive coverage for all mechanical and electrical equipment at each of
such Mortgaged Properties insuring against breakdown or explosion of such
equipment on a replacement cost value basis. Borrower shall also furnish
business interruption or loss of rental income insurance in connection with all
policies covering property and boiler and machinery insurance for a period of
not less than one (1) year endorsed, other than with respect to boiler and
machinery insurance, to provide a 180 day extended period of indemnity. All
insurance required under this Section 4.16(a) shall (i) be with companies and in
amounts and with coverage and deductibles satisfactory to Agent and (ii) include
endorsements
36
naming the Lenders as loss payees and shall have endorsed thereon the standard
mortgagee clause in favor of the Lenders.
(b) The earthquake insurance provided for in Section 4.16(a) but only for
the Mortgaged Properties and only to the extent (i) any Mortgaged Property is
located in an earthquake prone area and (ii) such insurance is available at
commercially reasonable rates.
(c) Liability and worker's compensation insurance evidenced by original or
certified copies of insurance policies, binders for such insurance policies, or
certificates of insurance, together with evidence that the premiums for such
policies have been paid current. Such insurance shall provide for (i) commercial
general liability (including contractual liability) covering each of the
Mortgaged Properties and Borrower's operations thereon in an amount not less
than $2,000,000 per occurrence and not less than $5,000,000 in the aggregate;
(ii) commercial automobile liability with a limit not less than $1,000,000
combined single limit and endorsed to cover owned, hired and non-owned
automobiles; and (iii) worker's compensation insurance covering all of
Borrower's employees and contracted parties (including their employees) situated
at the Mortgaged Properties in accordance with the statutory requirements of the
states where the applicable Mortgaged Property is located and including an
endorsement for employer's liability coverage. Borrower shall also furnish
umbrella liability coverage in excess of the foregoing liability coverage with a
limit of not less than $25,000,000. The commercial general liability and
automobile policies and umbrella liability policy shall name the Lenders as
additional insureds. Such policies shall also contain a so-called
"products-completed operations endorsement" and mold related liability coverage.
(d) All companies issuing policies required under this Section 4.16 shall
have a current Best Insurance Reports rating no less favorable than "A", and all
such companies shall be licensed to do business in the states where the
applicable Mortgaged Property is located. All policies required under this
Section 4.16 shall provide that (i) the insurance evidenced thereby shall not be
canceled or modified without at least thirty (30) days' prior written notice
from the insurance carrier to Agent; and (ii) no act or thing done by Borrower
or any Affiliate thereof shall invalidate the policy as against the Lenders.
Borrower shall deliver renewal certificates of all policies of insurance
required under this certificate, together with written evidence that the
premiums are paid current, at least thirty (30) days prior to the expiration of
the then current policy.
SECTION 4.17. MORTGAGED PROPERTIES.
(a) Borrower has good and marketable title to all of its assets and
properties, and each Executing Subsidiary shall have good and marketable title
to the applicable Mortgaged Property, subject to no mortgage, security interest,
pledge, lien, charge, encumbrance or title retention or other security agreement
or arrangement of any nature whatsoever, except Permitted Encumbrances. Borrower
and the applicable Executing Subsidiary will forever warrant and defend the
title of the Mortgaged Properties against the lawful claims and demands of all
persons whomsoever (subject to the Permitted Encumbrances) for such Mortgaged
Properties.
(b) There are no pending or, to the best knowledge of Borrower, threatened
proceedings or actions to revoke, attack, invalidate, rescind, or modify in any
material respect
37
(i) the zoning of any Mortgaged Property or any part thereof, or (ii) any
building or other permits heretofore issued with respect to any Mortgaged
Property or any part thereof, or asserting that any such zoning or permits do
not permit the operation of any Mortgaged Property or any part thereof or that
any improvements located on such Mortgaged Property cannot be operated in
accordance with its intended use or is in violation of applicable Use
Requirements.
(c) The Mortgage covering each such Mortgaged Property creates a valid and
enforceable first Lien on such property described therein, as security for the
repayment of the Indebtedness incurred by Borrower hereunder and under the other
Loan Documents, subject only to the Permitted Encumbrances applicable to such
Mortgaged Property.
(d) The Collateral Pool is now, and so long as the Commitment remains in
effect or any monetary obligation to Agent or the Lenders hereunder or under the
Promissory Notes or the other Loan Documents shall remain unpaid, will be owned
solely by Borrower or the applicable Executing Subsidiary, and said Collateral
Pool, including the proceeds resulting from the sale or other disposition
thereof, is and will remain free and clear of any Liens except the Permitted
Encumbrances and the other Liens granted pursuant to the Loan Documents to Agent
and the Lenders, which Liens to Agent and the Lenders shall, at all times, be
first and prior on the Collateral Pool and all proceeds resulting from the sale
or other disposition thereof, and no further action need be taken to perfect
said Liens.
(e) Neither the existence of any improvements upon a Mortgaged Property
nor the present use or condition of any Mortgaged Property violate in any
material respect any Use Requirements. With respect to each Mortgaged Property,
neither the zoning nor any other right to carry on the present use of such
Mortgaged Property is to any extent dependent upon or related to any other real
estate. Each Mortgaged Property may be operated in its current fashion and
Borrower has received no written notices from any Governmental Authorities
alleging any violation by any Mortgaged Property of any Requirement of Law,
including but not limited to applicable Use Requirements.
(f) There are no pending or, to the knowledge of Borrower, contemplated or
threatened proceedings relating to any (i) taking by eminent domain or other
condemnation of any portion of any Mortgaged Property, (ii) condemnation or
relocation of any roadways abutting any Mortgaged Property and (iii) denial of
access to any Mortgaged Property from any point of access to such Mortgaged
Property.
(g) Each Mortgaged Property has adequate and permanent legal access to
water, gas, and electrical supply, storm, and sanitary sewerage facilities,
other required public utilities (with respect to each of the aforementioned
items by means of either a direct connection to the source of such utilities or
through connections available on publicly dedicated roadways directly abutting
such Mortgaged Property), parking, and means of access between such Mortgaged
Property and public highways over recognized curb cuts; and all of the foregoing
comply with all applicable Use Requirements.
(h) Each Mortgaged Property is taxed separately without regard to any
other real estate and constitutes a legally subdivided lot under all applicable
Use Requirements (or, if not subdivided, no subdivision or platting of such
Mortgaged Property is required under applicable
38
Requirements of Law), and for all purposes each Mortgaged Property may be
mortgaged, conveyed, and otherwise dealt with as an independent parcel.
SECTION 4.18. FULL AND ACCURATE DISCLOSURE. No statement of fact made by or on
behalf of Borrower in this Agreement or in any of the other Loan Documents, or
any certificate or financial statement furnished by Borrower to Agent contains
any untrue statement of a material fact or omits to state any material fact
necessary to make statements contained herein or therein not misleading.
SECTION 4.19. SOLVENCY. Within the meaning of Section 548 of the Bankruptcy
Code, the Uniform Fraudulent Transfer Act and the Uniform Fraudulent Conveyance
Act as in effect in any relevant jurisdiction, and any similar laws or statutes,
and after giving effect to the transactions contemplated hereby: the fair
saleable value of Borrower's assets exceeds and will, immediately following the
making of the Advances, exceed Borrower's total liabilities including, without
limitation, subordinated, unliquidated, disputed, and contingent liabilities;
the fair saleable value of Borrower's assets is and will, immediately following
the making of each Advance, be greater than Borrower's probable liabilities,
including the maximum amount of its contingent liabilities on its debts as such
debts become absolute and matured; Borrower's assets do not and, immediately
following the making of the Advances will not, constitute unreasonably small
capital to carry out its business as conducted or as proposed to be conducted;
and Borrower does not intend to, and does not believe that it will, incur debts
and liabilities (including without limitation contingent liabilities and other
commitments) beyond its ability to pay such debts as they mature (taking into
account the timing and amounts of cash to be received by Borrower and the
amounts to be payable on or in respect of obligations of Borrower).
SECTION 4.20. NOT FOREIGN PERSON. Borrower is not a "foreign person" within the
meaning of Section 1445(f)(3) of the Code.
SECTION 4.21. ASSESSMENTS. There are no pending or, to Borrower's knowledge,
proposed special or other assessments for public improvements or otherwise
affecting any Mortgaged Property, nor, to Borrower's knowledge, are there any
contemplated improvements to any Mortgaged Property that may result in such
special or other assessments.
SECTION 4.22. FLOOD ZONE. Except as disclosed by a survey delivered pursuant to
Article III, no Mortgaged Property is located in a flood hazard area as defined
by the Federal Insurance Administration.
SECTION 4.23. PHYSICAL CONDITION. Each Mortgaged Property is free of material
structural defects and all building systems contained therein are in good
working order subject to ordinary wear and tear.
SECTION 4.24. OPERATION OF PROPERTIES. Each Mortgaged Property is being operated
and maintained in accordance with Borrower's usual and customary business
practices.
SECTION 4.25. MARGIN. Borrower is not engaged in the business of extending
credit for the purpose of purchasing or carrying any margin stock or margin
securities (within the meaning of Regulations T, U and X issued by the Board of
Governors of the Federal Reserve System), and no proceeds of any Advance will be
used, directly or indirectly, to purchase or carry any margin
39
stock or margin securities or to extend credit to others for the purpose of
purchasing or carrying any margin stock or margin securities. None of the
transactions contemplated by this Agreement will violate or result in a
violation of Section 7 of the Securities Exchange Act of 1934, as amended.
SECTION 4.26. HAZARDOUS MATERIALS. Except as disclosed on environment studies
delivered to Agent, no Hazardous Materials are located on or about the Mortgaged
Properties, and the Mortgaged Properties do not contain any underground tanks
for the storage or disposal of Hazardous Materials. Further, except as disclosed
in environmental studies delivered to Agent, (i) Borrower has not, and to the
knowledge of Borrower no other party has, (A) stored or treated Hazardous
Materials, (B) disposed of Hazardous Materials or incorporated Hazardous
Materials into, on or around the Mortgaged Properties and permitted any
underground storage tanks to exist on the Mortgaged Properties, (ii) no
complaint, order, citation or notice with regard to air emissions, water
discharges, noise emissions, or Hazardous Materials, if any, or any other
environmental, health, or safety matters affecting the Mortgaged Properties or
any portion thereof, from any person, government or entity, has been issued to
Borrower which has not been remedied or cured, and (iii) Borrower or the
applicable Executing Subsidiary has complied in all material respects with all
Requirements of Law affecting the Mortgaged Properties. Any qualification
contained in this Section made with reference to environmental studies delivered
to Agent shall not abrogate or vitiate any indemnity made pursuant to this
Agreement or any of the other Loan Documents or excuse Borrower from the
performance of any remediation or other obligation contained in this Agreement
or in any of the other Loan Documents.
SECTION 4.27. BROKERAGE. Borrower has not dealt with any broker in connection
with this Agreement and the credit facilities offered hereby. Borrower
indemnifies the Lenders against any liabilities resulting from a breach of the
representation set forth in the foregoing sentence, including without limitation
all expenses incurred by the Lenders in connection with the defense of any
action or proceeding brought to collect any such brokerage fees or commissions
not so disclosed.
SECTION 4.28. REPRESENTATIONS AND WARRANTIES IN THE LOAN DOCUMENTS. The
representations and warranties of Borrower in each of the Loan Documents are
true, complete and correct in all material respects, and Borrower hereby
confirms each such representation and warranty as being true, complete and
correct in all material respects as of the relevant dates with the same effect
as if set forth in its entirety herein.
SECTION 4.29. LOAN DOCUMENTS. The provisions of the Loan Documents are each
effective to create, in favor of Agent, a legal, valid and enforceable Lien on
or security interest in all of the collateral described therein, and when the
appropriate recordings and filings have been effected in the appropriate public
offices (or, in the case of collateral represented by certificates, when such
certificates have been pledged to and received by Agent), the Loan Documents
will constitute a perfected first Lien on and security interest in all right,
title, estate and interest of Borrower or the applicable Executing Subsidiary in
the collateral described therein, prior and superior to all other Liens except
for Permitted Encumbrances and as otherwise permitted under this Agreement.
40
SECTION 4.30. UTILITIES. All utility services necessary for the operation of the
Mortgaged Properties for their intended purposes are available at the boundaries
of the Mortgaged Properties or will be available within the boundaries as
needed.
SECTION 4.31. LABOR AND MATERIALS. No amounts will be owed to any contractor or
subcontractor furnishing labor or materials to the Mortgaged Property.
SECTION 4.32. USURY. The proceeds of the Loan will be used solely for the
purposes of paying for or reimbursing Borrower for the Permitted Purposes. The
performance by Borrower, the Executing Subsidiaries or the Guarantors of their
respective obligations hereunder and under the other Loan Documents and the
payment by Borrower of the interest rate and other charges under the Promissory
Notes and hereunder shall not cause the Loan to be usurious or illegal under
applicable law.
SECTION 4.33. LEASES. Except as shown on the rent roll of a particular Mortgaged
Property, there are no Leases covering any portion of such Mortgaged Property.
The Executing Subsidiaries are not in default under any Lease, and to the
Borrower's knowledge after due inquiry, none of the tenants under the Leases are
in default of their respective Leases. Neither Borrower nor any Executing
Subsidiary has executed any prior assignment of the Leases, nor has either of
them performed any act or executed any other instrument which might prevent
Lenders from operating under or enforcing any of the terms and conditions of the
Mortgages applicable to Lender's security interests in such Leases or which
would limit such operation or enforcement.
SECTION 4.34. COMMERCIAL PURPOSES. The Executing Subsidiaries hold their
interest in the Mortgaged Properties for commercial or investment purposes. The
Executing Subsidiaries shall be a single purpose entity whose sole business is
the ownership, operation and management of the Mortgaged Properties.
SECTION 4.35. EXEMPT TRANSACTION. The Loan is an exempt transaction under the
Truth-in-Lending Act(15 U.S.C.A. Sections 1601, et seq.).
SECTION 4.36. REPORTABLE TRANSACTION. The Borrower does not intend to treat the
Advances and related transactions as being a "reportable transaction" (within
the meaning of Treasury Regulation Section 1.6011-4). In the event Borrower
determines to take any action inconsistent with such intention, it will promptly
notify the Agent thereof.
ARTICLE V.
COVENANTS
SECTION 5.1. CERTAIN AFFIRMATIVE COVENANTS. So long as the Commitment remains in
effect or any amounts due to Agent or the Lenders hereunder or under the
Promissory Notes or the other Loan Documents shall remain unpaid, Borrower (and
each Executing Subsidiary, as appropriate) will:
41
(a) Payment of Amounts Due. Duly and punctually pay or reimburse when due
or, if there is no specified due date, when demanded, the principal and interest
on the Promissory Notes and all other amounts due under this Agreement and the
other Loan Documents.
(b) Construction. In the event of any construction on a Mortgaged
Property, continuously and diligently prosecute the construction thereof to
completion in a good and workmanlike manner, free and clear of all liens,
charges and encumbrances for labor or materials furnished or claimed to have
been furnished in connection therewith.
(c) Existence. Preserve and maintain its existence, rights, and franchises
in its state or organization and, with respect to each, Executing Subsidiary, in
the state in which such Executing Subsidiary owns a Mortgaged Property.
(d) Requirement of Law. Comply in all material respects with all
applicable Requirements of Law, Use Requirements and all agreements and grants
of easements or rights-of-way, permits, declarations of covenants, conditions
and restrictions, disposition and development agreements, planned unit
development agreements, management or parking agreements, party wall agreements
or other instruments affecting the Mortgaged Properties.
(e) Impositions. Pay (i) all taxes, assessments and governmental charges
imposed upon it or upon its property, and (ii) all claims (including, without
limitation, claims for labor, materials, supplies, or services) which might, if
unpaid, become a Lien upon the Mortgaged Properties or any of them unless, in
each case, the validity or amount thereof is being contested in good faith by
appropriate proceedings and Borrower has maintained adequate reserves in an
amount reasonably satisfactory to Agent with respect thereto.
(f) Books and Records. Keep accurate records and books of account in which
full, accurate and correct entries shall be made of all dealings or transactions
in relation to its business and affairs in accordance with GAAP. Upon reasonable
prior notice, Borrower shall permit representatives of any Lender to visit its
offices and inspect, examine and make abstracts from any of its books and
records at any reasonable time and as often as may reasonably be desired, and to
discuss the business, operations, and financial and other condition of Borrower
with officers and employees of Borrower and with its independent certified
public accountants, if any, in the presence of a representative of Borrower.
(g) Inspections. Permit any representative of Agent or the Lenders to
visit and inspect any of the Mortgaged Properties, to examine its books and
records and to make copies and take extracts therefrom, and to discuss its
business, operations, finances, and accounts with its officers, accountants, and
agents, all upon reasonable notice from Agent and at such times and as often as
Agent may reasonably request.
(h) Maintenance of Property. Keep all property useful and necessary in its
business in good working order and condition (reasonable wear and tear excepted)
and operate such property in a manner consistent with the operation thereof as
of the date of this Agreement and otherwise consistent with prudent business
practices.
(i) Management of Mortgaged Properties. Borrower, General Partner, the
applicable Executing Subsidiary or an Affiliate of any of the foregoing shall
directly operate and manage
42
the business of the Executing Subsidiaries at each of the Mortgaged Properties;
provided, however, that upon receipt of the prior written consent of Agent,
Borrower may enter into an agreement acceptable to Agent for the management of
any Mortgaged Property with a third party acceptable to Agent.
(j) Hazardous Material. Xxxxx and/or remove any Hazardous Materials
present in, on or under any of the Mortgaged Properties in violation of any
applicable Requirement of Law, including asbestos and asbestos-containing
materials, and remove asbestos and asbestos-containing materials from any
portion of the Mortgaged Properties in which Borrower undertakes construction,
renovation or other work to the extent required by applicable Requirement of
Law.
(k) Loan Documents. Perform all covenants (affirmative and negative)
contained in each of the Loan Documents with the same effect as if set forth in
their entirety herein.
(l) Insurance. Keep its and their respective assets insured in the manner
and in the amounts set forth in Section 4.16.
(m) Additional Documents. Borrower agrees upon demand of Agent to do any
act or execute any additional documents (including, but not limited to, security
agreements on any personalty included or to be included in the Collateral Pool)
as may be reasonably required by Agent to confirm the Lien of the Loan Documents
or to exercise or enforce its rights under this Agreement, the Promissory Notes
or the Loan Documents and to realize thereon. This covenant shall survive the
termination of this Agreement until payment in full of all amounts due hereunder
or under the Promissory Notes and the Loan Documents, provided that the covenant
shall be reinstated if any payment of all amounts due hereunder or under the
Promissory Notes and the Loan Documents is required to be returned to the payor
or any other party under any applicable bankruptcy law.
(n) Actual Debt Service Coverage Ratio. Maintain an Actual Debt Service
Coverage Ratio of not less than 1.50 to 1 with respect to the Mortgaged
Properties. The Actual Debt Service Coverage Ratio shall be tested each calendar
quarter and at the time of each Advance hereunder.
(o) Indebtedness to Total Assets. Maintain a ratio of Indebtedness to
Total Assets of not more than 0.70 to 1. The ratio of Indebtedness to Total
Assets shall be tested each calendar quarter and at the time of each Advance
hereunder.
(p) Delivery of Notices. Borrower shall promptly provide to the Agent
copies of all notices given to or received from any governmental authority.
(q) Replacement Reserve. The Executing Subsidiaries shall maintain the
Replacement Reserves for each Mortgaged Property.
(r) Leases.
(i) Each Executing Subsidiary shall observe and perform all of the
covenants, terms, conditions and agreements contained in the Leases to be
observed or performed by the
43
lessor thereunder, and each Executing Subsidiary shall not do or suffer to be
done anything to impair the security thereof;
(ii) Each Executing Subsidiary shall not collect any of the rents,
issues, income or profits assigned hereunder more than thirty (30) days in
advance of the time when the same shall become due, except for security or
similar deposits;
(iii) Prior to giving any consent (including, but not limited to,
any consent to any assignment of, or subletting under, any Lease, except as
expressly permitted thereby) or approval, required or permitted by such terms
and provisions or cancel or terminate any Major Lease, each Executing Subsidiary
shall obtain Agent's prior written consent;
(iv) Each Executing Subsidiary shall, at its sole cost and expense,
appear in and defend any and all actions and proceedings arising under, relating
to or in any manner connected with any Lease or the obligations, duties or
liabilities of the lessor or any tenant or guarantor thereunder, and shall pay
all costs and expenses of Agent, including court costs and reasonable attorneys'
fees, in any such action or proceeding in which Agent may appear;
(v) Each Executing Subsidiary shall give prompt notice to Agent of
any notice of any default by the lessor under any Lease received from any tenant
or guarantor thereunder;
(vi) Each Executing Subsidiary shall enforce the observance and
performance of each covenant, term, condition and agreement contained in each
Major Lease to be observed and performed by the tenants and guarantors
thereunder and shall immediately notify Agent of any material breach by the
tenant or guarantor under any such Major Lease;
(vii) If any tenant under any Major Lease is or becomes the subject
of any proceeding under the Bankruptcy Code or any other federal, state or local
statute which provides for the possible termination or rejection of the Leases
assigned hereby, each Executing Subsidiary covenants and agrees that if any such
Major Lease is so terminated or rejected, no settlement for damages shall be
made without the prior written consent of Agent, and any check in payment of
damages for termination or rejection of any such Major Lease will be made
payable both to the applicable Executing Subsidiary and the Lenders. Executing
Subsidiary hereby assigns any such payment to the Lenders and further covenants
and agrees that upon the request of the Lenders, it will duly endorse to the
order of the Lenders any such check, the proceeds of which shall be applied in
accordance with the provisions of the Assignment of Leases and Rents; and
(viii) Not later than thirty (30) days after the end of each
calendar quarter, each Executing Subsidiary shall deliver to Agent a certified
rent roll for the Mortgaged Property as of the last day of such period in a form
reasonably satisfactory to Agent.
(s) Management of Executing Subsidiaries. Each Executing Subsidiary which
is a limited liability company shall be member managed by Borrower or managed by
Advisor. Each Executing Subsidiary which is a limited partnership shall have as
its managing general partner either Advisor or an entity wholly owned and
controlled by Borrower or Advisor.
44
(t) Depository Accounts. Borrower will set up and maintain its primary
Depository Account with Agent and each Executing Subsidiary will set up and
maintain and/or cause Property Manager to set up and maintain a Depository
Account with respect to the applicable Mortgaged Property with Agent. The
Executing Subsidiary or Property Manager, as applicable, shall not be permitted
to maintain a Depository Account with any entity other than Agent with respect
to the Mortgaged Properties.
(u) Borrower shall at all times, until all Indebtedness of the Borrower
under the Loan Documents has been satisfied, maintain an Interest Rate Agreement
acceptable to Agent in full force and effect.
SECTION 5.2. REPORTING COVENANTS. So long as the Commitment remains in effect or
any monetary obligation to Agent or the Lenders hereunder or under the
Promissory Notes or the other Loan Documents shall remain unpaid, Borrower will
furnish to Agent and each Lender at Borrower's sole cost and expense:
(a) Annual Financial Statements With Respect to Borrower. As soon as
available and in any event within ninety (90) days after the end of each fiscal
year, a consolidated balance sheet of Borrower and its Subsidiaries as at the
end of such year and the related consolidated statements of income, retained
earnings, and cash flow of Borrower and its Subsidiaries for such fiscal year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail and accompanied by a report thereon of
independent public accountants of recognized national standing acceptable to
Agent, which such report shall be unqualified as to scope of audit and shall
state that such consolidated financial statements present fairly the
consolidated financial condition as at the end of such fiscal year, and the
consolidated results of operations and changes in cash flow for such fiscal
year, of Borrower and its Subsidiaries in accordance with GAAP.
(b) Quarterly Financial Statements With Respect to Borrower. As soon as
available and in any event within forty-five (45) days after the end of each
fiscal quarter, a consolidated balance sheet of Borrower and its Subsidiaries as
at the end of such quarter and the related consolidated statements of income,
retained earnings, and cash flow of Borrower and its Subsidiaries for such
fiscal quarter and for the portion of Borrower's fiscal year ended at the end of
such quarter, setting forth in each case in comparative form the figures for the
corresponding quarter and the corresponding portion of Borrower's previous
fiscal year, all in reasonable detail and certified by Borrower's Authorized
Representative that they are complete and correct and that they fairly present
the consolidated financial condition as at the end of such fiscal quarter, and
the consolidated results of operations and changes in cash flow for such fiscal
quarter and such portion of Borrower's fiscal year, of Borrower and its
Subsidiaries in accordance with GAAP (subject to normal, year-end audit
adjustments). Each such quarterly financial statement shall include a
calculation of the aggregate Indebtedness, EBITDA and Debt Service of Borrower
and its Subsidiaries.
(c) Annual Financial Statements With Respect to the Mortgaged Properties.
As soon as available and in any event within ninety (90) days after the end of
each fiscal year of Borrower or at such time as the financial statements
described in Section 5.2(a) above are furnished to Agent, a statement of gross
revenues, direct operating expenses and net income of
45
each of the Mortgaged Properties for such fiscal year, each of which statements
shall (i) set forth in comparative form the figures for gross income, direct
operating expenses and net income for the previous fiscal year, (ii) be prepared
in reasonable detail, (ii) be certified by Borrower's Authorized Representative
that they are complete and correct and that they fairly present the gross
revenues, direct operating expenses and net income of each such property as at
the end of such fiscal year, in accordance with GAAP and (iv) state that such
consolidated statement presents fairly the gross revenues, direct operating
expenses and net income as at the end of such fiscal year of each such statement
in accordance with GAAP.
(d) Quarterly Financial Statements With Respect to the Mortgaged
Properties. As soon as available and in any event within thirty (30) days after
the end of each calendar quarter, a statement of gross revenues, direct
operating expenses and net income for each of the Mortgaged Properties as at the
end of such quarter, each of which statements shall (x) set forth in comparative
form the figures for the corresponding month during Borrower's previous fiscal
year, (y) be prepared in reasonable detail and (z) be certified by Borrower's
Authorized Representative that they are complete and correct and that they
fairly present the gross revenues, direct operating expenses and net income of
each such property as at the end of such month, in accordance with GAAP (subject
to normal, year-end audit adjustments). Rent Rolls for each of the Mortgaged
Properties shall also be included with such quarterly financial statements.
(e) No Default/Compliance Certificate. Together with the financial
statements required pursuant to Sections 5.2(a), (b), (c) and (d) above, a
certificate of an Authorized Representative to the effect that, based upon a
review of Borrower's activities and such financial statements during the period
covered thereby, that (i) Borrower is in compliance with the covenants set forth
in Sections 5.1 (n) and (o), and (ii) no Event of Default and no Default exists
under this Agreement, or if an Event of Default or a Default exists hereunder,
specifying the nature thereof and Borrower's actions taken or proposed to be
taken in response thereto. An Authorized Representative shall complete the form
of certificate attached as Exhibit K to this Agreement and shall certify thereon
that Borrower is in compliance with all financial covenants under this Agreement
(the "COMPLIANCE CERTIFICATE").
(f) Notice of Default or Events of Default. Promptly after acquiring
knowledge of the occurrence of a Default or an Event of Default, a certificate
of an Authorized Representative specifying the nature thereof and Borrower's
proposed response thereto.
(g) Litigation. Promptly after (i) the occurrence thereof, Borrower shall
deliver notice of the institution of, or any Material Adverse Change in, a Major
Action, (ii) Borrower receives actual knowledge thereof, Borrower shall deliver
notice of the threat of any such action, suit, proceeding, investigation or
arbitration that could result in a Material Adverse Change, or (iii) receipt
thereof, Borrower shall deliver notice of any claims relating to the Lenders'
interests or any proposal by a Governmental Authority to acquire any part of the
Mortgaged Properties.
(h) Adverse Change. Immediately after Borrower knows of the occurrence of
any change, event or circumstance which could result in a Material Adverse
Change with respect to (i) the transactions contemplated by this Agreement, the
Promissory Notes, or any Loan Documents, including, without limitation,
Borrower's ability to perform any of its obligations under this Agreement or any
of the other Loan Documents, (ii) the business, condition (financial
46
or otherwise), prospects or results of operation of Borrower or any of the
Mortgaged Properties, a certificate of an Authorized Representative specifying
the nature of such change.
(i) Auditors Letters. Annually, letters from Borrower's independent public
accountants addressed to Agent and the Lenders stating that in the course of the
conduct of their audit of Borrower's financial statements and their review of
Borrower's accounting procedures, such accountants discovered no material
weakness or other problem with Borrower's record-keeping controls, accounting
procedures or otherwise.
(j) Other Information. With reasonable promptness, such other information
about Borrower and the Mortgaged Properties as Agent or the Lenders may
reasonably request from time to time.
SECTION 5.3. NEGATIVE COVENANTS. So long as the Commitment remains in effect or
any monetary obligations to Agent or the Lenders hereunder or under the
Promissory Notes or the other Loan Documents shall remain unpaid, neither
Borrower nor any Executing Subsidiary will:
(a) Indebtedness. Create, incur, assume, or suffer to exist, any
Indebtedness other than:
(i) the Indebtedness hereunder and under the other Loan Documents;
(ii) non-recourse Indebtedness (which is not secured by a Mortgage)
in the nature of a deferred purchase price for a Mortgaged Property;
(iii) unsecured current liabilities (not the result of borrowing)
incurred in the ordinary course of business for current purposes and not
represented by any note or other evidence of Indebtedness;
(iv) subordinate loans used for the acquisition of Mortgaged
Properties secured by junior mortgages encumbering a Mortgaged Property with
respect to which Agent has entered into Intercreditor Agreements with the
applicable Subordinate Mortgagees; provided such loans have a maturity date no
longer than one hundred twenty (120) days after the date the applicable
Mortgaged Property is acquired by the applicable Executing Subsidiary; and
(v) non-recourse Indebtedness (with customary recourse carveouts)
not secured by or associated with the Mortgaged Property.
(b) Available Amount. Permit the aggregate principal amount of all
outstanding Advances at any time to exceed the Borrowing Base Loan Amount.
(c) Distributions. Make any dividend or distribution in respect of its
partnership interests at any time during which a Default hereunder remains
uncured or if a Default or Event Default exists hereunder or has existed during
the previous two (2) calendar quarters, and otherwise except as set forth in the
organizational documents.
47
(d) Organizational Documents. Amend, modify or supplement any of its
organizational documents, without the prior written consent of Agent, which
consent shall not be unreasonably withheld, conditioned or delayed.
(e) Subsidiaries. Notwithstanding anything herein to the contrary, in no
event shall Borrower be permitted to transfer any portion of the Collateral Pool
owned by Borrower to any Subsidiary (other than an Executing Subsidiary) without
the prior written consent of Agent, which may be withheld in its sole
discretion.
(f) Sales, Transfers. Sell, transfer or enter into any agreement for the
sale or transfer of any of the Mortgaged Properties except for transfers to
Borrower or any member of Borrower and except for sales or transfers made in
connection with the release of a Mortgaged Property from the Liens created
hereby and by the other Loan Documents in accordance with the terms of Article
IX hereof.
(g) Liens. Create, incur, assume, or suffer to exist any Lien on any
Mortgaged Property to secure any Indebtedness of Borrower or any other Person,
other than Permitted Encumbrances.
(h) Mergers, Sales, Etc. (i) Merge into or consolidate with any other
Person, or sell, lease, or otherwise dispose of all or any substantial part of
its property or assets to any other Person; (ii) sell, assign, hypothecate,
pledge, encumber, finance, transfer, or otherwise dispose of any or all of its
interest in any Mortgaged Property without the prior written consent of Agent;
or (iii) sell, assign, hypothecate, pledge, encumber, finance, transfer or
otherwise dispose of more than forty-nine percent (49%) of the stock,
partnership units or beneficial ownership interests in Borrower or General
Partner in one or a series of related transactions, in each case other than to a
Person who is a member or general partner of Borrower on the effective date of
the transaction in question; provided, however, if at any time Borrower enters
into any other mortgages or loan transactions which contain a provision
restricting the sale, assignment, hypothecation, pledge, encumbrance, financing,
transfer or other disposition of the stock, partnership units or beneficial
ownership interests in Borrower in one or a series of related transactions that
is more restrictive than the restriction set forth in this subclause (iii), then
the most restrictive provision in any other mortgage or loan transaction entered
into by Borrower regarding the sale, assignment, hypothecation, pledge,
encumbrance, financing, transfer or other disposition of the stock, partnership
units or beneficial ownership interests in Borrower in one or a series of
related transactions shall be deemed to be incorporated into this Agreement as
and for the restriction set forth in this subclause (iii) as if set forth fully
herein.
(i) Changes in Property or Business. Except with the prior written consent
of Agent:
(i) Make or allow any material change to be made in the nature of
the use of any Mortgaged Property, or any part thereof from that in effect on
the date hereof or the date acquired, as the case may be; or
(ii) Initiate or acquiesce in any change in any Use Requirements now
or hereafter in effect and affecting any Mortgaged Property or any part thereof.
48
(j) Transactions with Affiliates. In the event any Executing Subsidiary
acquires a Mortgaged Property from an Affiliate of the Borrower or Guarantors,
the Acquisition Costs for such Mortgaged Property shall be no greater than the
Acquisition Costs paid by such Affiliate to a third party seller for such
Mortgaged Property.
(k) Confidentiality. Borrower shall not disclose the terms of this
Agreement or the other Loan Documents to any Person except as may be required by
law, GAAP or to lawyers, accountants, advisors or consultants of Borrower on a
need to know basis. Without limitation to the foregoing, Borrower agrees not to
allow a copy of this Agreement or the other Loan Documents to be filed with the
Securities and Exchange Commission except as may be required by law.
(l) Use of Proceeds. Use the proceeds of the Advances for other than
Permitted Purposes.
(m) Nature of Business. Make any material change in the nature or scope of
its business, and, in the case of each Executing Subsidiary, own any real
property which does not constitute a Mortgaged Property.
(n) Hazardous Materials.
(i) Use or permit or suffer use of any Mortgaged Property or any
part thereof or any interest therein or conduct any activity or operations
thereon in any manner which:
(A) would involve or result in the occurrence or presence of
or exposure to Hazardous Materials at, upon, under, across or within
any Mortgaged Property or any part thereof not in the ordinary
course of operation;
(B) would violate any Relevant Environmental Laws; or
(C) would result in the occurrence of any Environmental
Discharge.
(ii) Install or suffer or permit installation or Presence on, in or
under any Mortgaged Property or any part thereof of any underground or
above-ground containers for the storage of fuel oil, gasoline or other petroleum
products or by-products, except (i) such above-ground containers that are
required for the operation of the Mortgaged Property and that are at all times
in compliance with all Relevant Environmental Laws and any other applicable
Requirements of Law and (ii) such underground containers that are required for
the operation of the Mortgaged Property and are at all times in compliance with
all Relevant Environmental Laws and any other applicable Requirements of Law.
(iii) Transfer or permit or suffer any transfer of any Mortgaged
Property or any part thereof or any interest therein or of the interest of any
tenant or lessee under any Lease, or of any Person entitled to operate or manage
the Mortgaged Property unless such transfer is made in substantial compliance
with all Requirements of Law.
(o) Leases. (i) Enter into, terminate or modify any Major Lease without
the prior written consent of Agent.
49
(ii) Release the liability of any tenant under any Lease, (2)
consent to any tenant's withholding of rent or making monetary advances and
off-setting the same against future rentals, (3) consent to any tenant's claim
of a total or partial eviction, (4) consent to a tenant termination or
cancellation of any Major Lease, except as specifically provided therein, or (5)
enter into any oral leases with respect to all or any portion of the Premises;
(iii) Make any other assignment of its entire or any part of its
interest in or to any or all Leases, or any or all rents, issues, income or
profits assigned hereunder, except as specifically permitted by the Loan
Documents;
(iv) Accept a surrender of any Lease or convey or transfer, or
suffer or permit a conveyance or transfer, of the premises demised under any
Lease or of any interest in any Lease so as to effect, directly or indirectly,
proximately or remotely, a merger of the estates and rights of, or a termination
or diminution of the obligations of, any tenant thereunder; any termination fees
payable under a Lease for the early termination or surrender thereof shall be
paid jointly to the applicable Executing Subsidiary and the Lenders;
(v) Alter, modify or change the terms of any guaranty of any Lease,
or cancel or terminate any such guaranty or do or permit to be done anything
which would terminate any such guaranty as a matter of law;
(vi) Waive or excuse the obligation to pay rent under any Lease in
excess of $10,000 in any Lease and $50,000 in the aggregate;
(vii) Permit any of the Leases to become subordinate to any lien or
liens other than liens securing the Indebtedness or liens for general real
estate taxes not delinquent; or
(viii) Execute hereafter any Lease unless there shall be included
therein a provision providing that the tenant thereunder acknowledges that such
Lease has been assigned pursuant to an Assignment of Leases and Rents and agrees
not to look to Lenders as mortgagee, mortgagee in possession or successor in
title to the Mortgaged Property for accountability for any security deposit
required by lessor under such Lease unless such sums have actually been received
in cash by Lenders as security for tenant's performance under such Lease;
(p) Senior Management. Permit any change in the Persons at the level of
President and/or Chief Operating Officer without the prior written consent of
Agent, which such consent shall not be unreasonably withheld.
SECTION 5.4. CASUALTY. Borrower agrees that if at any time prior to the
repayment in full of the Advances and the termination of the Commitment
(including, but not limited to, at any time, prior to or after an Event of
Default) any Mortgaged Property is damaged by fire, earthquake or other casualty
in such a manner so that it is unlikely, in Agent's judgment, that such
Mortgaged Property will be restored on or prior to the date which is six (6)
months prior to the Maturity Date to the same physical, leased and operating
condition as it exists prior to such casualty, Borrower shall, within twenty
(20) days of Agent's written request, direct that the insurance proceeds from
the casualty be delivered over to Agent, to be applied by Agent to repayment of
the Advance or Borrower's other obligations under this Agreement and the other
Loan Documents.
50
ARTICLE VI.
EVENTS OF DEFAULT
SECTION 6.1. EVENTS OF DEFAULT. The occurrence and continuance of any of the
following specified events shall constitute an "EVENT OF DEFAULT":
(a) Payments. Borrower shall fail to pay (i) within five (5) days after
the due date thereof, any principal of the Advances hereunder (including,
without limitation, by mandatory prepayment), provided, however, that such five
(5) day period shall not operate to extend the Maturity Date, (ii) within five
(5) days after the due date thereof, any interest on any of the Advances
(including, without limitation, by mandatory prepayment) or (iii) within five
(5) days after notice from Agent, any fees or any other amount payable hereunder
or under the other Loan Documents.
(b) Specified Covenants. Borrower shall fail to observe or perform any of
the covenants contained in Sections 5.1(n) and (o) hereof (collectively, the
"SPECIFIED COVENANTS") and shall thereafter fail to remedy the same within ten
(10) Business Days of the occurrence thereof by prepaying Advances in accordance
with the terms of Section 2.8 hereof in amounts sufficient to render Borrower in
compliance with the Specified Covenants, provided that the foregoing provisions
of this Section shall in no event be deemed to permit Borrower to prepay
Advances except in strict accordance with the terms of Section 2.8 hereof.
(c) Negative Covenants. Borrower shall fail to observe any of the
covenants specified in Section 5.3(a) through (p).
(d) Other Covenants. Borrower shall fail to observe or perform any
covenant or agreement (other than those referred to in Sections 6. l(a), (b) and
(c)) and such failure shall remain unremedied (i) in the case of covenants or
agreements contained in Section 5.2(a) through (e) of this Agreement, for ten
(10) Business Days after the occurrence thereof; or (ii) in all other cases, for
thirty (30) days after notice from Agent. In the event that a breach of a
covenant described in clause (ii) above cannot be cured within thirty (30) days
after notice thereof and Borrower has during such 30-day period commenced to
cure such breach and thereafter diligently pursues all necessary efforts to
effect a cure, an Event of Default shall be deemed only to have occurred if the
breach either cannot be remedied, or remains unremedied, for sixty (60) days
after the occurrence thereof.
(e) Representations. Any representation, warranty, or statement made or
deemed to be made by Borrower or any of their officers under or in connection
with this Agreement shall have been incorrect in any material respect as of the
date hereof, or as of the date deemed to have been made.
(f) Defaults Under Loan Documents. Borrower shall fail to observe or
perform any covenant or agreement contained in any Loan Document, or any default
shall occur and be continuing thereunder after any notice and lapse of
applicable cure periods under such Loan Document.
51
(g) Bankruptcy. Borrower, an Executing Subsidiary or a Guarantor shall
commence a voluntary case concerning itself under Title 11 of the United States
Code entitled "Bankruptcy" as now or hereafter in effect, or any successor
thereto (the "BANKRUPTCY CODE"); or an involuntary case is commenced against any
of the foregoing entities and the petition is not dismissed within ninety (90)
days after commencement of the case; or a custodian (as defined in the
Bankruptcy Code) is appointed for, or takes charge of, all or any substantial
part of the property of any of the foregoing entities; or any of the foregoing
entities commences any other proceeding under any reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency, or liquidation
or similar law of any jurisdiction whether now or hereafter in effect relating
to any of the foregoing entities or there is commenced against any of the
foregoing entities any such proceeding which remains undismissed for a period of
ninety (90) days; or any of the foregoing entities is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or any of the foregoing entities suffers any appointment
of any custodian or the like for it or any substantial part of its property to
continue undischarged or unstayed for a period of ninety (90) days; or any of
the foregoing entities makes a general assignment for the benefit of creditors;
or any of the foregoing entities shall fail to pay, or shall state that it is
unable to pay, or shall be unable to pay, its debts generally as they become
due; or any of the foregoing entities shall call a meeting of its creditors with
a view to arranging a composition or adjustment of its debts; or any of the
foregoing entities shall by any act or failure to act indicate its consent to,
approval of, or acquiescence in any of the foregoing; or any action is taken by
any of the foregoing entities for the purpose of effecting any of the foregoing;
or any of the foregoing.
(h) Money Judgment. A judgment or order for the payment of money in excess
of the greater of (x) $250,000 or (y) 0.75% of the Total Assets shall be
rendered against Borrower and such judgment or order shall continue unsatisfied
(in the case of a money judgment) and in effect for a period of thirty (30) days
during which execution shall not be effectively stayed or deferred (whether by
action of a court, by agreement, or otherwise) (or, if such judgment is covered
by insurance, such longer period during which Borrower is appealing or otherwise
contesting such judgment in good faith).
(i) Material Adverse Change. Any Material Adverse Change shall occur.
SECTION 6.2. GLOBAL REMEDIES. Upon the occurrence and continuation of an Event
of Default, and at any time thereafter, if any Event of Default shall then be
continuing, Agent may, by written notice to Borrower, take any or all of the
following actions, without prejudice to the rights of the Lenders to enforce its
claims against Borrower: (i) declare the Commitment terminated, whereupon the
Commitment shall terminate immediately; (ii) declare all or any portion of the
principal of and any accrued interest on the Advances and all other obligations
owing hereunder and under the other Loan Documents, to be, whereupon the same
shall become, forthwith due and payable without presentment, demand, protest, or
other notice of any kind, all of which are hereby waived by Borrower; (ii)
foreclose on any portion of the Collateral Pool concurrently or in such order as
Agent may from time to time see fit; or (iv) take any action permitted under any
Loan Document; provided, that, if any Event of Default specified in Section 6.1
(g) shall occur, the result which would occur upon the giving of written notice
by Agent to Borrower, as specified in clauses (i) and (ii) above, shall occur
automatically without the giving of any such notice.
52
SECTION 6.3. MARSHALING; WAIVER OF CERTAIN RIGHTS; RECAPTURE. Neither Agent nor
the Lenders shall be under any obligation to marshal any assets in favor of
Borrower or any other party or against or in payment of any or all of the
obligations of such parties. To the extent permitted by law, Borrower waives and
renounces the benefit of all valuation, appraisement, homestead, exemption,
stay, redemption, and moratorium rights under or by virtue of the constitution
and laws of the state in which the Mortgaged Properties are located and of any
other state or of the United States, now existing or hereafter enacted. To the
extent Agent or any Lender receives any payment by or on behalf of Borrower,
which payment or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to Borrower or
its estate, trustee, receiver, custodian, or any other party under any
bankruptcy law, state or federal law, common law, or equitable cause, then to
the extent of such payment or repayment, the obligation or part thereof which
has been paid, reduced, or satisfied by the amount so repaid shall be reinstated
by the amount so repaid and shall be included within the liabilities of Borrower
to such party as of the date such initial payment, reduction, or satisfaction
occurred, together with interest at the Default Rate. Borrower agrees that (i)
Agent on behalf of the Lenders shall have the right to pursue all of its rights
and remedies in one proceeding, or separately and independently in separate
proceedings from time to time, as Agent, in its sole and absolute discretion,
shall determine from time to time, (ii) the Collateral Pool may be sold at such
proceeding or proceedings in one or more sales and in such portions or
combinations as Agent, in its sole and absolute discretion, shall determine,
(iii) Agent, on behalf of the Lenders, shall not be required to marshal assets,
sell any portion of the Collateral Pool in any inverse order of alienation, or
be subject to any "one action" or "election of remedies" law or rule, (iv) the
exercise by the Lenders of any remedies against any one item of the Collateral
Pool will not impede the Lenders from subsequently or simultaneously exercising
remedies against any other item of the Collateral Pool, and (v) all Liens and
other rights, remedies, or privileges provided to Agent and the Lenders under
this Agreement and the other Loan Documents shall remain in full force and
effect until Agent and the Lenders have exhausted all of their remedies against
the Collateral Pool and all of the Collateral Pool has been foreclosed, sold or
otherwise realized upon in satisfaction of the Promissory Notes and the other
obligations of Borrower to Agent and the Lenders. Each Lender and its officers,
directors, shareholders, employees, counsel and agents shall not incur any
liability as a result of the sale of the Collateral Pool, or any part thereof,
in accordance with the provisions of this Agreement or any Loan Document, or for
the failure to sell or offer for sale the Collateral Pool, or any part thereof,
for any reason whatsoever. Borrower waives any claims against each Lender and
its officers, directors, shareholders, employees, counsel and agents arising
with respect to the price at which the Collateral Pool, or any part thereof, may
have been sold by reason of the fact that such price was less than the aggregate
amount of the indebtedness due under the Promissory Notes, this Agreement and
the other Loan Documents.
SECTION 6.4. APPLICATION OF PROCEEDS.
(a) All proceeds received by Agent or the Lenders in respect of the
repayment of any sums due hereunder or in connection with a foreclosure sale of
all or any portion of the Collateral Pool after the occurrence of an Event of
Default shall be applied: first, to the costs of enforcement of the Lenders'
rights hereunder and under the other Loan Documents; second, to any unpaid fees
payable under this Agreement and the other Loan Documents in such order of
priority as Agent, in its sole and absolute discretion, shall determine but
subject to the rights of
53
the Lenders; third, to any accrued and unpaid interest (including all interest
owing at the Default Rate) on Advances made hereunder; fourth, to the principal
amount of the Advances; and fifth, if any excess proceeds exist, to Borrower or
any party entitled thereto as a matter of law.
(b) Agent shall have the right, but not the obligation, to deposit any
proceeds in its possession which are available under clause (v) of Section
6.4(a) above into a court of competent jurisdiction for determination by such
court of the disposition of such excess proceeds and upon such deposit, Agent
shall have no further liability with respect to such proceeds. All costs and
expenses of Agent in connection with such action may be deducted or charged by
Agent against such excess proceeds and shall otherwise be reimbursed by Borrower
upon demand. Agent shall have the right, but not the obligation, to request and
rely on the instructions of Borrower in connection with the disposition of any
such excess proceeds and, upon compliance with such instructions, shall have no
further liability with respect to such proceeds.
SECTION 6.5. ATTORNEYS-IN-FACT. Borrower hereby makes, constitutes and appoints
Agent, and its agents and designees, the true and lawful agents and
attorneys-in-fact of Borrower, with full power of substitution, to take any or
all of the following actions during the continuance of an Event of Default: (i)
to receive, open and dispose of all mail addressed to Borrower relating to the
Collateral Pool, (ii) to notify and direct the United States Post Office
authorities by notice given in the name of Borrower and signed on its behalf, to
change the address for delivery of all mail addressed to Borrower relating to
the Collateral Pool to an address to be designated by Agent, and to cause such
mail to be delivered to such designated address where Agent may open all such
mail and remove therefrom any notes, checks, acceptances, drafts, money orders
or other instruments in payment of the Collateral Pool in which Agent has a
security interest hereunder and any documents relative thereto, with full power
to endorse the name of Borrower upon any such notes, checks, acceptances,
drafts, money orders or other form of payment or on the Collateral Pool or
security of any kind and to effect the deposit and collection thereof, and Agent
shall have the further right and power to endorse the name of Borrower on any
documents otherwise relating to such Collateral Pool, and (iii) to do any and
all other things necessary or proper to carry out the intent of this Agreement
and to perfect and protect the Liens and rights of Agent created under this
Agreement, including, without limitation, to claim, bring suit, settle or adjust
any insurance proceeds claims relating to the Collateral Pool. Borrower agrees
that neither the Lenders nor any of their officers, directors, shareholders,
employees, counsel, agents, designees or attorneys-in-fact will be liable for
any acts of commission or omission, or for any error of judgment or mistake of
fact or law, except for any acts of gross negligence or willful misconduct. The
powers granted hereunder are coupled with an interest and shall be irrevocable
during the term hereof.
SECTION 6.6. ACTIONS IN RESPECT OF LETTERS OF CREDIT.
(a) If, at any time and from time to time, any Letter of Credit shall have
been issued hereunder and an Event of Default shall have occurred and be
continuing, then, upon the occurrence and during the continuation thereof, Agent
may, whether in addition to the taking by Agent of any of the actions described
in this Article 6 or otherwise, make a demand upon Borrower to, and forthwith
upon such demand (but in any event within ten (10) days after such demand),
Borrower shall, pay to Agent, in same day funds, an amount equal to the amount
of the Letter of Credit Usage under the Letters of Credit, for deposit in a
special cash collateral account
54
(the "LETTER OF CREDIT COLLATERAL ACCOUNT") to be maintained in the name of
Agent, for the benefit of the Lenders, under Agent's sole dominion and control,
and at such place as shall be designated by the Agent.
(b) Borrower hereby pledges, assigns and grants to Agent, for its benefit
and the benefit of the Lenders, a lien on and a security interest in, the
following collateral (the "LETTER OF CREDIT COLLATERAL"):
(i) the Letter of Credit Collateral Account, all cash deposited
therein and all certificates and instruments, if any, from time to time
representing or evidencing the Letter of Credit Collateral Account;
(ii) all notes, certificates of deposit and other instruments from
time to time hereafter delivered to or otherwise possessed by Agent or the
Lenders for or on behalf of Borrower in substitution for or in respect of any or
all of the then existing Letter of Credit Collateral;
(iii) all interest, dividends, cash, instruments and other property
from time to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of the then existing Letter of Credit Collateral; and
(iv) to the extent not covered by the above clauses, all proceeds of
any or all of the foregoing Letter of Credit Collateral.
The lien and security interest granted hereby secures the payment of all
obligations of Borrower now or hereafter existing hereunder and under any other
Loan Document.
(c) Borrower hereby authorizes Agent to apply, from time to time after
funds are deposited in the Letter of Credit Collateral Account, funds then held
in the Letter of Credit Collateral Account to the payment of any amounts, in
such order as Agent may elect, as shall have become due and payable by Borrower
to Agent in respect of the Letters of Credit.
(d) Neither Borrower nor any Person claiming or acting on behalf of or
through the Borrower shall have any right to withdraw any of the funds held in
the Letter of Credit Collateral Account, except as provided in Section 6.6(h)
hereof.
(e) Borrower agrees that it will not (i) sell or otherwise dispose of any
interest in the Letter of Credit Collateral or (ii) create or permit to exist
any lien, security interest or other charge or encumbrance upon or with respect
to any of the Letter of Credit Collateral, except for the security interest
created by this Section 6.6.
(f) If any Event of Default shall have occurred and be continuing:
(i) Agent may, in its sole discretion, without notice to Borrower
except as required by law and at any time from time to time, charge, set off or
otherwise apply all or any part of first, (x) amounts previously drawn on any
Letter of Credit that have not previously been reimbursed by the Borrower and
(y) any Letter of Credit Usage described in clause (ii) of the definition
thereof that are then due and payable and second, any other unpaid Advances then
due
55
and payable against the Letter of Credit Collateral Account or any part thereof,
in such order as the Lender shall elect.
(ii) Agent may also exercise, in its sole discretion, in respect of
the Letter of Credit Collateral Account, in addition to the other rights and
remedies provided herein or otherwise available to it, all the rights and
remedies of a secured party upon default under the UCC in effect at that time.
(g) Agent shall be deemed to have exercised reasonable care in the custody
and preservation of the Letter of Credit Collateral if the Letter of Credit
Collateral is accorded treatment substantially equal to that which Agent accords
its own property, it being understood that, assuming such treatment, Agent shall
not have any responsibility or liability with respect thereto.
(h) At such time as all Events of Default have been cured or waived in
writing, all amounts remaining in the Letter of Credit Collateral Account shall
be promptly returned to the Borrower. Absent such cure or written waiver, any
surplus of the funds held in the Letter of Credit Collateral Account and
remaining after payment in full of all of the outstanding Advances and Letters
of Credit hereunder and under any other Loan Document after the Maturity Date
shall be paid to Borrower or to whomsoever may be lawfully entitled to receive
such surplus.
ARTICLE VII.
AGENCY AND INTERCREDITOR
SECTION 7.1. APPOINTMENT. Each Lender hereby irrevocably designates and appoints
LaSalle Bank National Association, as Agent of such Lender under the Loan
Documents, and each such Lender irrevocably authorizes LaSalle Bank National
Association, to act as Agent for such Lender, to take such action on its behalf
under the provisions of this Agreement and the Loan Documents and to exercise
such powers and perform such duties as are expressly delegated to Agent by the
terms of this Agreement and the Loan Documents, together with such other powers
as are reasonably incidental thereto. Agent shall not have any duties or
responsibilities, except those expressly set forth in this Agreement and the
Loan Documents, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities on
the part of Agent shall be read into any of the Loan Documents or otherwise
exist against Agent. The provisions of this Article are solely for the benefit
of Agent and the Lenders, and Borrower shall not have any rights as a third
party beneficiary or otherwise under any of the provisions of this Article VII.
In performing its functions and duties under the Loan Documents, Agent shall act
solely as Agent or the Lenders and does not assume nor shall Agent be deemed to
have assumed any obligation or relationship of trust or agency with or for
Borrower or any of such party's respective successors and assigns.
SECTION 7.2. DELEGATION OF DUTIES. Agent may execute any of its duties under the
Loan Documents by or through agents or attorneys-in-fact and shall be entitled
to advice of counsel (including its internal counsel) concerning all matters
pertaining to such duties. Agent shall not
56
be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
SECTION 7.3. EXCULPATORY PROVISIONS. Agent shall not be (a) liable for any
action lawfully taken or omitted to be taken by it or any Person described in
Section 7.2 under or in connection with any Loan Document (except for those
actions arising from Agent's own gross negligence or willful misconduct), or (b)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by Borrower contained in any Loan Document,
or by Borrower in any certificate, report, statement or other document referred
to or provided for in, or received under or in connection with any Loan Document
or for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of any Loan Document or any such certificate, report, statement or
other document, or for any failure of Borrower, or any Lender to perform or
observe its respective obligations hereunder or thereunder. Unless Agent shall
have been requested in writing to do so by a Lender on such Lender's behalf,
Agent shall not be under any obligation to any Lender to ascertain or to inquire
as to the observance or performance of any of the agreements contained in, or
conditions of any Loan Document, or to inspect the properties, or the books or
records of Borrower. This Section 7.3 is intended to govern solely the
relationship between Agent, on the one hand, and the Lenders, on the other.
SECTION 7.4. RELIANCE BY AGENT. Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation (including by
telephone) believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, its internal counsel and counsel
to Borrower), independent accountants and other experts selected by Agent. Agent
shall be fully justified in failing or refusing to take any action under any
Loan Document unless it shall first receive such advice or concurrence of the
Lenders required pursuant to this Agreement or it shall first be indemnified to
its satisfaction by the Lenders against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
SECTION 7.5. NOTICE OF DEFAULT AND OTHER NOTICES FROM BORROWER.
(a) Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default unless (i) Agent has received
written notice from a Lender or Borrower referring to this Agreement, describing
such Default or Event of Default and stating that such notice is a "notice of
default," or (ii) Agent, in its capacity as a Lender, has actual knowledge of
such Default or Event of Default. In the event that Agent receives such a
notice, Agent shall promptly give notice thereof to the Lenders. Agent shall
take such action with respect to such Default or Event of Default as shall be
directed by the Required Lenders; provided that unless and until Agent shall
have received such directions, Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as Agent shall deem advisable and in the best interests of the
Lenders.
(b) Each Lender agrees that it shall promptly notify Agent in writing
after it first has knowledge of any Default or Event of Default or of any matter
which in such Lender's judgment
57
adversely affects any Lender's respective interests in the Commitment, which
notice will describe the Default or Event of Default or matter in reasonable
detail. Agent shall give a copy of any such notice received by Agent to the
other Lenders if such notice pertains to a Decision by the Lenders pursuant to
Sections 7.14 or 7.15 hereof.
(c) Agent shall distribute to the Lenders copies of material notices and
information furnished by the Borrower to Agent in accordance with the terms of
this Agreement, which may be distributed by posting on Intralinks or other
customary distribution methods.
SECTION 7.6. NON-RELIANCE ON AGENT AND THE OTHER LENDERS. Each Lender expressly
acknowledges that neither Agent, nor any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates, has made any representations or
warranties to it and that no act by Agent hereafter taken, including, without
limitation, any review of the affairs of Borrower shall be deemed to constitute
any representation or warranty by Agent. Each Lender represents and warrants to
Agent that it has, independently and without reliance upon Agent or any other
Lender and based on such documents and information as it has deemed appropriate,
(a) made its own appraisal of and investigation into the business, operations,
property, prospects, financial and other condition, creditworthiness and
solvency of Borrower, (b) satisfied itself as to the due execution, legality,
validity, enforceability, genuineness, sufficiency and value of all of the Loan
Documents and all other instruments and documents furnished pursuant to any Loan
Document, and (c) made its own decision as to its Percentage of the Commitment
pursuant to this Agreement. Each Lender also represents that it will,
independently and without reliance upon Agent or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analyses, appraisals and decisions in taking or
not taking action under this Agreement, and to make such investigation as it
deems necessary to inform itself as to the business, operations, property,
prospects, financial and other condition and creditworthiness of Borrower.
Except for notices, reports and other documents expressly required pursuant to
the Loan Documents to be furnished by Agent to the Lenders, Agent shall not have
any duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, prospects, financial
and other condition or creditworthiness of Borrower which may come into the
possession of Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.
SECTION 7.7. INDEMNIFICATION. The Lenders agree to indemnify Agent (in its
capacity as such) and its officers, directors, employees, representatives and
agents (to the extent not reimbursed by Borrower and without limiting the
obligation, if any, of Borrower to do so), ratably in accordance with their
Percentages, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever (including, without limitation, the fees and
disbursements of counsel for Agent or such Person in connection with any
investigative, administrative or judicial proceeding commenced or threatened,
whether or not Agent or such Person shall be designated a party thereto) that
may at any time be imposed on, incurred by or asserted against Agent or such
Person as a result of, or arising out of, or in any way related to or by reason
of, any of the transactions contemplated by the Loan Documents or the execution,
delivery or performance of any Loan Document (but excluding any such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from the gross negligence or
willful misconduct of Agent or such Person as determined by a court of competent
58
jurisdiction). The agreements in this subsection shall survive the payment of
the Promissory Notes and all other amounts payable hereunder.
SECTION 7.8. AGENT IN ITS INDIVIDUAL CAPACITY. LaSalle Bank National Association
and its affiliates may make loans to, accept deposits from and generally engage
in any kind of business with Borrower as though it were not Agent hereunder.
With respect to Advances made or renewed by it and any Promissory Note issued to
it, Agent shall have the same rights and powers under this Agreement as any
Lender and may exercise the same as though it were not Agent.
SECTION 7.9. AGENT'S RESIGNATION OR REMOVAL. Agent may resign at any time by
giving notice thereof to the Lenders and Borrower. In addition, the Agent may be
removed at any time with good cause by written notice received by the Agent from
the Required Lenders, such removal to be effective on the date specified by the
Required Lenders. Upon any such resignation or removal, the Required Lenders
shall designate in writing another Person as the successor Agent. If such
proposed successor Agent agrees in writing to act as Agent in accordance with
the terms hereof, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges, duties and obligations of the
resigning or removed Agent, and the resigning or removed Agent shall be
discharged from its duties and obligations as Agent under this Agreement. After
any retiring Agent's resignation or removal hereunder, the provisions of this
Article VII shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement.
SECTION 7.10. APPOINTMENT OF A SUBSTITUTE AGENT. Subject to the provisions of
Section 7.9 above, LaSalle Bank National Association shall be Agent under this
Agreement and the Loan Documents until the Loan Documents have been terminated
and the Lenders have been paid in full. In the event that LaSalle Bank National
Association has a conflict which requires that it not act as Agent in connection
with certain matters as to which LaSalle Bank National Association deems a
conflict of interest exists, LaSalle Bank National Association may, at its
option and upon thirty (30) days' prior written notice to Borrower and the
Lenders, request a substitute Agent be selected in accordance with the terms of
this Section to act as Agent with respect to such matters. LaSalle Bank National
Association shall request a substitute Agent in accordance with the terms of
this Section in the event that LaSalle Bank National Association has sold its
entire interest in the Commitment to a Purchasing Lender (as hereafter defined).
Within fifteen (15) days after receipt of such notice, the Required Lenders
shall select a proposed substitute agent and shall notify Borrower of the
identity of such proposed substitute agent. After any retiring substitute
Agent's resignation hereunder as substitute Agent, the provisions of this
Section 7.10 and Section 8.4 hereof shall inure to the benefit of such retired
substitute Agent as to any actions taken or omitted to be taken by it while it
was substitute Agent under this Agreement.
SECTION 7.11. LOANS. Each Lender shall make available to Borrower such Lender's
portion of the Commitment subject to and in accordance with the provisions of
the Loan Documents. Borrower shall look solely to each Lender for the
performance of such Lender's obligations, covenants and agreements under the
Loan Documents on the part of each Lender to be performed or observed with
respect to each such portion of the Commitment, subject to and upon the
conditions, limitations and restrictions set forth herein and in the other Loan
Documents, as evidenced by the signature of each such party hereto. In the event
any Lender has not made
59
available its Percentage of any Advance or Letter of Credit draw, Agent may (but
shall not be obligated to), and each Lender authorizes Agent to, advance for
such Lender's account, pursuant to the terms hereof, the amount of the Advance
or Letter of Credit draw to be made by such Lender and each Lender agrees to
reimburse Agent in immediately available funds for any amount so advanced on its
behalf. If any such reimbursement is not made in immediately available funds on
the same day on which Agent shall have made such amount available on behalf of
any Lender, such Lender shall also pay interest thereon to Agent at the Federal
Funds Rate. In the event that Agent advances a Lender's Percentage of any
Advance or Letter of Credit draw pursuant to the terms of this Section 7.11 and
such Lender fails to reimburse Agent, Borrower shall repay such amounts to
Agent, together with interest thereon at the Default Rate until so repaid.
SECTION 7.12. PRIORITY OF LOANS. Each Lenders portion of the Commitment shall be
of equal priority with each other Lender's portion of the Commitment, and no
portion of the Commitment shall have priority or preference over any other
portion of the Commitment or the security therefor.
SECTION 7.13. BOOKS AND RECORDS. Agent will keep customary books and records
relating to the Advances, and such books and records shall be available at
Agent's office for the Lenders' reasonable inspection during Agent's normal
business hours.
SECTION 7.14. DECISIONS OF THE LENDERS. (a) Except as expressly set forth in
Sections 7.15 and 7.16 hereof, all decisions, consents, waivers, approvals and
other actions (collectively, "DECISIONS") authorized to be taken under or in
connection with this Agreement and the other Loan Documents by any Lender shall
be taken by Agent in its discretion reasonably exercised, subject to the
provisions of Section 7.4 hereof. Except as expressly provided in Sections 7.15
and 7.16 hereof, Agent (i) may consent or withhold consent to any action by
Borrower, (ii) may exercise or refrain from exercising any power, rights or
remedies hereunder or under the other Loan Documents or otherwise in respect of
the Advances, and/or (iii) may waive any conditions in any Loan Documents, so
long as such consent, exercise or waiver would not, in Agent's judgment
reasonably exercised, represent a departure from the standards followed by Agent
in the administration of loans held by Agent entirely for its own account. Agent
may request a Decision with respect to matters described in Sections 7.15 and
7.16 hereof at any time by making a request for such Decision in writing to all
of the Lenders. Any such request (x) shall contain an adequate description
together with relevant background information of the Decision being requested,
(y) shall specify the reasons for such request, and (z) shall state the effect
of not responding to such notice as set forth in this Section 7.15. Agent will
provide the Lenders with such additional information as the Lenders may
reasonably request to assist such Lenders in reaching a Decision, to the extent
such information is in Agent's possession or under its control. The requested
Decision shall be deemed approved by the Lenders if and when Agent receives
written approval from the required percentage of the Lenders as specified in
Sections 7.15 and 7.16 hereof, as the case may be. If a Lender does not deliver
to Agent a written objection thereto within ten (10) Business Days after hand
delivery, mailing or delivery to an express courier service of the request by
Agent, such Lender shall be deemed to have approved the requested Decision. If
Agent is unable to contact the usual representatives of a Lender for any reason,
Agent will make a good faith effort to contact other representatives of such
Lender as necessary to reach a Decision within the allotted time. To the extent
that Agent reasonably deems
60
necessary, any such Decision may also be requested telephonically by Agent from
each Lender with such telephonic request to be confirmed in writing by Agent.
Any Decision as to which Agent has made telephonic requests for approval shall
be deemed approved by the Lenders after Agent has received the written approval
of the required percentage of the Lenders as specified in Sections 7.15 and 7.16
hereof. Borrower shall be promptly notified of the Decision, if such Decision
was made in response to a request by Borrower.
SECTION 7.15. UNANIMOUS APPROVALS BY THE LEADERS. No written amendment,
supplement, modification or waiver which adds, deletes, changes or waives any
provisions of the Loan Documents shall (a), without the prior approval of all
Lenders, (i) extend either the Maturity Date or any installment or required
prepayment of any Advances; (ii) reduce the rate or extend the time of payment
of interest on any Advances; (iii) reduce the principal amount of any Advances;
(iv) reduce the fees payable under this Agreement and the other Loan Documents,
or any other fee payable to the Lenders; (v) subject to the terms and conditions
of Section 2.20, change any Lender's portion of the Commitment or the amount of
any Advance of any Lender; or (vi) change any provision of this Section 7.15 or
the definition of Required Lenders; or (b) amend, modify or waive any provision
of any Loan Document, if the effect thereof is to affect the rights or duties of
Agent, without the written consent of the then Agent. Any such amendment,
supplement, modification or waiver shall apply to each of the Lenders equally
and shall be binding upon Borrower, the Lenders, Agent and all future holders of
the Promissory Notes. In the case of any waiver, Borrower, the Lenders and Agent
shall be restored to their former position and rights hereunder and under the
outstanding Promissory Notes, and any Default or Event of Default waived shall
be deemed to be cured and not continuing, but no such waiver shall extend to any
subsequent or other Default or Event of Default, or impair any right consequent
thereon.
SECTION 7.16. APPROVALS BY THE REQUIRED LENDERS.
(a) Upon Agent's receipt of a notice of default (as defined in Section
7.5(a) hereof) with respect to an Event of Default, Agent shall consult with the
Lenders in respect of any such Event of Default to determine a course of action
which is acceptable to the Required Lenders. Subject to Section 7.15 hereof,
Agent shall pursue any such course of action approved by the Required Lenders in
respect of any such Event of Default, including, without limitation,
acceleration of the Advances. In the event that the Required Lenders cannot
decide which remedies, if any, are to be pursued, Agent may commence proceedings
on behalf of the Lenders; provided, however, that if at any time thereafter the
Required Lenders shall direct that a different or additional remedial action
shall be taken, such different or additional remedial action shall be taken in
lieu of or in addition to such proceedings.
(b) Agent shall not, without the prior approval of the Required Lenders,
(i) enter into written amendments, supplements, modifications or waivers for the
purpose of adding, deleting, changing or waiving any of the provisions of
Article V or Section 6.1, except to the extent such amendment, supplement,
modification or waiver requires the unanimous consent of the Lenders pursuant to
Section 7.15 hereof, or (ii) enter into written amendments, supplements,
modifications or waivers for the purpose of adding, deleting, changing or
waiving any provision of the Loan Documents, except to the extent such
amendment, supplement, modification or waiver requires the unanimous consent of
the Lenders (pursuant to Section 7.15 hereof), or
61
(iii) consent to, approve, or waive the requirement of receipt of, any
documents, certificates or other agreements or statements delivered or to be
delivered by Borrower or any other Person pursuant to Article III hereof or (iv)
consent to or permit (if not expressly permitted under the Loan Documents) the
assignment or transfer by Borrower of any of its rights and obligations under
any Loan Document, consent to any merger or consolidation or sale, lease or
other disposal of all or a substantial part of Borrower's property or assets,
modify any financial covenants, waive any Default or Event of Default, or waive
or release any lien on any of the Mortgaged Properties or commence any judicial
or nonjudicial foreclosure proceeding, in each case without the written consent
of all the Lenders.
(c) All losses, costs, expenses, disbursements, liabilities, fees
(including reasonable attorneys' fees and disbursements), obligations, damages,
suits, actions and penalties of any kind or nature whatsoever (collectively, a
"LOSS") incurred by Agent in connection with the Advances (except any Loss
resulting solely from the gross negligence or willful misconduct of Agent as
determined by a court of competent jurisdiction) shall be borne by the Lenders
in accordance with each Lender's Percentage.
(d) Each Lender shall, upon demand by Agent, reimburse Agent (to the
extent not otherwise reimbursed by Borrower) for such Lender's Percentage of (i)
any out-of-pocket expenses incurred by Agent in good faith in connection with
any Event of Default under the Loan Documents (including, without limitation,
reasonable fees and disbursements of outside counsel), and (ii) any other
expenses incurred in good faith to the extent not reimbursed by Borrower in
connection with the enforcement of the Loan Documents.
(e) Borrower hereby consents and agrees to the provisions of Sections 7.14
through 7.16 and any modifications thereof entered into by Agent and the Lenders
of such provisions and specifically acknowledges and agrees that,
notwithstanding any provisions in the Loan Documents requiring action by the
"Lenders" or similar provisions in connection with the declaration of an Event
of Default, the acceleration of the indebtedness evidenced by the Loan Documents
and/or the exercise of any remedies under the Loan Documents, Agent is hereby
empowered to act on behalf of the Lenders in accordance with the provisions
hereof and the authority of Agent with respect to any action taken by Agent
pursuant to and in accordance with this Agreement shall not be contested by
Borrower by reason of any different or conflicting provision contained in any of
the Loan Documents.
SECTION 7.17. MANAGEMENT OF ACQUIRED COLLATERAL. If, following any Event of
Default, Agent acquires title to one or more Mortgaged Properties by foreclosure
under the Mortgage (or by deed-in-lieu of foreclosure), Agent shall hold title
to such Mortgaged Property in its own name, as Agent for the Lenders to the
extent of their Commitments. Each Lender hereby irrevocably waives any right to
seek a partition of any interest in the Mortgaged Property. Agent shall have the
sole and exclusive right to make (or to refrain from making) all decisions with
respect to the leasing, encumbering, use, operation, maintenance, improvement,
repair and restoration of the Mortgaged Property (and any improvements located
thereon); provided, however, that Agent shall not, without the prior written
consent of the Required Lenders (a) sell (or lease as a whole) the Mortgaged
Property or encumber the Mortgaged Property with a mortgage, deed of trust or
similar instrument securing indebtedness for borrowed money, or (b) make any
single expenditure with respect to the Mortgaged Property in an amount in excess
of $200,000
62
(exclusive of taxes and assessments, insurance premiums, utility charges and
expenditures required to comply with applicable laws), or (c) make any material
repairs, restorations and/or improvements to the Mortgaged Property (except to
the extent required by applicable laws). Subject to the foregoing, each Lender,
pro rata in accordance with its Commitment, shall reimburse Agent on demand for
all reasonable costs and expenses incurred by Agent in connection with the sale,
lease, encumbering, use, operation, maintenance, improvement, repair and
restoration of the Mortgaged Property (including all costs and charged,
insurance premiums, common area maintenance charges, leasing commissions, tenant
improvement costs, repair costs and restoration costs). The indemnity provisions
contained in Section 7.7 above shall apply equally to actions (and omissions) by
Agent with respect to the Mortgaged Property so acquired by Agent. Each Lender
shall participate pro rata in accordance with their respective Commitment in all
income, expenses, profits and losses of the Mortgaged Property. Without
limitation on the foregoing, Agent shall endeavor to consult with the Lenders
prior to making any material decision regarding the Mortgaged Property.
ARTICLE VIII.
MISCELLANEOUS
SECTION 8.1. NOTICES. Any notice, demand, request or other communication which
any party hereto may be required or may desire to give hereunder shall be in
writing and shall be deemed to have been properly given (a) if hand delivered,
when delivered; (b) if mailed, upon the third Business Day after the day on
which it is deposited in the United States Registered or Certified Mail, postage
prepaid, return receipt requested, addressed as set forth below; or (c) if by
Federal Express or other reliable express courier service, on the next Business
Day after delivered to such express courier service, addressed as set forth
below:
If to Borrower: G REIT, L.P.
c/o Triple Net Properties, LLC
0000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, President
with a copy to: Xxxxxxxxx Xxxxxxxxx
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
If to Agent: LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Manager, Real Estate Administration
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
63
Attention: Group Head, Commercial Real Estate
with a copy to: Jenner & Block, LLC
Xxx XXX Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
or at such other address as the party to be served with notice may have
furnished in writing to the party seeking or desiring to serve notice as a place
for the service of notice.
SECTION 8.2. AMENDMENTS, ETC. No amendment or waiver of any provision of this or
the other Loan Documents, nor consent to any departure by either party
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the party or its agent, if authorized to act on its behalf,
against whom enforcement of such waiver or amendment is sought, and then such
waiver or consent shall be effective only in the specific instance and for the
specified purpose for which given.
SECTION 8.3. NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part of
the Lenders in exercising any right or remedy hereunder or under any other Loan
Document and no course of dealing between Borrower and Agent or the Lenders
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right or remedy hereunder or under any other Loan Document preclude any
other or further exercise thereof or the exercise of any other right or remedy
hereunder. The rights and remedies herein and in the other Loan Documents
expressly provided are cumulative and not exclusive of any rights or remedies
that the Lenders would otherwise have. No notice to or demand on Borrower not
required hereunder or under the other Loan Documents in any case shall entitle
Borrower to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Lenders to any other
or further action in any circumstances without notice or demand.
SECTION 8.4. PAYMENT OF EXPENSES, ETC. Borrower shall:
(a) whether or not the transactions hereby contemplated are consummated,
pay all reasonable out-of-pocket costs and expenses of Agent in the
administration (both before and after the execution hereof and including advice
of counsel as to the rights and duties of Agent) of, and in connection with the
preparation, execution, and delivery of, preservation of rights under,
enforcement of, and, after an Event of Default, refinancing, renegotiation, or
restructuring of, this Agreement and the other Loan Documents and the documents
and instruments referred to therein; any amendment, waiver, or consent relating
thereto (including, without limitation, the reasonable fees and disbursements of
counsel for Agent);
(b) After an Event of Default, pay all reasonably out-of-pocket costs and
expenses of the Lenders (including advice of counsel as to the rights and duties
of the Lenders) in connection with such Event of Default;
(c) to the extent permitted by applicable law, pay and hold Agent and the
Lenders harmless from and against any and all present and future stamp,
recording, and other similar taxes and fees with respect to the foregoing
matters and save the Lenders harmless from and
64
against any and all liabilities with respect to or resulting from any delay or
omission to pay such taxes and fees; and
(d) indemnify Agent and the Lenders and each of their officers, directors,
employees, Affiliates, representatives, and agents from, and hold each of them
harmless against, any and all costs, losses, liabilities, claims, damages and
expenses incurred by any of them (whether or not any of them is designated a
party thereto) arising out of or by reason of any litigation, or other
proceeding related to any actual or proposed use by Borrower of the proceeds of
any of the Advances or Borrower entering into and performing of this Agreement
or the other Loan Documents or resulting from the ownership of any Mortgaged
Property, including, without limitation, the reasonable fees and disbursements
of counsel incurred in connection with any such investigation, litigation, or
other proceeding; provided that Borrower shall not be obligated to indemnify any
such Person to the extent of any costs, losses, liabilities, claims, damages, or
expenses caused by the gross negligence or willful misconduct of such Person.
If and to the extent that the obligations of Borrower under this
Section 8.4 are unenforceable for any reason, Borrower hereby agrees to make the
maximum contribution to the payment and satisfaction of such obligations which
is permissible under applicable law. Borrower's obligations under this Section
8.4 shall survive any termination of this Agreement and the payment of the sums
due hereunder and under the other Loan Documents.
SECTION 8.5. RIGHT OF SETOFF. In addition to and not in limitation of all rights
of offset that the Lenders may have under applicable law, the Lenders shall,
upon the occurrence of any Event of Default and whether or not the Lenders have
made any demand or Borrower's obligations are matured, have the right to
appropriate and apply to the payment of Borrower's obligations hereunder and
under the other Loan Documents, all deposits (general or special, time or
demand, provisional or final) of Borrower then or thereafter held by, and other
indebtedness or property then or thereafter owing by, the Lenders.
SECTION 8.6. BENEFIT OF AGREEMENT. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto, provided that Borrower may not assign or transfer
any of its interest hereunder without the prior written consent of the Lenders.
SECTION 8.7. GOVERNING LAW; SUBMISSION TO JURISDICTION.
(a) This Agreement and the other Loan Documents and the rights and
obligations of the parties thereunder shall be construed in accordance with and
be governed by the law (without giving effect to the conflict of law principles
thereof) of the State of Illinois except as otherwise specifically provided in
the Loan Documents.
(b) Any legal action or proceeding with respect to this Agreement or the
other Loan Documents or any document related thereto may be brought in the
courts of the State of Illinois or of the United States of America for the
Northern District of Illinois, and by execution and delivery of this Agreement,
Borrower hereby accepts for itself and in respect of its property generally and
unconditionally, the jurisdiction of the aforesaid courts. Borrower hereby
irrevocably waives any objection, including, without limitation, any objection
to the laying of
65
venue or based on the grounds of forum non conveniens, which it may now or
hereafter have to the bringing of any such action or proceeding in such
respective jurisdictions. Borrower agrees that any process in any proceeding in
any such court may be served on Borrower through the United States mails in
accordance with Section 8.1.
(c) WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH
OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR THE
PROMISSORY NOTE OR ANY OTHER LOAN DOCUMENTS AND FROM ANY COUNTERCLAIM THEREIN.
(d) Nothing herein shall affect the right of the Lenders to serve process
in any other manner permitted by law or to commence legal proceedings or
otherwise proceed against Borrower in any other jurisdiction.
SECTION 8.8. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.
SECTION 8.9. HEADINGS DESCRIPTIVE. The headings contained in this Agreement are
for convenience only and shall not in any way affect the meaning or construction
of any provision of this Agreement.
SECTION 8.10. ENTIRE AGREEMENT. This Agreement and the other Loan Documents
constitute the entire agreement of the parties with respect to the subject
matter hereof and thereof, and all prior discussions, negotiations, term sheets,
commitment letters, agreements, correspondence and document drafts with respect
to such matters are merged herein and therein. Neither the Lenders nor any
employee of the Lenders has authorized to make any representation or agreement
upon which Borrower or its Affiliates may rely unless such matter is set forth
in this Agreement or the other Loan Documents.
SECTION 8.11. FURTHER ASSURANCES. Borrower hereby agrees to, promptly upon the
request of the Lenders, execute and deliver to the Lenders such additional
documents and to provide such additional information as the Lenders may
reasonably require to carry out or confirm the terms of this Agreement or the
other Loan Documents.
SECTION 8.12. PARTICIPATION. Any Lender may at any time after the execution and
delivery of this Agreement, sell to one or more Persons (each a "PARTICIPANT")
participating interests in any Advance owing to such Lender, any Promissory Note
held by such Lender and/or any other interest of such Lender hereunder (in
respect of any such Lender, its "CREDIT EXPOSURE"). Notwithstanding any such
sale by a Lender of participating interests to a Participant, such Lender's
rights and obligations hereunder shall remain unchanged, such Lender shall
remain solely responsible for the performance thereof, such Lender shall remain
the holder of any such Promissory Note for all purposes hereunder (except as
expressly provided below), and Agent shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations
hereunder. Borrower also agrees that each Participant shall be entitled to
66
the benefits of Sections 2.12. 2.13 and 2.15 hereof. Each Lender agrees that any
agreement between such Lender and any such Participant in respect of such
participating interest shall not restrict such Lender's fight to agree to any
amendment, supplement, waiver or modification to any Loan Document, except where
the result of any of the foregoing would be to extend the final maturity of any
Advance or any regularly scheduled installment thereof or reduce the rate or
extend the time of payment of interest thereon or reduce the principal amount
thereof.
SECTION 8.13. ASSIGNMENTS.
(a) Any Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time after the execution and delivery of
this Agreement and from time to time assign to any Lender or any affiliate
thereof or to any other Person (each a "PURCHASING LENDER") all or any part of
its Credit Exposure, provided that the Credit Exposure acquired by such assignee
shall equal or exceed $10,000,000. Borrower, Agent and the Lenders agree that to
the extent of any assignment, the Purchasing Lender shall be deemed to have the
same rights and benefits under the Loan Documents and the same obligation as it
would have had if it had been a Lender which was one of the original parties
hereto. The consent of Agent and, provided no Default or Event of Default has
occurred, Borrower shall be required prior to an assignment becoming effective,
which consents will not be unreasonably withheld, delayed or conditioned;
provided that Agent shall be entitled to continue to deal solely and directly
with the assignor Lender in connection with the interests so assigned to the
Purchasing Lender unless and until such Purchasing Lender executes a supplement
to this Agreement, substantially in the form of Exhibit T attached hereto (a
"FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT"). Borrower acknowledges that the
provisions of this Section 8.13 relate only to absolute assignments of a
Lender's Credit Exposure and that any restrictions thereon do not pertain to or
prohibit assignments creating security interests, including any pledge or
assignment by a Lender of its Credit Exposure or Promissory Notes to a Federal
Reserve Bank in accordance with Requirements of Law.
(b) Upon (i) execution of a Form of Assignment and Assumption Agreement,
(ii) delivery of an executed copy thereof to Borrower and Agent, (iii) payment
by such Purchasing Lender to such transferor Lender of an amount equal to the
purchase price agreed between such transferor Lender and such Purchasing Lender,
and (iv) payment to the Agent of an assignment fee in the amount of $3,000.00,
such transferor Lender shall be released from its obligations hereunder to the
extent of such assignment and such Purchasing Lender shall for all purposes be a
Lender party to this Agreement and shall have all the rights and obligations of
a Lender under this Agreement to the same extent as if it were an original party
hereto, and no further consent or action by Borrower, the Lenders or Agent shall
be required. Such Form of Assignment and Assumption Agreement shall be deemed to
amend this Agreement to the extent, and only to the extent, necessary to reflect
the addition of such Purchasing Lender as a Lender. Promptly after the
consummation of any transfer to a Purchasing Lender pursuant hereto, the
transferor Lender, Agent and Borrower shall make appropriate arrangements so
that a replacement Promissory Note is issued to such transferor Lender and a new
Promissory Note is issued to such Purchasing Lender, in each case in principal
amounts reflecting such transfer.
67
(c) Notwithstanding anything to the contrary set forth in this Section
8.13, the Agent shall always maintain its Commitment in an amount which is equal
to or greater than the respective Commitments of each other Lender.
SECTION 8.14. WITHHOLDING. Notwithstanding anything to the contrary herein, no
Participant or other assignee of all or any part of the Credit Exposure of any
Lender, other than a Purchasing Lender, shall be entitled to any of the benefits
of Section 2.16 hereof.
SECTION 8.15. AMOUNTS RECEIVED BY THE LENDERS. Each Lender agrees that it shall
act as a trustee for the benefit of the other Lenders to the extent of the
respective interests of the other Lenders in the Advances and/or Letters of
Credit with respect to all sums of any kind paid to or received by such Lender
in payment of all or a portion of the Advances or reimbursement for draws on the
Letters of Credit, as applicable, by or on behalf of Borrower.
SECTION 8.16. NO JOINT VENTURE. Neither the execution of this Agreement nor the
selling of an interest in the Advances nor any agreement to share in profits or
losses as provided herein is intended to be, nor shall it be construed to be,
the formation of a partnership or joint venture among the parties to this
Agreement.
SECTION 8.17. ACKNOWLEDGMENT BY PARTIES HERETO. The agreement to and acceptance
of this Agreement by the parties hereto, indicated by the execution of this
Agreement, shall evidence (a) each party's acceptance of all the terms and
conditions of this Agreement and the other Loan Documents and (b) each party's
consent to Agent's acting as Agent on behalf of the Lenders with regard to all
aspects of the administration, enforcement and collection of the Advances, the
issuance of the Letters of Credit and to all matters pertaining to the Loan
Documents as provided for herein.
SECTION 8.18. RIGHT OF THE LENDERS AND AGENT TO TRANSACT BUSINESS. The Lenders,
Agent and/or any of their respective Affiliates may accept deposits from, lend
money to, act as trustee under indentures of, and generally engage in any kind
of business with, Borrower, its general partners, including General Partner, any
partners of the general partners, or any other Person without any duty to
account therefor to the other Lenders and/or Agent, as the case may be.
SECTION 8.19. SHARING OF PAYMENTS. Each of the Lenders agrees that if it should
receive any amount under this Agreement or any of the other Loan Documents
(whether by voluntary payment, by realization upon security, by the exercise of
the right of banker's lien, by counterclaim or cross action, by the enforcement
of any right under the Loan Documents, or otherwise) which is applicable to the
payment of any Advance (or reimbursement for draws on the Letters of Credit) of
a sum which with respect to the related sum or sums received by the other
Lenders is in a greater proportion than the total of such Advance (or
reimbursement for draws on Letters of Credit) then owed and due to such Lender
bears to the total of such Advance (or reimbursement for draws on Letters of
Credit) then owed and due to all of the Lenders immediately prior to such
receipt, then such Lender receiving such excess payment shall purchase for cash
without recourse or warranty from the other Lenders an interest in such Advance
(or reimbursement for draws on the Letters of Credit) owing to such Lenders in
such amount as shall result in a proportional participation by all of the
Lenders in such amount; provided that if all or any portion of such excess
amount is thereafter recovered from such
68
Lender, such purchase shall be rescinded and the purchase price restored to the
extent of such recovery, but without interest.
SECTION 8.20. LIMITATION OF LIABILITY. Except as set forth in Section 7.11
above, no claim may be made by Borrower or any other Person against Agent or any
Lender or any of their Affiliates, directors, officers, employees, attorneys or
agent of any of such Persons for any special, indirect, consequential or
punitive damages in respect of any claim for breach of contract or any other
theory of liability arising out of or under Article VII; and Borrower hereby
waives, releases and agrees not to xxx upon any such claim for any such damages,
whether or not accrued and whether or not known or suspected to exist in its
favor.
SECTION 8.21. RELIANCE BY BORROWER. Borrower shall have the right to rely,
without investigation, upon all notices, approvals or other actions of Agent.
All provisions of this Agreement requiring submission by Borrower of information
or other documentation, or the obtaining of any approvals or consents, shall be
deemed to apply to Agent only and Borrower shall not otherwise be required to
obtain any approvals of any other Lenders. All actions, information, reports,
notices and any and all other action by Agent to Borrower shall be binding upon
all Lenders.
SECTION 8.22. TIME OF THE ESSENCE. Time is of the essence in this Agreement.
SECTION 8.23. INDEMNITY. Except for an Indemnified Loss which is finally
adjudicated by a court of competent jurisdiction to have resulted directly and
proximately from the gross negligence or willful misconduct of the Lenders or,
if applicable Agent, Borrower agrees absolutely to protect, defend, indemnify
and hold the Lenders, Agent, their respective officers, directors, employees and
agents and each other Person controlling any of the foregoing (each, an
"INDEMNIFIED PARTY") harmless from and against any and all harm, loss,
liability, damage, suite, claim, expense, fees and costs (including, without
limitation, court costs and attorneys' fees) (each, an "INDEMNIFIED LOSS")
suffered or incurred by an Indemnified Party in connection with any claim,
demand, suit or proceeding brought or asserted by any Person against an
Indemnified Party arising out of or relating to the Lenders' and Agent's
entering into or carrying out the terms of this Agreement or any of the Loan
Documents or being the holder of a Promissory Note or any of the Loan Documents
or resulting from Borrower's performance hereunder including, without
limitation, any injury or damage to any Person or property occurring on or about
any of the Mortgaged Properties. This Section 8.23 is intended to apply only to
third party claims against the Indemnified Parties, and not the Lenders' claims
against Borrower if an Event of Default has occurred, which shall be limited as
provided in Article XI. This Section 8.23 shall survive the repayment of the
Indebtedness, the cancellation of the Promissory Notes, and the foreclosures or
reconveyance of the Lenders' security interests in any applicable Mortgaged
Properties.
SECTION 8.24. KNOWLEDGE. For purposes of this Agreement, the phrases "to the
knowledge of Borrower" or "to the best knowledge of Borrower" shall mean, after
reasonable inquiry of Property Manager, the knowledge of Xxxxxxxx, Xxxx Xxxxxx,
Xxxxx Xxxxxxxx and Xxxxxxx Xxxxxxx.
SECTION 8.25. TRANSITIONAL ARRANGEMENTS.
69
(a) This Agreement shall supersede the Original Agreement in its entirety,
except as otherwise provided in this Section 8.25. On the Closing Date, the
rights and obligations of the parties under the Original Agreement, the "Notes"
and the "Note Assumptions" and any Letters of Credit (as such terms are defined
therein) shall be subsumed within and be governed by this Agreement, the Notes
and the Note Assumptions and any Letters of Credit; provided however, that any
of the obligations and liabilities of Borrower under the Original Agreement
outstanding under the Original Agreement shall, for purposes of this Agreement,
be obligations and liabilities hereunder. The Lenders' interests in such
obligations and liabilities, and participations in such Letters of Credit, shall
be reallocated on the Closing Date in accordance with each Lender's applicable
Percentage.
(b) Upon its receipt of the Notes and the Note Assumptions to be delivered
hereunder on the Closing Date, each Lender will promptly return to Borrower,
marked "Cancelled" or "Replaced," the notes and note assumptions of Borrower
held by such Lender pursuant to the Original Agreement. In the event that any
Lender does not return its note or note assumption pursuant to the Original
Agreement within thirty (30) days after the Closing Date, Borrower shall be
entitled to receive an affidavit from such Lender with respect to the unreturned
note.
(c) All interest and all commitment, facility and other fees and expenses
due as of the Closing Date or accruing under or in respect of the Original
Agreement shall be calculated as of the Closing Date (with the Unused Facility
Fee and Letter of Credit Fee prorated for any fractional periods), and shall be
paid on the Closing Date in accordance with the method specified in the Original
Agreement as if such agreement were still in effect.
SECTION 8.26. REPLACEMENT DOCUMENTS. Upon receipt of an affidavit of an officer
of Agent or any Lender as to the loss, theft, destruction or mutilation of a
Promissory Note or any Loan Document which is not of public record, and, in the
case of any such mutilation, upon surrender and cancellation of such Promissory
Note or Loan Document, Borrower will issue, in lieu thereof, a replacement
Promissory Note or Loan Document, dated the date such Promissory Note or Loan
Document was lost, stolen, destroyed or mutilated, in the same principal amount
thereof and otherwise of like tenor.
ARTICLE IX.
RELEASE OF LIENS
SECTION 9.1. RELEASE. Provided no Default or Event of Default shall have
occurred hereunder and be continuing (or would exist immediately after giving
effect to the transactions contemplated by this Section 9.1), Agent shall
release a Mortgaged Property from the Liens created by this Agreement and the
other Loan Documents upon the request of Borrower, subject to the following
terms and conditions:
(a) Borrower shall deliver to Agent written notice of its desire to obtain
such release no later than thirty (30) days prior to the date upon which such
release is to be effected;
70
(b) Borrower shall submit to Agent with such request a Compliance
Certificate, prepared with reference to and accompanied by pro forma financial
statements prepared in accordance with the terms of Sections 5.2 (a) through (d)
adjusted in the best good faith estimate of Borrower to give effect to the
proposed release and demonstrating that no Default or Event of Default shall
exist after giving effect to such release;
(c) Borrower shall pay all reasonable costs and expenses of Agent in
connection with such release, including, without limitation, reasonable
attorneys' fees, appraisal fees and disbursements;
(d) Borrower shall pay to Agent for the account of the Lenders an amount
equal to all Advances disbursed to fund Permitted Purposes with respect to the
Mortgaged Property in question, together with all amounts required under Section
2.15 hereof; and
(e) The release price of the Mortgaged Property shall not be less than the
minimum amount required to cause the outstanding Advances (after giving effect
to the release of the Mortgaged Property) to remain in compliance with the
Maximum Availability Amount.
ARTICLE X.
PATRIOT ACT PROVISIONS
SECTION 10.1. PATRIOT RULES. All capitalized words and phrases and all defined
terms used in the USA Patriot Act of 2001, 107 Public Law 56 (October 26, 2001)
and in other statutes and all orders, rules and regulations of the United Stated
government and its various executive departments, agencies and offices related
to the subject matter of the Patriot Act, including but not limited to,
Executive Order 13224 effective September 24, 2001 (collectively the "PATRIOT
RULES") and are incorporated into this Section 10.1.
(a) Representations Relating to Patriot Rules. Borrower hereby represents
and warrants that Borrower, its limited and general partners and each and every
Person that has or will have an interest in any Mortgaged Property or will
participate in or derive a benefit from, in any manner whatsoever, the Loans,
including, without limitation, Guarantors and each Executing Subsidiary, is: (i)
not a "blocked" person listed in the Annex to Executive Order Nos. 12947, 13099
and 13224 and all modifications thereto or thereof (as used in this Section
10.1, the "ANNEX"); (ii) in full compliance with the requirements of the Patriot
Rules and all other requirements contained in the rules and regulations of the
Office of Foreign Assets Control, Department of the Treasury (as used in this
Section 10.1, "OFAC"); (iii) operated under policies, procedures and practices,
if any, that are in compliance with the Patriot Rules and available to the
Lenders for Lenders' review and inspection during normal business hours and upon
reasonable prior notice; (iv) not in receipt of any notice from the secretary of
state or the Attorney General of the United States or any other department,
agency or office of the United States claiming a violation or possible violation
of the Patriot Rules; (v) not listed as a Specially Designated Terrorist or as a
"blocker" person on any lists maintained by the OFAC pursuant to the Patriot
Rules or any other list of terrorists or terrorist organizations maintained by
the OFAC pursuant to the rules and regulations of the OFAC issued pursuant to
the Patriot Rules; (vi) not a person who has been determined by competent
authority to be subject to any of the prohibitions
71
contained in the Patriot Rules; and (vii) not owned or controlled by or now
acting or will in the future act for or on behalf of any person named in the
Annex or any other list promulgated under the Patriot Rules or any other person
who has been determined to be subject to the prohibitions contained in the
Patriot Rules.
(b) Covenants Relating to Patriot Rules. Borrower covenants and agrees
that in the event Borrower receives any notice that Borrower or any of its
limited partner or general partner or affiliates, including, without limitation,
Guarantors or any Executing Subsidiary, become listed on the Annex or any other
list promulgated under the Patriot Rules or is indicated, arraigned or
custodially detained on charges involving money laundering or predicate crimes
to money laundering, Borrower shall immediately notify Agent. It shall be an
Event of Default hereunder if Borrower, any Person comprising Guarantors or any
Executing Subsidiary becomes listed or any list promulgated under the Patriot
Rules or is indicated, arraigned or custodially detained on charges involving
money laundering or predicate crimes to money laundering.
[Signatures page follows]
72
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Agreement as of the date first written
above.
BORROWER: G REIT, L.P., a Virginia limited partnership
By: G REIT, Inc., a Virginia corporation, its
general partner
BY: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President
AGENT: LASALLE BANK NATIONAL ASSOCIATION
By /s/ Xxxx Xxxxxxxxxx
---------------------------------
Name: Xxxx Xxxxxxxxxx
Title: First Vice President
LENDERS: LASALLE BANK NATIONAL ASSOCIATION
By: /s/ Xxxx Xxxxxxxxxx
--------------------------------
Name: Xxxx Xxxxxxxxxx
Title: First Vice President
FLEET BANK
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
LIST OF EXHIBITS AND SCHEDULES
Exhibit A: List of Lenders and Percentages
Exhibit B: Form of Notice of Borrowing
Exhibit C: Form of Promissory Note
Exhibit D: Form of Assignment and Subordination of Advisory Agreement
Exhibit E: Form of Assignment and Subordination of Management Agreement
Exhibit F: Form of Assignment of Leases and Rents
Exhibit G: Form of Collateral Assignment of Interest Rate Agreement
Exhibit H: Form of Environmental Indemnity
Exhibit I: Form of General Partner Guaranty
Exhibit J: Form of Intercreditor Agreement
Exhibit K: Intentionally Deleted
Exhibit L: Form of Mortgage
Exhibit M: Form of Note Assumption
Exhibit N: Form of Xxxxxxxx/Advisor Guaranty
Exhibit O: Form of Opinion of Counsel to Borrower and Guarantor
Exhibit O-1: Form of Opinion of Local Counsel
Exhibit P: Form of Certificate
Exhibit P-1: Form of Manager's Certificate for delivery on date of Advance for a
Mortgaged Property
Exhibit Q: Survey Requirements and Certification Form
Exhibit R: Form of Subordination Non-Disturbance and Attornment Agreement
Exhibit S: Form of Tenant Estoppel
Exhibit T: Form of Assignment and Assumption Agreement
1
EXHIBIT A
LIST OF LENDERS AND PERCENTAGES
LENDER COMMITMENT PERCENTAGES
--------------------- -------------- ------------
LaSalle Bank National $35,000,000.00 53.846153846
Association
Fleet Bank $30,000,000.00 46.153846154
-------------- ------------
TOTAL COMMITMENTS: $65,000,000.00 100
-------------- ------------
1
