1
EXHIBIT 10.9
REVOLVING CREDIT AGREEMENT
among
PAN PACIFIC RETAIL PROPERTIES, INC.,
as Borrower
CERTAIN SUBSIDIARIES OF PAN PACIFIC RETAIL PROPERTIES, INC.,
as Guarantors
THE LENDERS IDENTIFIED HEREIN
and
BANK OF AMERICA, N.A.,
as Administrative Agent,
FIRST UNION NATIONAL BANK,
as Syndication Agent,
U.S. BANK, NATIONAL ASSOCIATION,
as Documentation Agent,
and
DRESDNER BANK AG, NEW YORK AND GRAND CAYMAN BRANCHES,
GUARANTY FEDERAL BANKS, F.S.B.,
and
▇▇▇▇▇ FARGO BANK, N.A.,
as Co-Agents
November 13, ▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ SECURITIES LLC,
as Sole Lead Arranger and Sole Book Manager
2
TABLE OF CONTENTS
Page
----
SECTION 1 DEFINITIONS AND ACCOUNTING TERMS................................................. 1
1.1 Definitions.................................................................... 1
1.2 Computation of Time Periods and Other Definition Provisions.................... 24
1.3 Accounting Terms............................................................... 24
1.4 Joint Venture Investments...................................................... 24
1.5 Time........................................................................... 24
SECTION 2 CREDIT FACILITY.................................................................. 25
2.1 Loans.......................................................................... 25
2.2 Letter of Credit Subfacility................................................... 28
SECTION 3 GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT..................... 34
3.1 Interest....................................................................... 34
3.2 Place and Manner of Payments................................................... 34
3.3 Prepayments.................................................................... 34
3.4 Fees........................................................................... 36
3.5 Payment in full at Maturity.................................................... 37
3.6 Computations of Interest and Fees.............................................. 37
3.7 Pro Rata Treatment............................................................. 38
3.8 Sharing of Payments............................................................ 38
3.9 Capital Adequacy............................................................... 39
3.10 Inability To Determine Interest Rate........................................... 39
3.11 Illegality..................................................................... 40
3.12 Requirements of Law............................................................ 40
3.13 Taxes.......................................................................... 41
3.14 Compensation................................................................... 42
3.15 Determination and Survival of Provisions....................................... 43
SECTION 4 GUARANTY......................................................................... 43
4.1 Guaranty of Payment............................................................ 43
4.2 Obligations Unconditional...................................................... 44
4.3 Modifications.................................................................. 44
4.4 Waiver of Rights............................................................... 45
4.5 Reinstatement.................................................................. 45
4.6 Remedies....................................................................... 45
4.7 Limitation of Guaranty......................................................... 46
4.8 Rights of Contribution......................................................... 46
SECTION 5 CONDITIONS PRECEDENT............................................................. 46
5.1 Closing Conditions............................................................. 46
5.2 Conditions to All Extensions of Credit......................................... 52
SECTION 6 REPRESENTATIONS AND WARRANTIES................................................... 52
i
3
6.1 Organization and Good Standing................................................. 52
6.2 Due Authorization.............................................................. 53
6.3 Enforceable Obligations........................................................ 53
6.4 No Conflicts................................................................... 53
6.5 Consents....................................................................... 53
6.6 Financial Condition............................................................ 53
6.7 No Material Change............................................................. 54
6.8 Disclosure..................................................................... 54
6.9 No Default..................................................................... 54
6.10 Litigation..................................................................... 54
6.11 Taxes.......................................................................... 54
6.12 Compliance with Law............................................................ 55
6.13 Licenses, etc.................................................................. 55
6.14 Ownership of Collateral; Liens................................................. 55
6.15 Insurance...................................................................... 55
6.16 Use of Proceeds................................................................ 55
6.17 Government Regulation.......................................................... 55
6.18 No Burdensome Restrictions..................................................... 56
6.19 Compliance with ERISA.......................................................... 56
6.20 Environmental Matters.......................................................... 58
6.21 Organization Structure/Subsidiaries............................................ 59
6.22 Properties..................................................................... 59
6.23 Solvency....................................................................... 59
SECTION 7 AFFIRMATIVE COVENANTS............................................................ 60
7.1 Information Covenants.......................................................... 60
7.2 Financial Covenants............................................................ 63
7.3 Preservation of Existence...................................................... 64
7.4 Maintenance of Assets.......................................................... 64
7.5 Insurance...................................................................... 64
7.6 Performance of Obligations..................................................... 65
7.7 Compliance with Law............................................................ 65
7.8 Payment of Taxes and Other Indebtedness........................................ 65
7.9 Books and Records.............................................................. 65
7.10 Audits/Inspections............................................................. 65
7.11 Use of Proceeds................................................................ 66
7.12 Additional Credit Parties...................................................... 66
7.13 Distributions from Down-REITs.................................................. 66
7.14 Consents....................................................................... 66
SECTION 8 NEGATIVE COVENANTS............................................................... 67
8.1 Indebtedness................................................................... 67
8.2 Liens.......................................................................... 67
8.3 Nature of Business............................................................. 68
8.4 Consolidation and Merger....................................................... 68
8.5 Sale or Lease of Assets........................................................ 68
8.6 Investments.................................................................... 69
ii
4
8.7 Restricted Payments............................................................ 69
8.8 Transactions with Affiliates................................................... 69
8.9 Fiscal Year; Organizational Documents.......................................... 69
8.10 No Limitations................................................................. 69
8.11 Other Negative Pledges......................................................... 70
8.12 Construction and Development................................................... 70
SECTION 9 EVENTS OF DEFAULT................................................................. 70
9.1 Events of Default.............................................................. 70
9.2 Acceleration; Remedies......................................................... 73
9.3 Allocation of Payments After Event of Default.................................. 75
SECTION 10 AGENCY PROVISIONS................................................................ 76
10.1 Appointment.................................................................... 76
10.2 Delegation of Duties........................................................... 76
10.3 Exculpatory Provisions......................................................... 77
10.4 Reliance on Communications..................................................... 77
10.5 Notice of Default.............................................................. 78
10.6 Non-Reliance on Administrative Agent and Other Lenders......................... 78
10.7 Indemnification................................................................ 79
10.8 Administrative Agent in Its Individual Capacity................................ 79
10.9 Successor Agent................................................................ 80
SECTION 11 MISCELLANEOUS.................................................................... 80
11.1 Notices........................................................................ 80
11.2 Right of Set-Off, Automatic Debits............................................. 81
11.3 Benefit of Agreement........................................................... 81
11.4 No Waiver; Remedies Cumulative................................................. 84
11.5 Payment of Expenses; Indemnification........................................... 84
11.6 Amendments, Waivers and Consents............................................... 85
11.7 Counterparts/Telecopy.......................................................... 86
11.8 Headings....................................................................... 86
11.9 Defaulting Lender.............................................................. 86
11.10 Survival of Indemnification and Representations and Warranties................. 86
11.11 Governing Law.................................................................. 86
11.12 Waiver of Jury Trial; Waiver of Consequential Damages.......................... 87
11.13 Severability................................................................... 87
11.14 Entirety....................................................................... 87
11.15 Binding Effect................................................................. 87
11.16 Confidentiality................................................................ 88
11.17 Further Assurances............................................................. 89
iii
5
SCHEDULES
Schedule 1.1(a) Commitment Percentages
Schedule 1.1(b) Down-REITs
Schedule 2.2 Existing Letters of Credit
Schedule 6.5 Consents
Schedule 6.21 Organization Structure/Subsidiaries
Schedule 6.22 Properties
Schedule 11.1 Notices
EXHIBITS
Exhibit 2.1(b) Form of Notice of Borrowing
Exhibit 2.1(e) Form of Notice of Continuation/Conversion
Exhibit 2.1(g) Form of Note
Exhibit 2.2 Form of Notice of Letter of Credit
Exhibit 7.1(c) Form of Officer's Certificate
Exhibit 7.1(d) Form of Borrowing Base Certificate
Exhibit 7.12 Form of Joinder Agreement
Exhibit 11.3 Form of Assignment Agreement
iv
6
OBLIGOR # 00224394
REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT (this "Credit Agreement") is entered
into as of November 13, 2000 among PAN PACIFIC RETAIL PROPERTIES, INC., a
Maryland corporation (the "Borrower"), certain Subsidiaries of the Borrower as
Guarantors, the Lenders (as defined herein), and BANK OF AMERICA, N.A., as
Administrative Agent for the Lenders (the "Administrative Agent"), FIRST UNION
NATIONAL BANK, as Syndication Agent, U.S. BANK, NATIONAL ASSOCIATION, as
Documentation Agent, and Dresdner Bank AG, New York and Grand Cayman Branches,
Guaranty Federal Bank, F.S.B. and ▇▇▇▇▇ Fargo Bank, N.A., as Co-Agents.
RECITALS
WHEREAS, the Borrower has requested that the Lenders provide it with a
revolving credit facility for the purposes set forth herein;
WHEREAS, the Guarantors will benefit, directly or indirectly, from such
revolving credit facility and, therefore, are willing to provide credit support
for the obligations incurred thereunder; and
WHEREAS, the Lenders have agreed to make the requested revolving credit
facility available to the Borrower on the terms and subject to the conditions
hereinafter set forth.
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS AND ACCOUNTING TERMS
1.1 DEFINITIONS.
As used herein, the following terms shall have the meanings herein
specified unless the context otherwise requires. Defined terms herein shall
include in the singular number the plural and in the plural the singular:
"Actual Debt Service" means for any period, without duplication,
the sum of (a) Consolidated Interest Expense, plus (b) subject to
Section 1.4, the aggregate amount of all principal and other payments
due during such period with respect to Indebtedness of the Combined
Parties (excluding, however, any principal "balloon payments" paid or
payable by any member of the Consolidated Group during such period),
plus (c) cash dividends paid on any preferred stock of the Borrower.
7
"Adjusted Base Rate" means the Base Rate plus the Applicable
Percentage.
"Adjusted Current Value" means, for any Property, as of any date,
the quotient of (a) Net Operating Income for such Property as of such
date divided by (b) the Applicable Cap Rate; provided, however, that if
the Administrative Agent has not received quarterly operating statements
for such Property for each of the immediately preceding four calendar
quarters (due to the fact that the applicable Combined Party has owned
such Property for less than four calendar quarters), then the "Adjusted
Current Value" for such Property shall be the lesser of (i) the Adjusted
Current Value as calculated above, or (ii) the purchase price paid by
the applicable Combined Party (or by any predecessor thereto) upon
acquiring such Property, net of all brokerage commissions, finder's fees
and other closing costs or expenses incurred by such Combined Party in
connection with the acquisition of such Property.
"Adjusted EBITDA" means, for any period, with respect to the
Combined Parties, an amount equal to:
(a) Consolidated Net Income for such period excluding the
effect of any extraordinary or other non-recurring gains
(including, without limitation, any gain from the sale of property
not in the ordinary course of business) and any extraordinary or
other non-recurring losses; plus
(b) amounts which in the determination of Consolidated Net
Income for such period have been deducted for:
(i) Consolidated Interest Expense for such period,
(ii) total federal, state, foreign or other income or
franchise taxes for such period,
(iii) depreciation,
(iv) amortization, and
(v) other non-cash charges and expenses; plus
(c) an amount equal to the sum of (i) without duplication,
net income for such period (as determined in accordance with GAAP)
from all Combined Parties other than members of the Consolidated
Group but only to the extent of the aggregate ownership interests
of the members of the Consolidated Group in such Combined Parties
and (ii) Investments by members of the Consolidated Group in such
Combined Parties made during such period; minus
2
8
(d) an amount equal to the greater of (i) $0.25 times the
monthly weighted average aggregate net rentable square footage of
all Properties of the Consolidated Group for such period and (ii)
all actual Capital Expenditures made by the Consolidated Group for
all Properties of the Consolidated Group during such period; minus
(e) the sum of (i) without duplication, net losses (as
determined in accordance with GAAP) of the Combined Parties other
than members of the Consolidated Group but only to the extent of
the aggregate ownership interests of the members of the
Consolidated Group in such Combined Parties and (ii) dividends,
distributions, loan payments and other cash returns on Investments
made by members of the Consolidated Group in such Combined Parties.
"Adjusted LIBOR Rate" means the LIBOR Rate plus the Applicable
Percentage.
"Administrative Agent" means Bank of America, N.A. (or any
successor thereto) or any successor administrative agent appointed
pursuant to Section 10.9.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all
directors and officers of such Person), controlled by or under direct or
indirect common control with such Person. A Person shall be deemed to
control a corporation, partnership, limited liability company or real
estate investment trust if such Person possesses, directly or
indirectly, the power (i) to vote 10% or more of the Voting Stock of
such corporation or to vote 10% or more of the ownership interests of
such partnership, limited liability company, or real estate investment
trust or (ii) to direct or cause direction of the management and
policies of such corporation, partnership, limited liability company or
real estate investment trust, whether through the ownership of Voting
Stock, as managing or general partner, by contract or otherwise.
"Agency Services Address" means Bank of America, N.A./Loan
Administration, ▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, or such other address as may be identified by
written notice from the Administrative Agent to the Borrower and the
Lenders.
"Agent-Related Person" means the Administrative Agent, together
with its Affiliates, including the Arranger, and their respective
officers, directors, employees, agents, counsel and attorneys-in-fact.
"Aggregate Adjusted Current Value" means, as of any date of
determination, the sum of the Adjusted Current Values as of such date
for all Properties owned by the Consolidated Group.
"Applicable Cap Rate" means 9.50% for all Properties; provided,
however, that the Required Lenders shall have the right, at the end of
any calendar year, to review and adjust, in their reasonable discretion,
the Applicable Cap Rate, which change shall become
3
9
effective immediately upon written notice by the Administrative Agent to
the Borrower.
"Applicable Percentage" means, for Loans and Facility Fees, the
appropriate applicable percentages corresponding to the Debt Ratings of
the Borrower in effect as of the most recent Calculation Date as shown
below:
Applicable Percentages for Loans Applicable
Pricing Debt Ratings -------------------------------- Percentage for
Level (S&P/▇▇▇▇▇'▇) LIBOR Loans Base Rate Loans Facility Fees
----- ------------- -------------- ---------------- -------------
I greater than or equal to A- from S&P/ .80% 0% .15%
greater than or equal to A3 from ▇▇▇▇▇'▇
II less than A- but greater than or equal to .90% 0% .20%
BBB+ from S&P/less than A3 but greater
than or equal to Baa1 from ▇▇▇▇▇'▇
III less than BBB+ but greater than or equal to 1.00% 0% .20%
BBB from S&P/less than Baa1 but greater
than or equal to Baa2 from ▇▇▇▇▇'▇
IV less than BBB but greater than or equal to 1.10% 0% .20%
BBB- from S&P/less than Baa2 but greater
than or equal to Baa3 from ▇▇▇▇▇'▇
V less than BBB- from S&P/less than Baa3 1.35% .25% .25%
from ▇▇▇▇▇'▇/unrated by both
S&P and ▇▇▇▇▇'▇
If at any time there is a split in the Borrower's Debt Ratings
between S&P and ▇▇▇▇▇'▇, the Applicable Percentages shall be determined
by the lower of the two Debt Ratings (i.e. the higher pricing). If the
Borrower has received a Debt Rating from either S&P or ▇▇▇▇▇'▇, but not
both, the Applicable Percentages shall be determined by the one Debt
Rating in effect.
The Applicable Percentages for Loans and Facility Fees shall, in
each case, be determined and adjusted on the date (each a "Calculation
Date") (a) on which either Debt Rating of the Borrower is downgraded
(i.e., so as to result in higher pricing) or (b) that is the first
Business Day following the Administrative Agent's receipt of notice from
the Borrower that either Debt Rating has been upgraded (i.e., so as to
result in lower pricing). Each such Applicable Percentage shall be
effective from one Calculation Date until the next Calculation Date. Any
adjustment in the Applicable Percentages shall be applicable to all
existing Loans as well as any new Loans made.
The Borrower shall immediately deliver to the Administrative Agent,
at the address set forth on Schedule 11.1 and at the Agency Services
Address, information regarding any change in either Debt Rating of the
Borrower.
"Arranger" means Banc of America Securities LLC, in its capacity as
sole lead arranger and sole book manager.
"Asset Disposition" means the disposition of any or all of the
assets (or the Capital Stock of a Subsidiary) of a member of the
Consolidated Group, whether by sale, lease, transfer or otherwise.
"Assignment Agreement" means any assignment agreement between an
assigning
4
10
Lender and an Eligible Assignee substantially in the form of Exhibit
11.3.
"Attorney Costs" means all reasonable fees and disbursements of any
law firm or other external counsel and the reasonable allocated cost of
internal legal services and all disbursements of internal counsel.
"Bank of America" means Bank of America, N.A., a national banking
association.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from
time to time.
"BAS" means Banc of America Securities LLC or any successor
thereto.
"Base Rate" means, for any day, the rate per annum equal to the
greater of (a) the Federal Funds Rate in effect on such day plus 1/2 of
1% or (b) the Prime Rate in effect on such day. Any change in the Base
Rate due to a change in the Prime Rate or the Federal Funds Rate shall
be effective on the effective date of such change in the Prime Rate or
the Federal Funds Rate, respectively.
"Base Rate Loan" means a Loan bearing interest based at a rate
determined by reference to the Base Rate.
"Big Box Facility" means a single-tenant, free-standing retail real
estate facility with at least 20,000 square feet of net rentable space.
"Borrower" means Pan Pacific Retail Properties, Inc., a Maryland
corporation.
"Borrowing Base" means, as of any date of calculation, the sum of:
(a) the product of (i) the aggregate Adjusted Current Values
for all Borrowing Base Income Properties multiplied by (ii) .50;
plus
(b) the product of (i) the aggregate cash Investments by the
Consolidated Group in all Borrowing Base Development Properties
multiplied by (ii) .50;
provided that (v) Borrowing Base Income Properties that are Reduced
Lease Rate Income Properties shall not account for more than 15% of the
Borrowing Base; (w) Borrowing Base Income Properties that are Big Box
Facilities leased to Raley's shall not account for more than 5% of the
Borrowing Base; (x) Borrowing Base Income Properties that are Big Box
Facilities leased to Persons other than Raley's shall not account for
more than 10% of the Borrowing Base; (y) Borrowing Base Development
Properties shall not account for more than 10% of the Borrowing Base;
and (z) Borrowing Base Properties owned by Down-REITs shall not account
for more than 7.5% of the Borrowing Base.
"Borrowing Base Certificate" means a certificate setting forth the
calculation of the
5
11
Borrowing Base substantially in the form of Exhibit 7.1(d).
"Borrowing Base Development Property" means any Development
Property that is designated by the Borrower in a Borrowing Base
Certificate as a Borrowing Base Property.
"Borrowing Base Income Property" means any Income Property that is
designated by the Borrower in a Borrowing Base Certificate as a
Borrowing Base Property.
"Borrowing Base Property" means any Income Property or any
Development Property designated by the Borrower in a Borrowing Base
Certificate to be included in the calculation of the Borrowing Base;
provided (a) (i) if no Default or Event of Default would be caused
thereby and (ii) the Borrower complies with Section 3.3(b)(i), the
Borrower may add or remove Properties as Borrowing Base Properties at
any time and from time to time upon delivery of a Borrowing Base
Certificate to the Administrative Agent and (b) on and as of any date
that a Property fails to qualify as a Borrowing Base Property, it shall
immediately be deemed excluded from the Borrowing Base for all purposes
hereof.
"Bridge Facility" means that certain $100 million 364-day term
credit facility, dated as of the Closing Date, among the Borrower, the
Guarantors, the Administrative Agent and any other lenders that may be
party thereto.
"Business Day" means any day other than a Saturday, a Sunday, a
legal holiday or a day on which banking institutions are authorized or
required by law or other governmental action to close in Los Angeles,
California; provided that in the case of LIBOR Loans, such day is also a
day on which dealings between banks are carried on in U.S. dollar
deposits in the London interbank market.
"Calculation Date" has the meaning set forth in the definition of
Applicable Percentage.
"Capital Expenditures" means all actual expenditures of any Person
for replacements and substitutions of improvements to any Property that,
in accordance with GAAP, would be classified on the balance sheet of
such Person as Capital Expenditures, including, without limitation,
Capital Leases.
"Capital Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee
which, in accordance with GAAP, is or should be accounted for as a
capital lease on the balance sheet of such Person.
"Capital Stock" means (a) in the case of a corporation, all classes
of capital stock of such corporation, (b) in the case of a partnership,
partnership interests (whether general, limited or operating partnership
units), (c) in the case of a limited liability company, membership
interests and (d) any other interest or participation that confers on a
Person the right to receive a share of the profits and losses of, or
distribution of assets of, the issuing Person.
6
12
"Cash Equivalents" means (a) securities issued or directly and
fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith and
credit of the United States of America is pledged in support thereof)
having maturities of not more than twelve months from the date of
acquisition, (b) U.S. dollar denominated time and demand deposits and
certificates of deposit of (i) any Lender or any of its Affiliates, (ii)
any domestic commercial bank having capital and surplus in excess of
$500,000,000 or (iii) any bank whose short-term commercial paper rating
from S&P is at least A-1 or the equivalent thereof or from ▇▇▇▇▇'▇ is at
least P-1 or the equivalent thereof (any such bank being an "Approved
Bank"), in each case with maturities of not more than 270 days from the
date of acquisition, (c) commercial paper and variable or fixed rate
notes issued by any Approved Bank (or by the parent company thereof) or
any variable rate notes issued by, or guaranteed by, any domestic
corporation rated A-1 (or the equivalent thereof) or better by S&P or
P-1 (or the equivalent thereof) or better by Moody's and maturing within
six months of the date of acquisition, (d) repurchase agreements with a
bank or trust company (including any of the Lenders) or securities
dealer having capital and surplus in excess of $500,000,000 for direct
obligations issued by or fully guaranteed by the United States of
America in which a Credit Party shall have a perfected first priority
security interest (subject to no other Liens) and having, on the date of
purchase thereof, a fair market value of at least 100% of the amount of
the repurchase obligations and (e) Investments, classified in accordance
with GAAP as current assets, in money market investment programs
registered under the Investment Company Act of 1940, as amended, which
are administered by financial institutions having capital of at least
$500,000,000 and the portfolios of which are limited to Investments of
the character described in the foregoing subdivisions (a) through (d).
"Change of Control" means either of the following events:
(a) other than Revenue Properties (U.S.), Inc., a Delaware
corporation, any "person" or "group" (within the meaning of Section
13(d) or 14(d) of the Exchange Act) has become, directly or
indirectly, the "beneficial owner" (as defined in Rules 13d-3 and
13d-5 under the Exchange Act), by way of merger, consolidation or
otherwise of 20% or more of the Voting Stock of the Borrower on a
fully-diluted basis, after giving effect to the conversion and
exercise of all outstanding warrants, options and other securities
of the Borrower convertible into or exercisable for Voting Stock of
the Borrower (whether or not such securities are then currently
convertible or exercisable); or
(b) during any period of two consecutive calendar years,
individuals who at the beginning of such period constituted the
board of directors of the Borrower together with any new members of
such board of directors whose elections by such board or board of
directors or whose nomination for election by the stockholders of
the Borrower was approved by a vote of a majority of the members of
such board of directors then still in office who either were
directors at the beginning of such period or whose election or
nomination for election was previously so approved cease for any
reason to constitute a majority of the directors of the Borrower
then in office.
7
13
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute thereto, as interpreted by the rules and regulations
issued thereunder, in each case as in effect from time to time.
References to sections of the Code shall be construed also to refer to
any successor sections.
"Collateral" has the meaning set forth in the Pledge Agreement.
"Combined Parties" means the Credit Parties and their Subsidiaries
and all joint ventures or general or limited partnerships to which a
Credit Party or one of its Subsidiaries is a party.
"Commitment" means, with respect to each Lender, such Lender's
Commitment Percentage of the Revolving Committed Amount and
"Commitments" means, collectively, the sum of each Lender's Commitment.
"Commitment Percentage" means, for each Lender, the percentage
identified as its Commitment Percentage on Schedule 1.1(a), as such
percentage may be modified in connection with an increase in the
Revolving Committed Amount in accordance with the provisions of Section
2.1(h) or increased or decreased as a result of any assignment made in
accordance with the provisions of Section 11.3.
"Consolidated Group" means the Credit Parties and all Subsidiaries
of the Credit Parties, the financial statements of whom are consolidated
with those of the Borrower in accordance with GAAP.
"Consolidated Interest Expense" means, for any period, subject to
Section 1.4, the interest expense of the Combined Parties (including,
without limitation, imputed interest on Capital Leases, all commissions,
discounts and other fees and charges owed with respect to letters of
credit and bankers' acceptance financing, the net costs associated with
Hedging Obligations, amortization of other financing fees and expenses,
the interest portion of any deferred payment obligation, amortization of
discounts or premiums, if any, and all non-cash interest expense).
"Consolidated Net Income" means, for any period, subject to Section
1.4, the net income (or loss) of the Combined Parties.
"Consolidated Tangible Net Worth" means, as of any date of
calculation, an amount equal to (a) total assets of the Consolidated
Group as determined in accordance with GAAP minus (b) the amount of
intangible assets of the Consolidated Group as determined in accordance
with GAAP, including, without limitation, deferred costs associated with
goodwill, intellectual property, franchises, organizational expenses,
deferred financing charges, debt acquisition costs, start-up costs,
pre-opening costs, prepaid pension costs or any other deferred charges
minus (c) the total liabilities of the
8
14
Consolidated Group as determined in accordance with GAAP.
"Credit Documents" means this Credit Agreement, the Pledge
Agreement, any Uniform Commercial Code financing statements, the Notes,
any Notice of Borrowing, any Notice of Continuation/Conversion and all
other related agreements and documents issued or delivered hereunder or
thereunder or pursuant hereto or thereto.
"Credit Exposure" has the meaning set forth in the definition of
Required Lenders in this Section 1.1.
"Credit Parties" means the Borrower and the Guarantors and "Credit
Party" means any one of them.
"Debt Rating" means, as to any Person, the long-term, senior,
unsecured, non-credit enhanced debt rating of such Person from S&P or
Moody's.
"Default" means any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender that, (a) has
failed to make a Loan or purchase a Participation Interest required
pursuant to the terms of this Credit Agreement (but only for so long as
such Loan is not made or such Participation Interest is not purchased),
(b) has failed to pay to the Administrative Agent or any Lender an
amount owed by such Lender pursuant to the terms of this Credit
Agreement (but only for so long as such amount has not been repaid) or
(c) has been deemed insolvent or has become subject to a bankruptcy or
insolvency proceeding or to a receiver, trustee or similar official.
"Development Property" means any Property (other than an Income
Property) currently under development or construction that satisfies the
following conditions:
(a) such Property is an Unencumbered Property;
(b) such Property is, or will be, a multi-tenant retail
shopping center where the anchor tenant either (i) is Raley's or
(ii) has a Debt Rating of BBB- or better from S&P and/or Baa3 or
better from Moody's;
(c) such Property is owned 100% in fee by (i) the Borrower
or (ii) a Guarantor;
(d) there is no existing or threatened violation of any
applicable Environmental Law with respect to such Property; and
(e) at least 50% of the pro forma base rental gross income
for such Property is represented by executed leases with Persons
other than the Combined Parties or Affiliates of the Combined
Parties; and
9
15
(f) such Property has not been a Borrowing Base Property for
more than 18 months.
"Dollars" and "$" means dollars in lawful currency of the United
States of America.
"Down-REITs" means those real estate investment trusts set forth on
Schedule 1.1(b); provided that each such Down-REIT: (a) is a non-wholly
owned Subsidiary of the Borrower, (b) is subject to full management
control by the Borrower, including, without limitation, full discretion
by the Borrower as to the distribution of funds from and the sale of
Properties of such Down-REIT, and (c) is a member of the Consolidated
Group.
"Effective Date" means the date on which the conditions set forth
in Section 5.1 shall have been fulfilled (or waived in the sole
discretion of the Lenders).
"Eligible Assignee" means (a) any Lender or any Affiliate or
Subsidiary of a Lender (without the approval or consent of any other
Person) and (b) any other Person approved by the Administrative Agent
and the Borrower (such approval not to be unreasonably withheld or
delayed); provided that (i) the Borrower's consent is not required
during the existence and continuation of an Event of Default and (ii)
approval by the Borrower shall be deemed given if no objection is
received by the assigning Lender and the Administrative Agent from the
Borrower within five Business Days after notice of such proposed
assignment has been received by the Borrower.
"Environmental Claim" means any investigation, written notice,
violation, written demand, written allegation, action, suit, injunction,
judgment, order, consent decree, penalty, fine, lien, proceeding, or
written claim whether administrative, judicial or private in nature
arising (a) pursuant to, or in connection with, an actual or alleged
violation of, any Environmental Law, (b) in connection with any
Hazardous Material, (c) from any assessment, abatement, removal,
remedial, corrective, or other response action in connection with an
Environmental Law or other order of a Governmental Authority or (d) from
any actual or alleged damage, injury, threat, or harm to health, safety,
natural resources, or the environment.
"Environmental Laws" means any current or future legal requirement
of any Governmental Authority pertaining to (a) the protection of
surface water and groundwater from contamination with Hazardous
Materials, (b) the management, manufacture, possession, presence, use,
generation, transportation, treatment, storage, disposal, release,
threatened release, abatement, removal, remediation or handling of, or
exposure to, any hazardous or toxic substance or material or (c)
pollution (including any release to land surface water and groundwater)
and includes, without limitation, the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended by the
Superfund Amendments and Reauthorization Act of 1986, 42 USC 9601 et
seq., Solid Waste Disposal Act, as amended by the Resource Conservation
and Recovery Act of 1976 and Hazardous and Solid Waste Amendment of
1984, 42 USC 6901 et seq., Federal Water Pollution Control Act, as
amended by the Clean Water Act of 1977, 33 USC 1251 et seq.,
10
16
Clean Air Act of 1966, as amended, 42 USC 7401 et seq., Toxic Substances
Control Act of 1976, 15 USC 2601 et seq., Hazardous Materials
Transportation Act, 49 USC App. 1801 et seq., Occupational Safety and
Health Act of 1970, as amended, 29 USC 651 et seq., Oil Pollution Act of
1990, 33 USC 2701 et seq., Emergency Planning and Community
Right-to-Know Act of 1986, 42 USC 11001 et seq., National Environmental
Policy Act of 1969, 42 USC 4321 et seq., Safe Drinking Water Act of
1974, as amended, 42 USC 300(f) et seq., any analogous implementing or
successor law, and any amendment, rule, regulation, order, or directive
issued thereunder.
"Equity Issuance" means any issuance by a member of the
Consolidated Group to any Person of (a) shares of its Capital Stock or
other equity interests, (b) any shares of its Capital Stock or other
equity interests pursuant to the exercise of options (other than stock
issued to employees and directors pursuant to employees or directors
stock option plans) or warrants or (c) any shares of its Capital Stock
or other equity interests pursuant to the conversion of any debt
securities to equity.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and any successor statute thereto, as interpreted by the
rules and regulations thereunder, all as the same may be in effect from
time to time. References to sections of ERISA shall be construed also to
refer to any successor sections.
"ERISA Affiliate" means an entity, whether or not incorporated,
which is under common control with a member of the Consolidated Group
within the meaning of Section 4001(a)(14) of ERISA, or is a member of a
group which includes a member of the Consolidated Group and which is
treated as a single employer under Sections 414(b), (c), (m) or (o) of
the Code.
"ERISA Event" means (a) with respect to any Single Employer or
Multiple Employer Plan, the occurrence of a Reportable Event or the
substantial cessation of operations (within the meaning of Section
4062(e) of ERISA); (b) the withdrawal of the Borrower, any member of the
Consolidated Group or any ERISA Affiliate from a Multiple Employer Plan
during a plan year in which it was a substantial employer (as such term
is defined in Section 4001(a)(2) of ERISA), or the termination of a
Multiple Employer Plan; (c) the distribution of a notice of intent to
terminate or the actual termination of a Plan pursuant to Section
4041(a)(2) or 4041A of ERISA; (d) the institution of proceedings to
terminate or the actual termination of any Plan by the PBGC under
Section 4042 of ERISA; (e) any event or condition which might constitute
grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan; (f) the complete or
partial withdrawal of the Borrower, any member of the Consolidated Group
or any ERISA Affiliate from a Multiemployer Plan or notification that a
Multiemployer Plan is in reorganization; (g) the conditions for
imposition of a lien under Section 302(f) of ERISA exist with respect to
any Plan; or (h) the adoption of an amendment to any Plan requiring the
provision of security to such Plan pursuant to Section 307 of ERISA.
"Event of Default" means any of the events or circumstances
described in Section 9.1.
11
17
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, modified, succeeded or replaced from time to time, and the
rules and regulations promulgated thereunder.
"Existing Credit Agreement" means that certain Amended and Restated
Credit Agreement, dated as of December 20, 1999, among the Borrower, the
"Banks" identified therein and Bank of America as administrative agent.
"Existing Letters of Credit" means the Letters of Credit set forth
on Schedule 2.2 as described by date of issuance, letter of credit
number, stated amount, name of beneficiary and date of expiry.
"Extension of Credit" means, as to any Lender, the making of a Loan
by such Lender (or a participation therein by a Lender) or the issuance
of, or participation in, a Letter of Credit by such Lender.
"Facility Availability" means, as of any date of calculation, the
difference of (a) the Borrowing Base minus (b) the amount of Unsecured
Debt outstanding as of such date, including Unsecured Debt outstanding
under the Bridge Facility but excluding Loans and Letters of Credit
outstanding under this Credit Agreement.
"Facility Fees" has the meaning set forth in Section 3.4(a).
"Federal Funds Rate" means, for any day, the rate set forth in the
weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York on the
preceding Business Day opposite the caption "Federal Funds (Effective)";
or, if for any relevant day such rate is not so published on any such
preceding Business Day, the rate for such day will be the arithmetic
mean as determined by the Administrative Agent of the rates for the last
transaction in overnight Federal funds arranged prior to 9:00 a.m. (New
York City time) on that day by each of three leading brokers of Federal
funds transactions in New York City selected by the Administrative
Agent.
"Fee Letter" means that certain letter agreement, dated as of
November 13, 2000, between the Administrative Agent and the Borrower, as
amended, modified, supplemented or replaced from time to time.
"Fixed Charge Coverage Ratio" means, for any period, the ratio of
(a) Adjusted EBITDA for the twelve month period ending on such date to
(b) Actual Debt Service for the twelve month period ending on such date.
"Funds From Operations", when used with respect to any Person,
shall have the meaning given to such term in, and shall be calculated in
accordance with, standards promulgated by the National Association of
Real Estate Investment Trusts in effect from time to time.
12
18
"GAAP" means generally accepted accounting principles in the United
States applied on a consistent basis and subject to Section 1.3.
"Governmental Authority" means any Federal, state, local or
provincial court or governmental agency, authority, instrumentality or
regulatory body.
"Guarantor" means (a) each Subsidiary of the Borrower that is the
owner of a Borrowing Base Property as of the Closing Date and any other
Combined Party that owns a Borrowing Base Property as of the Closing
Date; provided that a Down-REIT shall not be required to become a
Guarantor and (b) any such Person who may from time to time execute a
Joinder Agreement (or otherwise consent in writing to becoming a
Guarantor hereunder), as required by Section 7.12 or otherwise, in each
case together with their successors and assigns.
"Guaranty Obligations" means, with respect to any Person, without
duplication, any obligations (other than endorsements in the ordinary
course of business of negotiable instruments for deposit or collection)
guaranteeing or intended to guarantee any Indebtedness of any other
Person in any manner, whether direct or indirect, and including without
limitation any obligation, whether or not contingent, (a) to purchase
any such Indebtedness or other obligation or any property constituting
security therefor, (b) to advance or provide funds or other support for
the payment or purchase of such indebtedness or obligation or to
maintain working capital, solvency or other balance sheet condition of
such other Person (including, without limitation, maintenance
agreements, comfort letters, take or pay arrangements, put agreements or
similar agreements or arrangements) for the benefit of the holder of
Indebtedness of such other Person, (c) to lease or purchase property,
securities or services primarily for the purpose of assuring the owner
of such Indebtedness or (d) to otherwise assure or hold harmless the
owner of such Indebtedness or obligation against loss in respect
thereof. The amount of any Guaranty Obligation shall be deemed equal to
the stated or determinable amount of the primary obligation in respect
of which such Guaranty Obligation is made or, if not stated or if
indeterminable, the maximum reasonably anticipated liability in respect
thereof.
"Hazardous Materials" means any substance, material or waste
defined or regulated in or under any Environmental Laws.
"Hedging Obligations" means, with respect to any Person, the net
obligations of such Person pursuant to any interest rate hedging
agreement or any foreign exchange contract, currency swap arrangement,
or other similar agreement to which such Person is a party or of which
such Person is a beneficiary.
"Income Property" means any Property for which development and
construction are complete and that satisfies the following conditions:
(a) such Property is an Unencumbered Property;
13
19
(b) such Property is (i) a multi-tenant retail shopping
center or (ii) a Big Box Facility leased to (A) Raley's or (B) a
tenant with a Debt Rating of BBB- or better from S&P and/or Baa3 or
better from Moody's;
(c) such Property is owned 100% in fee by (i) the Borrower,
(ii) a Guarantor, or (iii) a Down-REIT;
(d) there is no existing or threatened violation of any
applicable Environmental Law with respect to such Property; and
(e) at least 90% of the net rentable square footage of such
Property is leased to and occupied by tenants other than the
Combined Parties or Affiliates of the Combined Parties; provided
that such percentage may decrease to 85% (in such case, any such
Income Property may be referred to herein as a "Reduced Lease Rate
Income Property"), so long as such Reduced Lease Rate Income
Property is not a Borrowing Base Property for more than six months.
"Indebtedness" of any Person means, without duplication, subject to
Section 1.4 (a) all indebtedness for borrowed money; (b) all obligations
issued, undertaken or assumed as the deferred purchase price of property
or services (other than intercompany items or trade payables entered
into in the ordinary course of business on ordinary terms); (c) all
reimbursement or payment obligations with respect to Surety Instruments;
(d) all obligations evidenced by notes, bonds, debentures or similar
instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses; (e) all
indebtedness created or arising under any conditional sale or other
title retention agreement, or incurred as financing, in either case with
respect to property acquired by such Person (even though the rights and
remedies of the seller or bank under such agreement in the event of
default are limited to repossession or sale of such property); (f) all
obligations to purchase any materials, supplies or other property from,
or to obtain the services of, another Person if the relevant contract or
other related document or obligation requires that payment for such
materials, supplies or other property, or for such services, shall be
made regardless of whether delivery of such materials, supplies or other
property is ever made or tendered, or such services are ever performed
or tendered; (g) all Hedging Obligations; (h) the principal portion of
all obligations of such Person under (1) Capital Leases, (2) any
Synthetic Lease and (3) any forward purchase commitment or forward
equity sale, (i) all preferred stock issued by such Person and required
by the terms thereof to be redeemed, or for which mandatory sinking fund
payments are due, by a fixed date, (j) the aggregate amount of
uncollected accounts receivable of such Person subject at such time to a
sale of receivables (or similar transaction) regardless of whether such
transaction is effected without recourse to such Person or in a manner
that would not be reflected on the balance sheet of such Person in
accordance with GAAP, (k) all indebtedness referred to in clauses (a)
through (j) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien upon or in property (including accounts and
contracts rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness; and (l)
all Guaranty Obligations in
14
20
respect of indebtedness or obligations of others of the kinds referred
to in clauses (a) through (j) above. "Indebtedness" does not include,
however, security deposits, accounts payable, accrued liabilities and
any prepaid rents (as such terms are defined in accordance with GAAP).
For the purposes of calculating Indebtedness, the amount of any
contingent obligations with respect to Hedging Obligations, Surety
Instruments or other Indebtedness shall be equal to the maximum
reasonably anticipated liability in respect thereof.
"Indemnified Liabilities" has the meaning set forth in Section
11.5.
"Interest Payment Date" means (a) as to Base Rate Loans, the first
calendar day of each month and the Maturity Date, (b) as to any LIBOR
Loan having an Interest Period of one month or less, the first calendar
day of the next succeeding month following the last day of such Interest
Period and the Maturity Date and (c) as to any LIBOR Loan having an
Interest Period of more than one month, the first calendar day of each
month, the first calendar day of the next succeeding month following the
last day of such Interest Period, and the Maturity Date.
"Interest Period" means, as to LIBOR Loans, a period of seven days
or a period of one, two, three, four or six months' duration as the
Borrower may elect, commencing, in each case, on the date of the
borrowing (including continuations and conversions thereof); provided,
however, (a) no Interest Period shall end on a day which is not a
Business Day, and (b) no Interest Period shall extend beyond the
Maturity Date.
"Investment" in any Person means (a) the acquisition (whether for
cash, property, services, assumption of Indebtedness, securities or
otherwise) of assets, (including, without limitation, raw land,
non-retail properties and minority interests in joint ventures) Capital
Stock, bonds, notes, debentures or other securities of such other
Person, (b) any deposit with, or advance, loan or other extension of
credit to, such Person (other than deposits made in connection with the
purchase of equipment or other assets in the ordinary course of
business) or (c) any other capital contribution to or investment in such
Person, including, without limitation, any Guaranty Obligation
(including any support for a letter of credit issued on behalf of such
Person) incurred for the benefit of such Person; provided that
Investment shall not include any retail property that is a neighborhood
retail shopping center.
"IRS" means the Internal Revenue Service of the United States of
America, or any successor agency thereof.
"Issuing Lender" means Bank of America, any successor
Administrative Agent or any other Lender designated by the
Administrative Agent.
"Issuing Lender Fees" has the meaning set forth in Section
3.4(b)(ii).
"Joinder Agreement" means a Joinder Agreement substantially in the
form of Exhibit 7.12.
15
21
"Lender" means any of the Persons identified as a "Lender" on the
signature pages hereto, and any Person which may become a Lender by way
of assignment in accordance with the terms hereof, together with their
successors and permitted assigns.
"Lending Office" means, as to any Lender, the office or offices of
such Lender described as such on Schedule 11.1, or such other office or
offices as a Lender may from time notify to the Borrower and the
Administrative Agent.
"Letter of Credit" means a letter of credit issued for the account
of the Borrower by the Issuing Lender pursuant to Section 2.2 or any
Existing Letter of Credit, as such letter of credit may be amended,
modified, extended, renewed or replaced.
"Letter of Credit Fees" has the meaning set forth in Section
3.4(b)(i).
"Leverage Ratio" means the ratio of (a) total Indebtedness of the
Consolidated Group to (b) Total Assets.
"LIBOR Banking Day" means any Business Day on which banks are open
for business in London, England.
"LIBOR Base Rate" means the offered rate (determined solely by the
Administrative Agent) for a period of time comparable to the number of
days in the applicable Interest Period for deposits in Dollars, as shown
on Telerate Page 3750 as of 11:00 a.m. London time two LIBOR Banking
Days prior to the first day of the applicable Interest Period, or if
Telerate Page 3750 is unavailable, the rate for such deposits determined
by the Administrative Agent at such time based on such other published
service of general application as shall be selected by the
Administrative Agent for such purpose. The determination of the LIBOR
Base Rate by the Administrative Agent shall be conclusive in the absence
of manifest error. "Telerate Page 3750" means the display designated as
such on Teleratesystem Incorporated (or such other page as may replace
page 3750 on that service for the purpose of displaying London interbank
offered rates of major banks for Dollar deposits).
"LIBOR Loan" means a Loan bearing interest based at a rate
determined by reference to the Adjusted LIBOR Rate.
"LIBOR Rate" means, for each LIBOR Loan comprising part of the same
borrowing (including conversions, extensions and renewals), a per annum
interest rate determined pursuant to the following formula:
LIBOR Rate = LIBOR Base Rate
----------------------------
1 - LIBOR Reserve Percentage
"LIBOR Reserve Percentage" means the total of the maximum reserve
percentages for determining the reserves to be maintained by member
banks of the Federal Reserve
16
22
System for Eurocurrency Liabilities, as defined in Regulation D. The
Reserve Percentage shall be expressed as a decimal and rounded upward,
if necessary, to the nearest 1/100th of one percent, and shall include
marginal, emergency, supplemental, special and other reserve
percentages.
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, security interest, encumbrance, lien (statutory or
otherwise), preference, priority or charge of any kind, including,
without limitation, any agreement to give any of the foregoing, any
conditional sale or other title retention agreement, and any lease in
the nature thereof.
"Loans" means the revolving loans made to the Borrower pursuant to
Section 2.1.
"LOC Documents" means, with respect to any Letter of Credit, such
Letter of Credit, any amendments thereto, any documents delivered in
connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in
application or applicable only to such Letter of Credit) governing or
providing for (a) the rights and obligations of the parties concerned or
at risk or (b) any collateral security for such obligations.
"LOC Obligations" means, at any time, the sum of (a) the maximum
amount which is, or at any time thereafter may become, available to be
drawn under Letters of Credit then outstanding, assuming compliance with
all requirements for drawings referred to in such Letters of Credit plus
(b) the aggregate amount of all drawings under Letters of Credit honored
by an Issuing Lender but not theretofore reimbursed.
"LOC Participants" means the Lenders.
"Mandatory Borrowing" has the meaning set forth in Section 2.2(e).
"Margin Increase" means, with respect to any Loan, the Applicable
Percentage plus one-quarter of one percent (.25%).
"Material Adverse Effect" means (a) a material adverse change in or
effect upon the operations, business, properties, condition (financial
or otherwise) or prospects of the Consolidated Group, taken as a whole,
(b) a material impairment of the ability of a Credit Party to perform
its respective obligations under this Credit Agreement or any of the
other Credit Documents, or (c) a material adverse effect upon the
legality, validity, binding effect or enforceability against the Credit
Parties of this Credit Agreement or any of the other Credit Documents.
"Maturity Date" means January 1, 2004.
"Minority Interests" means interests owned by Persons (other than a
member of the Consolidated Group) in a Subsidiary of the Borrower in
which less than 100% of the Capital Stock is owned by the members of the
Consolidated Group.
17
23
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., or any successor
or assignee of the business of such company in the business of rating
securities.
"Multiemployer Plan" means a Plan which is a multiemployer plan as
defined in Sections 3(37) or 4001(a)(3) of ERISA.
"Multiple Employer Plan" means a Plan covered by Title IV of ERISA
(other than a Multiemployer Plan) in which a member of the Consolidated
Group or any ERISA Affiliate and at least one employer other than a
member of the Consolidated Group or any ERISA Affiliate are contributing
sponsors.
"Net Cash Proceeds" means the gross cash proceeds received from an
Asset Disposition, Public Debt Issuance, Equity Issuance or Refinancing,
in each case net of actual transaction costs paid or payable to third
parties.
"Net Operating Income" or "NOI" means, for any Property, subject to
Section 1.4, as of any date and calculated on a cash basis, (a) the
gross rental income of such Property for the immediately preceding four
consecutive calendar quarters, minus (b) the aggregate amount of all
actual operating expenses (excluding Capital Expenditures) for such
Property during such period, minus (c) imputed Capital Expenditures in
an amount equal to the greater of (i) the product of (A) the monthly
weighted average net rentable square footage of such Property for such
period times (B) $0.25 and (ii) the aggregate amount of all Capital
Expenditures for such Property during such period; provided that, with
respect to any Property owned by a Down-REIT, NOI for such Property
owned by such Down-REIT for the purposes of calculating the Borrowing
Base shall be NOI multiplied by the Borrower's percentage ownership
interest in the applicable Down-REIT.
In the event the Administrative Agent receives operating statements
covering only a portion of the relevant four calendar quarter period
(due to the fact that the Property has been owned for less than four
calendar quarters), the Administrative Agent shall calculate Net
Operating Income for such Property based on an annualization of the
operating statements which have been provided, subject to such
adjustments as the Administrative Agent deems appropriate in its sole
discretion to accurately reflect anticipated annualized operating
results. In the event (a) the Borrower has, within the two calendar
quarters preceding the date of calculation, completed the build-out of
additional in-line shop space or pad space on any Property, (b) such
additional space has been leased to tenants who have commenced paying
rent, are in occupancy and have opened for business in such space, and
(c) the Administrative Agent determines that, as a result of the leasing
of such additional space, annual Net Operating Income for such Property
will increase by at least $250,000 for the following year, then Net
Operating Income for such Property shall be calculated based upon the
operating statement for such Property covering the most recently
completed calendar quarter, subject to such adjustments as the
Administrative Agent deems appropriate in its sole discretion to
accurately reflect anticipated annualized operating results. In
addition, the Administrative Agent may, in its sole discretion, reduce
the Net Operating Income for any Property by the amount of rents
attributable to
18
24
any leases (i) which are in default or which have terminated or are
otherwise no longer in effect, or (ii) which are otherwise unacceptable
to the Administrative Agent in its sole discretion.
For the purposes of calculating Net Operating Income for any
Property acquired by a Combined Party as a result of the Western
Acquisition, such Property shall be deemed to have been owned by such
Combined Party for a period equal to (A) the amount of time Western or
one of its Subsidiaries owned such Property prior to the Western
Acquisition plus (B) the amount of time such Property has been owned by
a Combined Party following the Western Acquisition.
"Note" or "Notes" means the promissory notes of the Borrower in the
form of Exhibit 2.1(g) in favor of each of the Lenders evidencing the
Loans, individually or collectively, as appropriate, as such promissory
notes may be amended, modified, supplemented, extended, renewed or
replaced from time to time.
"Note Receivables" means any receivables owed to a member of the
Consolidated Group other than accounts receivable in the ordinary
course.
"Notice of Borrowing" means a request by the Borrower for a Loan,
in the form of Exhibit 2.1(b).
"Notice of Continuation/Conversion" means a request by the Borrower
to continue an existing LIBOR Loan to a new Interest Period or to
convert a LIBOR Loan to a Base Rate Loan or to convert a Base Rate Loan
to a LIBOR Loan, in the form of Exhibit 2.1(e).
"Obligations" means, without duplication, all of the obligations of
the Credit Parties to the Lenders, the Issuing Lender and the
Administrative Agent, whenever arising, under this Credit Agreement, the
Notes, or any of the other Credit Documents to which a Credit Party is a
party.
"Other Taxes" has the meaning set forth in Section 3.13(b).
"Participation Interest" means the Extension of Credit by a Lender
by way of a purchase of a participation in any Loans as provided in
Section 3.8 or in any Letters of Credit or unreimbursed drawings
thereunder as provided in Section 2.2.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA and any successor thereto.
"Person" means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust, REIT or
other enterprise (whether or not incorporated), or any Governmental
Authority.
"Plan" means any employee benefit plan (as defined in Section 3(3)
of ERISA) which is covered by ERISA and with respect to which a member
of the Consolidated Group
19
25
or any ERISA Affiliate is (or, if such plan were terminated at such
time, would under Section 4069 of ERISA be deemed to be) an "employer"
within the meaning of Section 3(5) of ERISA.
"Plaza Escuela Note Receivable" means the account receivable of the
Borrower evidenced by the promissory note of Plaza Escuela, LLC, dated
as of December 31, 1999, in favor of Western and acquired by the
Borrower pursuant to the Western Acquisition.
"Pledge Agreement" means that certain Pledge Agreement dated as of
the Closing Date, executed by the Borrower in favor of the
Administrative Agent, for the benefit of the Lenders.
"Prime Rate" means the per annum rate of interest established from
time to time by the Administrative Agent at its principal office in
Charlotte, North Carolina as its "prime rate". Any change in the
interest rate resulting from a change in the Prime Rate shall become
effective as of 12:01 a.m. of the Business Day on which each change in
the Prime Rate is announced by the Administrative Agent. The Prime Rate
is a rate set by Bank of America based upon various factors, including
Bank of America's costs and desired return, general economic conditions
and other factors, and is used as a reference point for pricing some
loans, which may be priced at, above, or below such announced rate. Any
change in such rate announced by Bank of America shall take effect at
the opening of business on the day specified in the public announcement
of such change.
"Properties" means all real properties owned by the Combined
Parties.
"Public Debt Issuance" means the issuance of any Indebtedness for
borrowed money by a member of the Consolidated Group, pursuant to a
public debt offering.
"Raley's" means Raley's, a California corporation.
"Reduced Lease Rate Income Property" has the meaning set forth in
the definition of "Income Property" in this Section 1.1.
"Refinancing" means the incurrence of Indebtedness permitted
hereunder in connection with the financing or refinancing of assets of
any member of the Consolidated Group.
"Register" has the meaning set forth in Section 11.3(c).
"Regulation A, D, T, U or X" means Regulation A, D, O, T, U or X,
respectively, of the Board of Governors of the Federal Reserve System as
from time to time in effect and any successor to all or a portion
thereof.
"REIT" means a real estate investment trust as defined in Sections
856-860 of the Code.
20
26
"Reportable Event" means any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the notice
requirement has been waived by regulation or by the PBGC.
"Required Lenders" means the Administrative Agent together with the
Lenders whose aggregate Credit Exposure (as hereinafter defined)
constitutes more than 66-2/3 % of the Credit Exposure of all Lenders at
such time; provided, however, that if any Lender shall be a Defaulting
Lender at such time then there shall be excluded from the determination
of Required Lenders the aggregate principal amount of Credit Exposure of
such Lender at such time. For purposes of the preceding sentence, the
term "Credit Exposure" as applied to each Lender shall mean (a) at any
time prior to the termination of the Commitments, the Commitment of such
Lender and (b) at any time after the termination of the Commitments, the
sum of (i) the principal balance of the outstanding Loans of such Lender
plus (ii) such Lender's Participation Interests in the stated amount of
the outstanding Letters of Credit.
"Requirement of Law" means, as to any Person, the articles or
certificate of incorporation and by-laws or other organizational or
governing documents of such Person, and any law, treaty, rule or
regulation or final, non-appealable determination of an arbitrator or a
court or other Governmental Authority, in each case applicable to or
binding upon such Person or to which any of its material property is
subject.
"Revolving Committed Amount" means THREE HUNDRED MILLION DOLLARS
($300,000,000), as the same may be increased pursuant to Section 2.1(h)
or reduced pursuant to Section 2.1(d).
"S&P" means Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc., or any successor or assignee of the business of such
division in the business of rating securities.
"Secured Debt" means all Indebtedness of the Consolidated Group
that is secured by a Lien in favor of the creditor holding such
Indebtedness; provided that any Indebtedness owed to the Lenders
hereunder shall be considered to be Unsecured Debt even if a Lien has
been granted in favor of the Lenders.
"Secured Debt Ratio" means the ratio of (a) Secured Debt to (b)
Aggregate Adjusted Current Value.
"Securities Act" means the Securities Act of 1933, as amended,
modified, succeeded or replaced from time to time, and the rules and
regulations promulgated thereunder.
"Senior Notes" means (a) those certain senior, unsecured 7.78%
notes due 2004, in the aggregate principal amount of $50,000,000, issued
by Western pursuant to that certain Indenture, dated as of February 24,
1994, between Western and ▇▇▇▇▇▇▇'▇ Trust Company, as trustee and (b)
those certain senior, unsecured 7.1%, 7.2% and 7.3% notes due 2006, 2008
and 2010, respectively, in the aggregate principal amount of
$75,000,000, issued by Western pursuant to that certain Indenture, dated
as of September 1, 1997, between Western
21
27
and The Bank of New York, as trustee.
"Significant Acquisition" means the acquisition by any Credit Party
of (a) all of the assets or Capital Stock of a Person or (b) a Property
or portfolio of Properties, in each case where the purchase price of
such assets, Capital Stock, Property or Properties exceeds 15% of "total
assets" of the Consolidated Group, as determined in accordance with
GAAP, as calculated immediately prior to such acquisition; provided that
the Western Acquisition shall not be considered a Significant
Acquisition.
"Single Employer Plan" means any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan or a Multiple Employer
Plan.
"Solvent" means, with respect to any Person as of a particular
date, that on such date (a) such Person is able to pay its debts and
other liabilities, contingent obligations and other commitments as they
mature in the normal course of business, (b) such Person does not intend
to, and does not believe that it will, incur debts or liabilities beyond
such Person's ability to pay as such debts and liabilities mature in
their ordinary course, (c) such Person is not engaged in a business or a
transaction, and is not about to engage in a business or a transaction,
for which such Person's assets would constitute unreasonably small
capital after giving due consideration to the prevailing practice in the
industry in which such Person is engaged or is to engage, (d) the fair
value of the assets of such Person is greater than the total amount of
liabilities, including, without limitation, contingent liabilities, of
such Person and (e) the present fair saleable value of the assets of
such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute
and matured. In computing the amount of contingent liabilities at any
time, it is intended that such liabilities will be computed at the
amount which, in light of all the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"Subsidiary" means, as to any Person, any corporation, partnership,
association, joint venture, limited liability company, real estate
investment or other trust or other entity more than 50% of whose Voting
Stock (irrespective of whether or not at the time, any such Voting Stock
shall have or might have voting power or control by reason of the
happening of any contingency) is at the time owned by such Person
directly or indirectly through Subsidiaries.
"Surety Instruments" means all letters of credit (including standby
and commercial), banker's acceptances, bank guaranties, shipside bonds,
surety bonds and similar instruments.
"Synthetic Lease" means any synthetic lease, tax retention
operating lease, off-balance sheet loan or similar off-balance sheet
financing product where such transaction is considered borrowed money
indebtedness for tax purposes but is classified as an operating lease in
accordance with GAAP.
"Taxes" has the meaning set forth in Section 3.13(a).
22
28
"Total Assets" means, as of any date of calculation, without
duplication, subject to Section 1.4, the sum of (a) the Aggregate
Adjusted Current Value plus (b) all cash and Cash Equivalents of the
Consolidated Group plus (c) provided that no default has occurred and is
continuing under the Plaza Escuela Note Receivable, the outstanding
principal balance of the Plaza Escuela Note Receivable plus (d) all cash
Investments as of such date by any member of the Consolidated Group in
any Properties currently under development.
"Unencumbered Debt Service Coverage Ratio" means the ratio of (a)
the aggregate amount of NOI with respect to all Unencumbered Properties
for the prior twelve month period to (b) Actual Debt Service with
respect to Unsecured Debt for the prior twelve month period.
"Unencumbered Properties" means all Properties that are not subject
to a Lien other than (a) nonconsensual Liens of the type described in
Section 8.2(a)(i) and (ii) and (b) Liens in favor of the Lenders.
"Unsecured Debt" means the sum of all Indebtedness of the
Consolidated Group that was incurred, and continues to be outstanding,
without granting a Lien to the creditor holding such Indebtedness;
provided that all Indebtedness of the Consolidated Group owing to the
Lenders under this Credit Agreement shall be considered to be Unsecured
Debt even if a Lien has been granted in favor of the Lenders.
"Unsecured Debt Ratio" means the ratio of (a) Unsecured Debt to (b)
the Adjusted Current Values of all Unencumbered Properties.
"Voting Stock" means (a) with respect to a corporation, all classes
of the Capital Stock of such corporation then outstanding and normally
entitled to vote in the election of directors and (b) with respect to a
partnership, association, joint venture, limited liability company, real
estate investment or other trust or other entity, all Capital Stock of
such entity entitled to exercise voting power or management control.
"Western" means Western Properties Trust, a California real estate
investment trust.
"Western Acquisition" means the merger of Western with and into the
Borrower pursuant to that certain Agreement and Plan of Merger, dated as
of August 21, 2000, between the Borrower and Western, as such Agreement
and Plan of Merger may be amended or modified.
"Western Mortgage" means that certain Deed of Trust, Assignment of
Rents and Security Agreement, dated as of April 15, 1994, of the
Property known as Lakewood Village Shopping Center, located in Windsor,
California, granted by LVI Partners, as trustor, to North Bay Title
Company, as trustee, for the benefit of Lincoln National Life Insurance
Company, as beneficiary.
23
29
1.2 COMPUTATION OF TIME PERIODS AND OTHER DEFINITION PROVISIONS.
For purposes of computation of periods of time hereunder, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding." References in this Credit Agreement to "Articles", "Sections",
"Schedules" or "Exhibits" shall be to Articles, Sections, Schedules or Exhibits
of or to this Credit Agreement unless otherwise specifically provided.
1.3 ACCOUNTING TERMS.
Except as otherwise expressly provided herein, all accounting terms used
herein shall be interpreted, and all financial statements and certificates and
reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis. All financial statements delivered to the Lenders hereunder shall be
accompanied by a statement from the Borrower that GAAP has not changed since the
most recent financial statements delivered by the Borrower to the Lenders or if
GAAP has changed describing such changes in detail and explaining how such
changes affect the financial statements. All calculations made for the purposes
of determining compliance with this Credit Agreement shall (except as otherwise
expressly provided herein) be made by application of GAAP applied on a basis
consistent with the most recent annual or quarterly financial statements
delivered pursuant to Section 7.1 (or, prior to the delivery of the first
financial statements pursuant to Section 7.1, consistent with the financial
statements described in Section 5.1(d)); provided, however, if (a) the Borrower
shall object to determining such compliance on such basis at the time of
delivery of such financial statements due to any change in GAAP or the rules
promulgated with respect thereto or (b) the Administrative Agent or the Required
Lenders shall so object in writing within 60 days after delivery of such
financial statements (or after the Lenders have been informed of the change in
GAAP affecting such financial statements, if later), then such calculations
shall be made on a basis consistent with the most recent financial statements
delivered by the Borrower to the Lenders as to which no such objection shall
have been made.
1.4 JOINT VENTURE INVESTMENTS.
With respect to any ownership of a Property by a member of the
Consolidated Group through an entity that is not wholly-owned, directly or
indirectly by the Borrower, (a) Actual Debt Service, Adjusted EBITDA,
Consolidated Interest Expense, Consolidated Net Income, NOI and Total Assets
shall be calculated in accordance with such member of the Consolidated Group's
ownership interest in such Person and (b) Indebtedness shall be calculated as
follows: (i) if the Indebtedness of such Person is recourse to such member of
the Consolidated Group, then the amount of such Indebtedness that is recourse to
such member of the Consolidated Group, and (ii) if the Indebtedness of such
Person is not recourse to such member of the Consolidated Group, then such
member of the Consolidated Group's pro rata interest in such Indebtedness.
1.5 TIME.
All references to time herein shall be references to Pacific Standard
Time or Pacific Daylight Time, as the case may be, unless specified otherwise.
24
30
SECTION 2
CREDIT FACILITY
2.1 LOANS.
(a) Loan Commitment. Subject to the terms and conditions set forth
herein, each Lender severally agrees to make revolving loans (each a
"Loan" and collectively the "Loans") to the Borrower, in Dollars, at any
time and from time to time, during the period from and including the
Effective Date to but not including the Maturity Date or such earlier
date if the Revolving Committed Amount has been terminated as provided
herein; provided, however, that (i) the sum of the aggregate principal
amount of Loans outstanding plus the aggregate amount of LOC Obligations
outstanding shall not exceed the lesser of (A) the Revolving Committed
Amount and (B) Facility Availability, (ii) with respect to each
individual Lender, the Lender's pro rata share of outstanding Loans plus
such Lender's pro rata share of outstanding LOC Obligations shall not
exceed such Lender's Commitment. Subject to the terms of this Credit
Agreement, the Borrower may borrow, repay and reborrow Loans.
(b) Method of Borrowing for Loans. By no later than 9:00 a.m. (i)
one Business Day prior to the date of the requested borrowing of Loans
that will be Base Rate Loans or (ii) three Business Days prior to the
date of the requested borrowing of Loans that will be LIBOR Loans, the
Borrower shall submit a written Notice of Borrowing in the form of
Exhibit 2.1(b) to the Administrative Agent setting forth (A) the amount
requested, (B) whether such Loans shall be Base Rate Loans or LIBOR
Loans, (C) with respect to Loans that will be LIBOR Loans, the Interest
Period applicable thereto and (D) certification that the Borrower has
complied in all respects with Section 5.2. If the Borrower shall fail to
specify (x) an Interest Period in the case of a LIBOR Loan, then such
LIBOR Loan shall be deemed to have an Interest Period of one month or
(y) the type of Revolving Loan requested, then such Revolving Loan shall
be deemed to be a Base Rate Loan.
(c) Funding of Loans. Upon receipt of a Notice of Borrowing, the
Administrative Agent shall promptly inform the Lenders as to the terms
thereof. Each Lender shall make its Commitment Percentage of the
requested Loans available to the Administrative Agent by 11:00 a.m. on
the date specified in the Notice of Borrowing by deposit, in Dollars, of
immediately available funds at the Agency Services Address. The amount
of the requested Loans will then be made available to the Borrower by
the Administrative Agent by crediting the account of the Borrower on the
books of such office of the Administrative Agent, to the extent the
amount of such Loans are made available to the Administrative Agent.
No Lender shall be responsible for the failure or delay by any
other Lender in its obligation to make Loans hereunder; provided,
however, that the failure of any Lender to fulfill its obligations
hereunder shall not relieve any other Lender of its obligations
hereunder. Unless the Administrative Agent shall have been notified by
any Lender prior to
25
31
the date of any such Loan that such Lender does not intend to make
available to the Administrative Agent its portion of the Loans to be
made on such date, the Administrative Agent may assume that such Lender
has made such amount available to the Administrative Agent on the date
of such Loans, and the Administrative Agent in reliance upon such
assumption, may (in its sole discretion but without any obligation to do
so) make available to the Borrower a corresponding amount. If such
corresponding amount is not in fact made available to the Administrative
Agent, the Administrative Agent shall be able to recover such
corresponding amount from such Lender. If such Lender does not pay such
corresponding amount forthwith upon the Administrative Agent's demand
therefor, the Administrative Agent will promptly notify the Borrower,
and the Borrower shall immediately pay such corresponding amount to the
Administrative Agent. The Administrative Agent shall also be entitled to
recover from the Lender or the Borrower, as the case may be, interest on
such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Administrative Agent to
the Borrower to the date such corresponding amount is recovered by the
Administrative Agent at a per annum rate equal to (i) from the Borrower
at the applicable rate for such Loan pursuant to the Notice of Borrowing
and (ii) from a Lender at the Federal Funds Rate.
(d) Reduction or Termination of Revolving Committed Amount. Upon at
least three Business Days' notice, the Borrower shall have the right to
terminate or reduce the aggregate unused amount of the Revolving
Committed Amount at any time or from time to time; provided that (i)
each partial reduction shall be in an aggregate amount at least equal to
$5,000,000 and in integral multiples of $1,000,000 above such amount and
(ii) no reduction shall be made which would reduce the Revolving
Committed Amount to an amount less than the aggregate amount of
outstanding Loans plus the aggregate amount of outstanding LOC
Obligations. Any reduction in (or termination of) the Revolving
Committed Amount may not be reinstated except as permitted by Section
2.1(h). The Administrative Agent shall immediately notify the Lenders of
any reduction in the Revolving Committed Amount.
(e) Continuations and Conversions. The Borrower shall have the
option, on any Business Day, to continue existing LIBOR Loans for a
subsequent Interest Period, to convert Base Rate Loans into LIBOR Loans,
or to convert LIBOR Loans into Base Rate Loans; provided, however, that
(i) each such continuation or conversion must be requested by the
Borrower pursuant to a written Notice of Continuation/Conversion, in the
form of Exhibit 2.1(e), in compliance with the terms set forth below,
(ii) except as provided in Section 3.11, LIBOR Loans may only be
continued or converted on the last day of the Interest Period applicable
thereto, (iii) LIBOR Loans may not be continued nor may Base Rate Loans
be converted into LIBOR Loans during the existence and continuation of a
Default or Event of Default, (iv) any request to continue a LIBOR Loan
that fails to comply with the terms hereof or any failure to request a
continuation of a LIBOR Loan at the end of an Interest Period shall
result in a conversion of such LIBOR Loan to a Base Rate Loan on the
last day of the applicable Interest Period and (v) any request for
continuation of a LIBOR Loan which shall fail to specify an Interest
Period shall be deemed to be a request for an Interest Period of one
month. Each continuation or conversion must be requested by the Borrower
no later than 9:00 a.m. (A) one Business Day prior to the date for a
requested
26
32
conversion of a LIBOR Loan to a Base Rate Loan or (B) three Business
Days prior to the date for a requested continuation of a LIBOR Loan or
conversion of a Base Rate Loan to a LIBOR Loan, in each case pursuant to
a written Notice of Continuation/Conversion submitted to the
Administrative Agent which shall set forth (x) whether the Borrower
wishes to continue or convert such Loans and (y) if the request is to
continue a LIBOR Loan or convert a Base Rate Loan to a LIBOR Loan, the
Interest Period applicable thereto.
(f) Minimum Amounts/Restrictions on Loans. Each request for a
borrowing, conversion or continuation shall be subject to the
requirements that (i) each LIBOR Loan shall be in a minimum amount of
$1,500,000 and in integral multiples of $100,000 in excess thereof, (ii)
each Base Rate Loan shall be in a minimum amount of $250,000 (and
integral multiples of $100,000 in excess thereof) or the remaining
amount available under the Revolving Committed Amount and (iii) no more
than seven LIBOR Loans shall be outstanding at any one time. For the
purposes of this Section 2.1(f), all LIBOR Loans with the same Interest
Periods beginning on the same date shall be considered as one LIBOR
Loan, but LIBOR Loans with different Interest Periods, even if they
begin on the same date, shall be considered as separate LIBOR Loans.
(g) Notes. The Loans made by each Lender shall be evidenced by a
duly executed promissory note of the Borrower to each Lender in
substantially the form of Exhibit 2.1(g).
(h) Increase of Revolving Committed Amount. No later than 90 days
prior to the Maturity Date and upon at least 15 days' prior written
notice to the Administrative Agent (which notice shall be promptly
transmitted by the Administrative Agent to each Lender), the Borrower
shall have the right to increase the Revolving Committed Amount;
provided that the ability of the Borrower to effect such increase shall
be subject to the following terms and conditions:
(i) such increase must be in a minimum amount of $10,000,000
and in integral multiples of $5,000,000 above the then existing
Revolving Committed Amount;
(ii) the Revolving Committed Amount may not be increased to
an amount greater than FOUR HUNDRED MILLION DOLLARS ($400,000,000);
(iii) any such increase in the Revolving Committed Amount
shall be applied, at the option of the Borrower, to (A) upon one or
more existing Lenders' written consent, the Commitment of such
existing Lenders and/or (B) one or more institutions that is not an
existing Lender (each, a "New Lender"); provided that (x) each New
Lender is an Eligible Assignee and (y) if applicable, such New
Lender becomes a Lender hereunder pursuant to the execution and
delivery of an appropriate joinder agreement or of counterparts to
this Credit Agreement in a manner acceptable to the Borrower and
the Administrative Agent;
(iv) if any Loans are outstanding at the time of the
increase in the
27
33
Revolving Committed Amount, the Borrower shall, if applicable,
prepay one or more existing Loans (such prepayment to be subject to
Section 3.14) in an amount necessary such that after giving effect
to the increase in the Revolving Committed Amount, each Lender will
hold its pro rata share (based on its Commitment Percentage of the
increased Revolving Committed Amount) of outstanding Loans;
(v) the Borrower shall execute and deliver such Note(s) in
favor of any New Lenders as are necessary;
(vi) Schedule 1.1(a) hereto shall be amended to reflect the
revised Commitment Percentages and Commitments of the Lenders; and
(vii) the Borrower shall pay such fees to the Administrative
Agent, for the benefit of the Lenders providing such additional
commitments, as determined at the time of such increase.
2.2 LETTER OF CREDIT SUBFACILITY.
(a) Issuance. Subject to the terms and conditions hereof and of the
LOC Documents and any other terms and conditions which the Issuing
Lender may require (so long as such terms and conditions do not impose
any financial obligation on or require any Lien (not otherwise
contemplated by this Credit Agreement) to be given by any Credit Party
or conflict with any obligation of, or detract from any action which may
be taken by, any Credit Party under this Credit Agreement), the Issuing
Lender agrees, in reliance upon the agreements of the other Lenders set
forth in this Section 2.2, from time to time, upon the request of the
Borrower, in substantially the form of Exhibit 2.2, to issue (from the
Effective Date to 60 days prior to the Maturity Date), in a form
acceptable to the Issuing Lender, in Dollars, and the LOC Participants
shall participate in, Letters of Credit for the account of the Borrower;
provided, however, that (i) the aggregate amount of LOC Obligations
shall not at any time exceed FIFTEEN MILLION DOLLARS ($15,000,000), (ii)
the sum of the aggregate amount of LOC Obligations outstanding plus
Loans outstanding shall not exceed the Revolving Committed Amount and
(iii) with respect to each individual LOC Participant, the LOC
Participant's pro rata share of outstanding Loans plus its pro rata
share of outstanding LOC Obligations shall not exceed such LOC
Participant's Commitment. The Issuing Lender may require the issuance
and expiry date of each Letter of Credit to be a Business Day. Except as
otherwise expressly agreed upon by all the LOC Participants, no Letter
of Credit shall have an original expiry date more than one year from the
date of issuance or shall have an expiry date beyond the date 60 days
prior to the Maturity Date. Each Letter of Credit (A) shall comply with
the related LOC Documents (B) shall be deemed to remain outstanding
until it has expired or the original documents evidencing such Letter of
Credit have been returned to the Issuing Lender and (z) shall be either
(x) a standby letter of credit issued to support the obligations
(including pension or insurance obligations), contingent or otherwise,
of a member of the Combined Group, or (y) a commercial letter of credit
in respect of the purchase of goods or services by a member of the
Combined Group in the ordinary course of business.
28
34
The Issuing Lender shall be under no obligation to issue any Letter
of Credit if (1) any order, judgment or decree of any Governmental
Authority or arbitrator shall by its terms purport to enjoin or restrain
the Issuing Lender from issuing such Letter of Credit, or any
Requirement of Law applicable to the Issuing Lender or any request or
directive (whether or not having the force of law) from any Governmental
Authority with jurisdiction over the Issuing Lender shall prohibit, or
request that the Issuing Lender refrain from, the issuance of letters of
credit generally or such Letter of Credit in particular or shall impose
upon the Issuing Lender with respect to such Letter of Credit any
restriction, reserve or capital requirement (for which the Issuing
Lender is not otherwise compensated hereunder) not in effect on the
Closing Date, or shall impose upon the Issuing Lender any unreimbursed
loss, cost or expense which was not applicable on the Closing Date and
which the Issuing Lender in good ▇▇▇▇▇ ▇▇▇▇▇ material to it or (2) the
issuance of such letter of Credit would violate one or more policies of
the Issuing Lender.
(b) Notice and Reports. The request for the issuance of a Letter of
Credit shall be submitted to the Issuing Lender at least three Business
Days prior to the requested date of issuance, or such shorter period as
may be agreed to in writing by the Issuing Lender. The Issuing Lender
will, at least quarterly and more frequently upon request, provide to
the Administrative Agent for dissemination to the Lenders a detailed
report specifying the Letters of Credit which are then issued and
outstanding and any activity with respect thereto which may have
occurred since the date of the prior report, and including therein,
among other things, the account party, the beneficiary, the stated
amount, and the expiry date as well as any payments or expirations which
may have occurred. The Issuing Lender will further provide to the
Administrative Agent, promptly upon request, copies of the Letters of
Credit and the other LOC Documents.
(c) Participations.
(i) Each LOC Participant acknowledges and confirms that, as
of the Effective Date, it automatically has a Participation
Interest in the liability of the Issuing Lender under each Existing
Letter of Credit in an amount equal to its Commitment Percentage of
such Existing Letters of Credit. The Credit Parties' reimbursement
obligations in respect of each Existing Letter of Credit, and each
LOC Participant's obligations in connection therewith, shall be
governed by the terms of this Credit Agreement.
(ii) Each LOC Participant, upon issuance of a Letter of
Credit, shall be deemed to have purchased without recourse a risk
participation from the Issuing Lender in such Letter of Credit and
each LOC Document related thereto and the rights and obligations
arising thereunder and any collateral relating thereto, in each
case in an amount equal to its Commitment Percentage of the
obligations under such Letter of Credit, and shall absolutely,
unconditionally and irrevocably assume, as primary obligor and not
as surety, and be obligated to pay to the Issuing Lender therefor
and discharge when due, its Commitment Percentage of the
obligations arising under such Letter of Credit. Without limiting
the scope and nature of each
29
35
LOC Participant's participation in any Letter of Credit, to the
extent that the Issuing Lender has not been reimbursed as required
hereunder or under any such Letter of Credit, each such LOC
Participant shall pay to the Administrative Agent its Commitment
Percentage of such unreimbursed drawing in same day funds on the
day of notification by the Issuing Lender of an unreimbursed
drawing pursuant to the provisions of subsection (d) or (e) hereof.
The obligation of each LOC Participant to so reimburse the Issuing
Lender shall be absolute and unconditional and shall not be
affected by the occurrence of a Default, an Event of Default or any
other occurrence or event. Any such reimbursement shall not relieve
or otherwise impair the obligation of the Borrower to reimburse the
Issuing Lender under any Letter of Credit, together with interest
as hereinafter provided.
(d) Reimbursement. In the event of any drawing under any Letter of
Credit, the Issuing Lender will promptly notify the Borrower. Unless the
Borrower shall promptly notify the Issuing Lender of its intent to
otherwise reimburse the Issuing Lender, the Borrower shall be deemed to
have requested a Loan at a per annum rate equal to the rate for Base
Rate Loans in the amount of the drawing, the proceeds of which will be
used to satisfy the reimbursement obligations. The Borrower shall
reimburse the Issuing Lender on the day of drawing under any Letter of
Credit either with the proceeds of such Loan obtained hereunder or
otherwise in same day funds as provided herein or in the LOC Documents.
If the Borrower shall fail to reimburse the Issuing Lender as provided
hereinabove, the unreimbursed amount of such drawing shall bear interest
at a per annum rate equal to the rate for Base Rate Loans plus two
percent (2%). The Borrower's reimbursement obligations hereunder shall
be absolute and unconditional under all circumstances irrespective of
(but without waiver of) any rights of set-off, counterclaim or defense
to payment the applicable account party or the Borrower may claim or
have against an Issuing Lender, the Administrative Agent, the Lenders,
the beneficiary of the Letter of Credit drawn upon or any other Person,
including without limitation, any defense based on any failure of the
applicable account party or the Borrower to receive consideration or the
legality, validity, regularity or unenforceability of the Letter of
Credit. The Issuing Lender will promptly notify the LOC Participants of
the amount of any unreimbursed drawing and each LOC Participant shall
promptly pay to the Issuing Lender, in Dollars and in immediately
available funds, the amount of such LOC Participant's Commitment
Percentage of such unreimbursed drawing. Such payment shall be made on
the day such notice is received by such Lender from the Issuing Lender
if such notice is received at or before 9:00 a.m., otherwise such
payment shall be made at or before 11:00 a.m. on the Business Day next
succeeding the day such notice is received. If such LOC Participant does
not pay such amount to the Issuing Lender in full upon such request,
such LOC Participant shall, on demand, pay to the Issuing Lender
interest on the unpaid amount during the period from the date the LOC
Participant received the notice regarding the unreimbursed drawing until
such LOC Participant pays such amount to the Issuing Lender in full at a
rate per annum equal to, if paid within two Business Days of the date of
drawing, the Federal Funds Rate and thereafter at a rate equal to the
Base Rate. Each LOC Participant's obligation to make such payment to the
Issuing Lender, and the right of the Issuing Lender to receive the same,
shall be absolute and unconditional, shall not be affected by any
circumstance whatsoever and without regard to the termination of this
Credit Agreement or the Commitments hereunder,
30
36
the existence of a Default or Event of Default or the acceleration of
the obligations hereunder and shall be made without any offset,
abatement, withholding or reduction whatsoever. Simultaneously with the
making of each such payment by a LOC Participant to the Issuing Lender,
such LOC Participant shall, automatically and without any further action
on the part of the Issuing Lender or such LOC Participant, acquire a
participation in an amount equal to such payment (excluding the portion
of such payment constituting interest owing to the Issuing Lender) in
the related unreimbursed drawing portion of the LOC Obligation and in
the interest thereon and in the related LOC Documents, and shall have a
ratable interest in the Issuing Lender's claim against the Borrower with
respect thereto.
(e) Repayment with Loans. On any day on which the Borrower shall
have requested, or been deemed to have requested, a Loan borrowing to
reimburse a drawing under a Letter of Credit (as set forth in clause (d)
above), the Administrative Agent shall give notice to the applicable
Lenders that a Loan has been requested or deemed requested in connection
with a drawing under a Letter of Credit, in which case a Loan borrowing
comprised solely of Base Rate Loans (each such borrowing, a "Mandatory
Borrowing") shall be immediately made from all applicable Lenders
(without giving effect to any termination of the Commitments pursuant to
Section 9.2) pro rata based on each Lender's respective Commitment
Percentage and the proceeds thereof shall be paid directly to the
Issuing Lender for application to the respective LOC Obligations. Each
such Lender hereby irrevocably agrees to make such Loans immediately
upon any such request or deemed request on account of each such
Mandatory Borrowing in the amount and in the manner specified in the
preceding sentence and on the same such date notwithstanding (i) the
amount of Mandatory Borrowing may not comply with the minimum amount for
borrowings of Loans otherwise required hereunder, (ii) whether any
conditions specified in Section 5.2 are then satisfied, (iii) whether a
Default or Event of Default then exists, (iv) failure of any such
request or deemed request for Loans to be made by the time otherwise
required hereunder, (v) the date of such Mandatory Borrowing, or (vi)
any reduction in the Revolving Committed Amount or any termination of
the Commitments. In the event that any Mandatory Borrowing cannot for
any reason be made on the date otherwise required above (including,
without limitation, as a result of the commencement of a proceeding
under the Bankruptcy Code with respect to a Credit Party), then each
such Lender hereby agrees that it shall forthwith fund (as of the date
the Mandatory Borrowing would otherwise have occurred, but adjusted for
any payments received from the Borrower on or after such date and prior
to such purchase) its Participation Interest in unreimbursed drawings
under Letters of Credit; provided, further, that in the event any Lender
shall fail to fund its Participation Interest on the day the Mandatory
Borrowing would otherwise have occurred, then the amount of such
Lender's unfunded Participation Interest therein shall bear interest
payable to the Issuing Lender upon demand, at the rate equal to, if paid
within two Business Days of such date, the Federal Funds Rate, and
thereafter at a rate equal to the Base Rate.
(f) Modification and Extension. The issuance of any supplement,
modification, amendment, renewal, or extensions to any Letter of Credit
shall, for purposes hereof, be treated in all respects the same as the
issuance of a new Letter of Credit hereunder; provided that the fees to
be paid pursuant to Section 3.4(b)(i) shall only be due if the
expiration date
31
37
of such Letter of Credit is extended or the stated amount thereof
increased.
(g) Applicability of ISP98 and UCP. Unless otherwise expressly
stated by the Issuing Lender, when a Letter of Credit is issued
(including any such agreement applicable to an Existing Letter of
Credit), (i) the rules of the "International Standby Practices 1998"
published by the Institute of International Banking Law & Practice (or
such later version thereof as may be in effect at the time of issuance)
shall apply to each standby Letter of Credit, and (ii) the rules of the
Uniform Customs and Practice for Documentary Credits, as most recently
published by the International Chamber of Commerce (the "ICC") at the
time of issuance (including the ICC decision published by the Commission
on Banking Technique and Practice on April 6, 1998 regarding the
European Single currency (euro)) shall apply to each commercial Letter
of Credit.
(h) Responsibility of Issuing Lender. It is expressly understood
and agreed as between the Lenders that the obligations of the Issuing
Lender hereunder to the LOC Participants are only those expressly set
forth in this Credit Agreement and that the Issuing Lender shall be
entitled to assume that the conditions precedent set forth in Section
5.2 have been satisfied unless it shall have acquired actual knowledge
that any such condition precedent has not been satisfied; provided,
however, that nothing set forth in this Section 2.2 shall be deemed to
prejudice the right of any LOC Participant to recover from the Issuing
Lender any amounts made available by such LOC Participant to the Issuing
Lender pursuant to this Section 2.2 in the event that it is determined
by a court of competent jurisdiction that the payment with respect to a
Letter of Credit constituted gross negligence or willful misconduct on
the part of the Issuing Lender.
(i) Conflict with LOC Documents. In the event of any conflict
between this Credit Agreement and any LOC Document, this Credit
Agreement shall govern.
(j) Indemnification of Issuing Lender.
(i) In addition to its other obligations under this Credit
Agreement, the Credit Parties hereby agree to protect, indemnify,
pay and save the Issuing Lender harmless from and against any and
all claims, demands, liabilities, damages, losses, costs, charges
and expenses (including reasonable Attorney Costs) that the Issuing
Lender may incur or be subject to as a consequence, direct or
indirect, of (A) the issuance of any Letter of Credit or (B) the
failure of the Issuing Lender to honor a drawing under a Letter of
Credit as a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto Governmental
Authority (all such acts or omissions, herein called "Government
Acts").
(ii) As between the Credit Parties and the Issuing Lender,
the Credit Parties shall assume all risks of the acts, omissions or
misuse of any Letter of Credit by the beneficiary thereof. The
Issuing Lender shall not be responsible for: (A) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any Credit Party in connection with the
application for and issuance of any Letter of Credit, even if it
should in fact prove to be in any or all respects
32
38
invalid, insufficient, inaccurate, fraudulent or forged; (B) the
validity or sufficiency of any instrument transferring or assigning
or purporting to transfer or assign any Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or in
part, that may prove to be invalid or ineffective for any reason;
(C) failure of the beneficiary of a Letter of Credit to comply
fully with conditions required in order to draw upon a Letter of
Credit; (D) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in cipher;
(E) errors in interpretation of technical terms; (F) any loss or
delay in the transmission or otherwise of any document required to
be delivered to the Issuing Lender in order to make a drawing under
a Letter of Credit or of the proceeds thereof; and (G) any
consequences arising from causes beyond the control of the Issuing
Lender, including, without limitation, any Government Acts. None of
the above shall affect, impair, or prevent the vesting of the
Issuing Lender's rights or powers hereunder.
(iii) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or
omitted by the Issuing Lender, under or in connection with any
Letter of Credit or the related certificates, if taken or omitted
in good faith, shall not put the Issuing Lender under any resulting
liability to the Credit Parties. It is the intention of the parties
that this Credit Agreement shall be construed and applied to
protect and indemnify the Issuing Lender against any and all risks
involved in the issuance of the Letters of Credit, all of which
risks are hereby assumed by the Credit Parties, including, without
limitation, any and all risks of the acts or omissions, whether
rightful or wrongful, of any present or future Government Acts. The
Issuing Lender shall not, in any way, be liable for any failure by
the Issuing Lender or anyone else to pay any drawing under any
Letter of Credit as a result of any Government Acts or any other
cause beyond the control of the Issuing Lender.
(iv) Nothing in this subsection (j) is intended to limit the
reimbursement obligation of the Credit Parties contained in this
Section 2.2. The obligations of the Credit Parties under this
subsection (j) shall survive the termination of this Credit
Agreement. No act or omission of any current or prior beneficiary
of a Letter of Credit shall in any way affect or impair the rights
of the Issuing Lender to enforce any right, power or benefit under
this Credit Agreement.
(v) Notwithstanding anything to the contrary contained in this
subsection (j), the Credit Parties shall have no obligation to
indemnify the Issuing Lender in respect of any liability incurred
by the Issuing Lender arising out of the gross negligence or
willful misconduct of the Issuing Lender. Nothing in this Credit
Agreement shall relieve the Issuing Lender of any liability to the
Credit Parties in respect of any action taken by the Issuing Lender
which action constitutes gross negligence or willful misconduct of
the Issuing Lender or a violation of the UCP or Uniform Commercial
Code (as applicable).
33
39
SECTION 3
GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT
3.1 INTEREST.
(a) Interest Rate. All Base Rate Loans shall accrue interest at the
Adjusted Base Rate. All LIBOR Loans shall accrue interest at the
Adjusted LIBOR Rate.
(b) Default Rate of Interest. Upon the occurrence, and during the
continuance, of an Event of Default, the principal of and, to the extent
permitted by law, interest on the Loans and any other amounts owing
hereunder or under the other Credit Documents (including without
limitation fees and expenses) shall bear interest, payable on demand, at
a per annum rate equal to three percent (3%) plus the rate which would
otherwise be applicable (or if no rate is applicable, then the rate for
Base Rate Loans plus three percent (3%) per annum).
(c) Interest Payments. Interest on Loans shall be due and payable
in arrears on each Interest Payment Date.
3.2 PLACE AND MANNER OF PAYMENTS.
All payments of principal, interest, fees, expenses and other amounts to
be made by the Borrower under this Credit Agreement shall be received not later
than 11:00 a.m. on the date when due, in Dollars and in immediately available
funds, by the Administrative Agent at the Agency Services Address or the Issuing
Lender at its applicable address. Payments received after such time shall be
deemed to have been received on the next Business Day. The Borrower shall, at
the time it makes any payment under this Credit Agreement, specify to the
Administrative Agent or Issuing Lender, as applicable, the Loans, Letters of
Credit, fees or other amounts payable by the Borrower hereunder to which such
payment is to be applied (and in the event that it fails to specify, or if such
application would be inconsistent with the terms hereof, the Administrative
Agent shall, subject to Section 3.7, distribute such payment to the Lenders in
such manner as the Administrative Agent may deem appropriate). The
Administrative Agent will distribute any such payment to the Lenders on the day
received if such payment is received prior to 11:00 a.m.; otherwise the
Administrative Agent will distribute such payment to the Lenders on the next
succeeding Business Day. Whenever any payment hereunder shall be stated to be
due on a day which is not a Business Day, the due date thereof shall be extended
to the next succeeding Business Day (provided that accrual of interest and fees
shall only be through the end of a calendar month).
3.3 PREPAYMENTS.
(a) Voluntary Prepayments. The Borrower shall have the right to
prepay Loans in whole or in part from time to time without premium or
penalty; provided, however, that (i) LIBOR Loans may only be prepaid on
three Business Days' prior written notice to the Administrative Agent
and any prepayment of LIBOR Loans will be subject to Section 3.14 and
(ii) each such partial prepayment of Loans shall be in the minimum
principal amount of
34
40
$250,000 and integral multiples of $100,000 in excess thereof.
(b) Mandatory Prepayments.
(i) Revolving Committed Amount. If at any time the aggregate
amount of Loans outstanding plus LOC Obligations outstanding
exceeds the lesser of (A) the Revolving Committed Amount and (B)
Facility Availability, the Borrower shall immediately forward to
the Administrative Agent an amount such that the amount of Loans
outstanding plus LOC Obligations outstanding does not exceed such
lesser amount (to be applied as set forth in Section 3.3(c) below).
(ii) Asset Dispositions. Upon receipt by any member of the
Consolidated Group of the proceeds from an Asset Disposition, the
Borrower shall immediately forward 100% of the Net Cash Proceeds of
such Asset Disposition to the Administrative Agent as a prepayment
of the Loans (to be applied as set forth in Section 3.3(c)).
(iii) Equity Issuances. Upon receipt by any member of the
Consolidated Group of the proceeds from an Equity Issuance, the
Borrower shall immediately forward 100% of the Net Cash Proceeds of
such Equity Issuance to the Administrative Agent as a prepayment of
the Loans (to be applied as set forth in Section 3.3(c)); provided
that no prepayment shall be required under this Section 3.3(b)(iii)
until all amounts outstanding under the Bridge Facility have been
paid in full and the commitments thereunder shall have terminated.
(iv) Public Debt Issuances. Upon receipt by any member of
the Consolidated Group of the Net Cash Proceeds from a Public Debt
Issuance, the Borrower shall immediately forward 100% of the Net
Cash Proceeds of such Public Debt Issuance to the Administrative
Agent as a prepayment of the Loans (to be applied as set forth in
Section 3.3(c)); provided that no prepayment shall be required
under this Section 3.3(b)(iv) until all amounts outstanding under
the Bridge Facility have been paid in full and the commitments
thereunder shall have terminated.
(v) Refinancings. Upon receipt of the Net Cash Proceeds from
a Refinancing, the Borrower shall immediately forward 100% of the
Net Cash Proceeds of such Refinancing to the Administrative Agent
as a prepayment of the Loans (to be applied as set forth in Section
3.3(c)).
(vi) Principal Payments on Note Receivables. Upon receipt by
any member of the Consolidated Group of principal payments with
respect to a Note Receivable, the Borrower shall immediately
forward 100% of such principal payments to the Administrative Agent
as a prepayment of the Loans (to be applied as set forth in Section
3.3(c)).
(c) Application of Prepayments. All amounts required to be paid
pursuant to this Section 3.3 shall be applied first to Base Rate Loans
and second to LIBOR Loans in
35
41
direct order of Interest Period maturities (in each case without any
permanent reduction in the Revolving Committed Amount). All prepayments
hereunder shall be subject to Section 3.14.
3.4 FEES.
(a) Facility Fees. In consideration of the Revolving Committed
Amount being made available by the Lenders hereunder, the Borrower
agrees to pay to the Administrative Agent, for the pro rata benefit of
each Lender (based on each Lender's Commitment and based on the number
of days that each Lender was a Lender during the prior fiscal quarter),
a per annum fee equal to the product of (i) the Applicable Percentage
for Facility Fees multiplied by (ii) the then Revolving Committed Amount
for each day of such fiscal quarter (the "Facility Fees"). The accrued
Facility Fees shall commence to accrue on the Effective Date and shall
be due and payable in arrears on the first calendar day of each fiscal
quarter of the Borrower (as well as on the Maturity Date), beginning
with the first of such dates to occur after the Effective Date.
(b) Letter of Credit Fees.
(i) Letter of Credit Fees. In consideration of the issuance
of Letters of Credit hereunder, the Borrower agrees to pay to the
Issuing Lender, for the pro rata benefit of the LOC Participants
(based on each LOC Participant's Commitment), a per annum fee with
respect to each Letter of Credit (the "Letter of Credit Fees")
equal to the Applicable Percentage for LIBOR Loans in effect on the
date of issuance of such Letter of Credit on the maximum amount
available to be drawn under such Letter of Credit from the date of
issuance to the date of expiration. The Letter of Credit Fees will
be payable in full on the date of issuance of the Letter of Credit.
(ii) Issuing Lender Fees. In addition to the Letter of
Credit Fees payable pursuant to subsection (i) above, the Borrower
shall pay to the Issuing Lender for its own account, without
sharing by the other Lenders, (A) a fee with respect to each Letter
of Credit equal to the greater of (x) .125% per annum on the
maximum amount available to be drawn under such Letter of Credit
and (y) $750, such fee to be paid in full on the date of issuance
of the Letter of Credit and (B) the customary, reasonable charges
from time to time to the Issuing Lender for its services in
connection with the issuance, amendment, payment, transfer,
administration, cancellation and conversion of, and drawings under,
Letters of Credit (collectively, the "Issuing Lender Fees"). The
Issuing Lender Fees will be payable in full on the date of issuance
of the Letter of Credit.
(c) Administrative Fees. The Borrower agrees to pay to the
Administrative Agent, for its own account, an annual fee as agreed to
between the Borrower and the Administrative Agent in the Fee Letter.
36
42
3.5 PAYMENT IN FULL AT MATURITY.
On the Maturity Date, the entire outstanding principal balance of
all Loans and all LOC Obligations, together with accrued but unpaid
interest, fees and all other sums owing with respect thereto, shall be
due and payable in full, unless accelerated sooner pursuant to Section
9.2.
3.6 COMPUTATIONS OF INTEREST AND FEES.
(a) All computations of interest and fees hereunder shall be made
on the basis of the actual number of days elapsed over a year of 360
days. Interest shall accrue from and include the date of borrowing (or
continuation or conversion) but exclude the date of payment.
(b) It is the intent of the Lenders and the Credit Parties to
conform to and contract in strict compliance with applicable usury law
from time to time in effect. All agreements between the Lenders and the
Credit Parties are hereby limited by the provisions of this paragraph
which shall override and control all such agreements, whether now
existing or hereafter arising and whether written or oral. In no way,
nor in any event or contingency (including but not limited to prepayment
or acceleration of the maturity of any obligation), shall the interest
taken, reserved, contracted for, charged, or received under this Credit
Agreement, under the Notes or otherwise, exceed the maximum nonusurious
amount permissible under applicable law. If, from any possible
construction of any of the Credit Documents or any other document,
interest would otherwise be payable in excess of the maximum nonusurious
amount, any such construction shall be subject to the provisions of this
paragraph and such interest shall be automatically reduced to the
maximum nonusurious amount permitted under applicable law, without the
necessity of execution of any amendment or new document. If any Lender
shall ever receive anything of value which is characterized as interest
on the Loans under applicable law and which would, apart from this
provision, be in excess of the maximum lawful amount, an amount equal to
the amount which would have been excessive interest shall, without
penalty, be applied to the reduction of the principal amount owing on
the Loans and not to the payment of interest, or refunded to the Credit
Parties or the other payor thereof if and to the extent such amount
which would have been excessive exceeds such unpaid principal amount of
the Loans. The right to demand payment of the Loans or any other
indebtedness evidenced by any of the Credit Documents does not include
the right to receive any interest which has not otherwise accrued on the
date of such demand, and the Lenders do not intend to charge or receive
any unearned interest in the event of such demand. All interest paid or
agreed to be paid to the Lenders with respect to the Loans shall, to the
extent permitted by applicable law, be amortized, prorated, allocated,
and spread throughout the full stated term (including any renewal or
extension) of the Loans so that the amount of interest on account of
such indebtedness does not exceed the maximum nonusurious amount
permitted by applicable law.
37
43
3.7 PRO RATA TREATMENT.
Except to the extent otherwise provided herein:
(a) Loans. Each Loan borrowing, each payment or prepayment of
principal of any Loan, each payment of fees (other than the
Administrative Fees and the Issuing Lender Fees), each reduction of the
Revolving Committed Amount, and each conversion or continuation of any
Loan, shall (except as otherwise provided in Section 3.11) be allocated
pro rata among the Lenders in accordance with the respective Commitment
Percentages of such Lenders (or, if the Commitments of such Lenders have
expired or been terminated, in accordance with the respective principal
amounts of the outstanding Loans and Participation Interests of such
Lenders); provided that, if any Lender shall have failed to pay its
applicable pro rata share of any Loan, then any amount to which such
Lender would otherwise be entitled pursuant to this Section 3.7 shall
instead be payable to the Administrative Agent until the share of such
Loan not funded by such Lender has been repaid; provided further, that
in the event any amount paid to any Lender pursuant to this Section 3.7
is rescinded or must otherwise be returned by the Administrative Agent,
each Lender shall, upon the request of the Administrative Agent, repay
to the Administrative Agent the amount so paid to such Lender, with
interest for the period commencing on the date such payment is returned
by the Administrative Agent until the date the Administrative Agent
receives such repayment at a rate per annum equal to, during the period
to but excluding the date two Business Days after such request, the
Federal Funds Rate, and thereafter, at the Base Rate plus three percent
(3%) per annum.
(b) Letters of Credit. Each payment of unreimbursed drawings in
respect of LOC Obligations shall be allocated to each LOC Participant
pro rata in accordance with its Commitment Percentage; provided that, if
any LOC Participant shall have failed to pay its applicable pro rata
share of any drawing under any Letter of Credit, then any amount to
which such LOC Participant would otherwise be entitled pursuant to this
subsection (b) shall instead be payable to the Issuing Lender until the
share of such unreimbursed drawing not funded by such Lender has been
repaid; provided further, that in the event any amount paid to any LOC
Participant pursuant to this subsection (b) is rescinded or must
otherwise be returned by the Issuing Lender, each LOC Participant shall,
upon the request of the Issuing Lender, repay to the Administrative
Agent for the account of the Issuing Lender the amount so paid to such
LOC Participant, with interest for the period commencing on the date
such payment is returned by the Issuing Lender until the date the
Issuing Lender receives such repayment at a rate per annum equal to,
during the period to but excluding the date two Business Days after such
request, the Federal Funds Rate, and thereafter, the Base Rate plus
three percent (3%) per annum.
3.8 SHARING OF PAYMENTS.
The Lenders agree among themselves that, except to the extent otherwise
provided herein, in the event that any Lender shall obtain payment in respect of
any Loan or any other obligation owing to such Lender under this Credit
Agreement through the exercise of a right of setoff, banker's lien or
counterclaim, or pursuant to a secured claim under Section 506 of the Bankruptcy
Code or
38
44
other security or interest arising from, or in lieu of, such secured claim,
received by such Lender under any applicable bankruptcy, insolvency or other
similar law or otherwise, or by any other means, in excess of its pro rata share
of such payment as provided for in this Credit Agreement, such Lender shall
promptly pay in cash or purchase from the other Lenders a participation in such
Loans and other obligations in such amounts, and make such other adjustments
from time to time, as shall be equitable to the end that all Lenders share such
payment in accordance with their respective ratable shares as provided for in
this Credit Agreement. The Lenders further agree among themselves that if
payment to a Lender obtained by such Lender through the exercise of a right of
setoff, banker's lien, counterclaim or other event as aforesaid shall be
rescinded or must otherwise be restored, each Lender which shall have shared the
benefit of such payment shall, by payment in cash or a repurchase of a
participation theretofore sold, return its share of that benefit (together with
its share of any accrued interest payable with respect thereto) to each Lender
whose payment shall have been rescinded or otherwise restored. The Credit
Parties agree that any Lender so purchasing such a participation may, to the
fullest extent permitted by law, exercise all rights of payment, including
setoff, banker's lien or counterclaim, with respect to such participation as
fully as if such Lender were a holder of such Loan or other obligation in the
amount of such participation. Except as otherwise expressly provided in this
Credit Agreement, if any Lender shall fail to remit to the Administrative Agent
or any other Lender an amount payable by such Lender to the Administrative Agent
or such other Lender pursuant to this Credit Agreement on the date when such
amount is due, such payments shall be made together with interest thereon for
each date from the date such amount is due until the date such amount is paid to
the Administrative Agent or such other Lender at a rate per annum equal to the
Federal Funds Rate. If under any applicable bankruptcy, insolvency or other
similar law, any Lender receives a secured claim in lieu of a setoff to which
this Section 3.8 applies, such Lender shall, to the extent practicable, exercise
its rights in respect of such secured claim in a manner consistent with the
rights of the Lenders under this Section 3.8 to share in the benefits of any
recovery on such secured claim.
3.9 CAPITAL ADEQUACY.
If, after the date thereof, any Lender determines that the introduction
of any law, rule or regulation or other Requirement of Law regarding capital
adequacy or any change therein or in the interpretation thereof, or compliance
by such Lender (or its Lending Office) therewith, has or would have the effect
of reducing the rate of return on the capital or assets of such Lender or any
corporation controlling such Lender as a consequence of such Lender's
obligations hereunder (taking into consideration its policies with respect to
capital adequacy and such Lender's desired return on capital), then from time to
time upon demand of such Lender (with a copy of such demand to the
Administrative Agent), the Borrower shall pay to such Lender such additional
amounts as will compensate such Lender for such reduction.
3.10 INABILITY TO DETERMINE INTEREST RATE.
If the Administrative Agent determines (which determination shall be
conclusive and binding upon the Borrower) in connection with any request for a
LIBOR Loan or a conversion to or continuation thereof that (a) Dollar deposits
are not being offered to banks in the applicable offshore Dollar market for the
applicable amount and Interest Period of such LIBOR Loan, (b) adequate and
reasonable means do not exist for determining the LIBOR Rate for such LIBOR
39
45
Loan, or (c) the LIBOR Rate for such LIBOR Loan does not adequately and fairly
reflect the cost to the Lenders of funding such LIBOR Loan, the Administrative
Agent will promptly notify the Borrower and all the Lenders. Thereafter, the
obligation of the Lenders to make or maintain LIBOR Loans shall be suspended
until the Administrative Agent revokes such notice. Upon receipt of such notice,
the Borrower may revoke any pending Notice of Borrowing or Notice of
Continuation/Conversion with respect to LIBOR Loans or, failing that, will be
deemed to have converted such request into a request for a borrowing of or
conversion into a Base Rate Loan in the amount specified therein.
3.11 ILLEGALITY.
If any Lender determines that any Requirement of Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make, maintain or fund LIBOR
Loans, or materially restricts the authority of such Lender to purchase or sell,
or to take deposits of, Dollars in the applicable offshore Dollar market, or to
determine or charge interest rates based upon the LIBOR Rate, then, on notice
thereof by such Lender to the Borrower through the Administrative Agent, any
obligation of such Lender to make or continue LIBOR Loans or to convert Base
Rate Loans to LIBOR Loans shall be suspended until such Lender notifies the
Administrative Agent and the Borrower that the circumstances giving rise to such
determination no longer exist. Upon receipt of such notice, the Borrower shall,
upon demand from such Lender (with a copy to the Administrative Agent), prepay
or, if applicable, convert all LIBOR Loans of such Lender to Base Rate Loans,
either on the last day of the Interest Period thereof, if such Lender may
lawfully continue to maintain such LIBOR Loans to such day, or immediately, if
such Lender may not lawfully continue to maintain such LIBOR Loans. Upon any
such prepayment or conversion, the Borrower shall also pay interest on the
amount so prepaid or converted, together with any amounts due with respect
thereto pursuant to Section 3.14. Each Lender agrees to designate a different
Lending Office if such designation will avoid the need for such notice and will
not, in the good faith judgment of such Lender, otherwise be materially
disadvantageous to such Lender.
3.12 REQUIREMENTS OF LAW.
If any Lender determines that as a result of the introduction of or any
change in, or in the interpretation of, any Requirement of Law, or such Lender's
compliance therewith, there shall be any increase in the cost to such Lender of
agreeing to make or making, funding or maintaining LIBOR Loans or (as the case
may be) issuing or participating in Letters of Credit, or a reduction in the
amount received or receivable by such Lender in connection with any of the
foregoing (excluding for purposes of this subsection (a) any such increased
costs or reduction in amount resulting from (i) Taxes or Other Taxes (as to
which Section 3.13 shall govern) and (ii) reserve requirements utilized in the
determination of the LIBOR Rate), then from time to time, within 10 days of
demand of such Lender (with a copy of such demand to the Administrative Agent),
the Borrower shall pay to such Lender such additional amounts as will compensate
such Lender for such increased cost or reduction in yield.
40
46
3.13 TAXES.
(a) Any and all payments by a Credit Party to or for the account of
the Administrative Agent or any Lender under any Credit Document shall
be made free and clear of and without deduction for any and all present
or future income, stamp or other taxes, duties, levies, imposts,
deductions, assessments, fees, withholdings or similar charges, and all
liabilities with respect thereto, but excluding, in the case of the
Administrative Agent and each Lender, taxes imposed on or measured by
its net income, and franchise taxes imposed on it (in lieu of net income
taxes), by the jurisdiction (or any political subdivision thereof) under
the laws of which the Administrative Agent or such Lender, as the case
may be, is organized or maintains its Lending Office (all such
non-excluded taxes, duties, levies, imposts, deductions, assessments,
fees, withholdings or similar charges, and liabilities being hereinafter
referred to as "Taxes"). If a Credit Party shall be required by any
Requirement of Law to deduct any Taxes from or in respect of any sum
payable under any Credit Document to the Administrative Agent or any
Lender, (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 3.13(a)), the Administrative
Agent and such Lender receives an amount equal to the sum it would have
received had no such deductions been made, (ii) such Credit Party shall
make such deductions, (iii) such Credit Party shall pay the full amount
deducted to the relevant taxation authority or other authority in
accordance with applicable Requirements of Law, and (iv) within 30 days
after the date of such payment, such Credit Party shall furnish to the
Administrative Agent (which shall forward the same to such Lender) the
original or a certified copy of a receipt evidencing payment thereof.
(b) In addition, each Credit Party agrees to pay any and all
present or future stamp, court or documentary taxes and any other excise
or property taxes or charges or similar levies which arise from any
payment made under any Credit Document or from the execution, delivery,
performance, enforcement or registration of, or otherwise with respect
to, any Credit Document (hereinafter referred to as "Other Taxes").
(c) If a Credit Party shall be required to deduct or pay any Taxes
or Other Taxes from or in respect of any sum payable under any Credit
Document to the Administrative Agent or any Lender, such Credit Party
shall also pay to the Administrative Agent (for the account of such
Lender) or to such Lender, at the time interest is paid, such additional
amount that such Lender specifies as necessary to preserve the after-tax
yield (after factoring in all taxes, including taxes imposed on or
measured by net income) such Lender would have received if such Taxes or
Other Taxes had not been imposed.
(d) Each Credit Party agrees to indemnify the Administrative Agent
and each Lender for (i) the full amount of Taxes and Other Taxes
(including any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section 3.13(d)) paid by the
Administrative Agent and such Lender, (ii) amounts payable under Section
3.13(c) and (iii) any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, in each case
whether or not such Taxes or Other Taxes
41
47
were correctly or legally imposed or asserted by the relevant
Governmental Authority.
(e) Each Lender that is a "foreign corporation, partnership or
trust" within the meaning of the Code shall deliver to the
Administrative Agent, prior to receipt of any payment subject to
withholding under the Code (or after accepting an assignment of an
interest herein), two duly signed completed copies of either IRS Form
W-8BEN or any successor thereto (relating to such Lender and entitling
it to an exemption from, or reduction of, withholding tax on all
payments to be made to such Lender by the Credit Parties pursuant to
this Agreement) or IRS Form W-8ECI or any successor thereto (relating to
all payments to be made to such Lender by a Credit Party pursuant to
this Agreement) or such other evidence satisfactory to the Borrower and
the Administrative Agent that such Lender is entitled to an exemption
from, or reduction of, U.S. withholding tax. Thereafter and from time to
time, each such Lender shall (i) promptly submit to the Administrative
Agent such additional duly completed and signed copies of one of such
forms (or such successor forms as shall be adopted from time to time by
the relevant United States taxing authorities) as may then be available
under then current United States laws and regulations to avoid, or such
evidence as is satisfactory to the Borrower and the Administrative Agent
of any available exemption from or reduction of, United States
withholding taxes in respect of all payments to be made to such Lender
by the Borrower pursuant to this Agreement, (ii) promptly notify the
Agent of any change in circumstances which would modify or render
invalid any claimed exemption or reduction, and (iii) take such steps as
shall not be materially disadvantageous to it, in the reasonable
judgment of such Lender, and as may be reasonably necessary (including
the re-designation of its Lending Office) to avoid any Requirement of
Law that the Credit Parties make any deduction or withholding for taxes
from amounts payable to such Lender. If such Lender fails to deliver the
above forms or other documentation, then the Administrative Agent may
withhold from any interest payment to such Lender an amount equivalent
to the applicable withholding tax imposed by Sections 1441 and 1442 of
the Code, without reduction. If any Governmental Authority asserts that
the Administrative Agent did not properly withhold any tax or other
amount from payments made in respect of such Lender, such Lender shall
indemnify the Administrative Agent therefor, including all penalties and
interest, any taxes imposed by any jurisdiction on the amounts payable
to the Administrative Agent under this Section 3.13(e), and costs and
expenses (including Attorney Costs) of the Administrative Agent. The
obligation of the Lenders under this Section 3.13(e) shall survive the
payment of all Obligations and the resignation or replacement of the
Administrative Agent.
3.14 COMPENSATION.
Upon the written demand of any Lender, the Borrower shall promptly
compensate such Lender for and hold such Lender harmless from any loss, cost or
expense incurred by it as a result of:
(a) any continuation, conversion, payment or prepayment of any
LIBOR Loan on a day other than the last day of the Interest Period for
such LIBOR Loan (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise); or
42
48
(b) any failure by the Borrower (for a reason other than the
failure of such Lender to make a LIBOR Loan) to prepay, borrow, continue
or convert any LIBOR Loan on the date or in the amount previously
requested by the Borrower.
The amount each such Lender shall be compensated pursuant to this Section 3.14
shall include (a) any loss incurred by such Lender in connection with the
re-employment of funds prepaid, repaid, not borrowed or paid, as the case may
be, and the amount of such loss shall be the excess, if any, of (i) interest or
other cost to such Lender of the deposit or other source of funding used to make
any such LIBOR Loan over (ii) the interest earned (or to be earned) by such
Lender upon the re-lending or other re-employment of the amount of such LIBOR
Loan for the remainder of its respective Interest Period plus (b) any other loss
of anticipated profits and any loss or expense arising from the liquidation or
re-employment of funds obtained by it to maintain such Loan or from fees payable
to terminate the deposits from which such funds were obtained plus (c) $250 plus
(d) any reasonable out-of-pocket expenses (including Attorney Costs) incurred
and reasonably attributable thereto.
For purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 3.14, each Lender may deem that it funded each LIBOR Loan made by
it at the LIBOR Rate for such LIBOR Loan by a matching deposit or other
borrowing in the applicable offshore Dollar interbank market for a comparable
amount and for a comparable period, whether or not such LIBOR Loan was in fact
so funded.
3.15 DETERMINATION AND SURVIVAL OF PROVISIONS.
All determinations by the Administrative Agent or a Lender of amounts
owing under Sections 3.9 through 3.14, inclusive, shall, absent manifest error,
be conclusive and binding on the parties hereto. In determining such amount, the
Administrative Agent or such Lender may use any reasonable averaging and
attribution methods. Section 3.9 through 3.14, inclusive, shall survive the
termination of this Credit Agreement and the payment of all amounts owing
hereunder.
SECTION 4
GUARANTY
4.1 GUARANTY OF PAYMENT.
Subject to Section 4.7 below, each of the Guarantors hereby, jointly and
severally, unconditionally guarantees to each Lender, the prompt payment of the
Obligations in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration or otherwise). This Guaranty is a guaranty of
payment and not of collection and is a continuing guaranty and shall apply to
all Obligations whenever arising.
43
49
4.2 OBLIGATIONS UNCONDITIONAL.
The obligations of the Guarantors hereunder are absolute and
unconditional, irrespective of the value, genuineness, validity, regularity or
enforceability of any of the Credit Documents or any other agreement or
instrument referred to therein, to the fullest extent permitted by applicable
law, irrespective of any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor.
Each Guarantor agrees that this Guaranty may be enforced by the Lenders without
the necessity at any time of resorting to or exhausting any other security or
collateral and without the necessity at any time of having recourse to the Notes
or any other of the Credit Documents or any Collateral, if any, hereafter
securing the Obligations or otherwise and each Guarantor hereby waives the right
to require the Lenders to proceed against the Borrower or any other Person
(including a co-guarantor) or to require the Lenders to pursue any other remedy
or enforce any other right. Each Guarantor further agrees that it shall have no
right (a) of subrogation, indemnity, reimbursement or contribution against the
Borrower or any other Guarantor of the Obligations for amounts paid under this
Guaranty or (b) to payment of Indebtedness owing by any other Credit Party to
such Guarantor until such time as the Obligations have been paid in full, all
Commitments under this Credit Agreement have been terminated and no Person or
Governmental Authority shall have any right to request any return or
reimbursement of funds from the Lenders in connection with monies received under
the Credit Documents. Each Guarantor further agrees that nothing contained
herein shall prevent the Lenders from suing on the Notes or any of the other
Credit Documents or foreclosing its security interest in or Lien on any
Collateral, if any, securing the Obligations or from exercising any other rights
available to it under this Credit Agreement, the Notes, any other of the Credit
Documents, or any other instrument of security, if any, and the exercise of any
of the aforesaid rights and the completion of any foreclosure proceedings shall
not constitute a discharge of any of any Guarantor's obligations hereunder; it
being the purpose and intent of each Guarantor that its obligations hereunder
shall be absolute, independent and unconditional under any and all
circumstances. Neither any Guarantor's obligations under this Guaranty nor any
remedy for the enforcement thereof shall be impaired, modified, changed or
released in any manner whatsoever by an impairment, modification, change,
release or limitation of the liability of the Borrower or by reason of the
bankruptcy or insolvency of the Borrower. Each Guarantor waives any and all
notice of the creation, renewal, extension or accrual of any of the Obligations
and notice of or proof of reliance by the Administrative Agent or any Lender
upon this Guarantee or acceptance of this Guarantee. The Obligations, and any of
them, shall conclusively be deemed to have been created, contracted or incurred,
or renewed, extended, amended or waived, in reliance upon this Guarantee. All
dealings between the Borrower and any of the Guarantors, on the one hand, and
the Administrative Agent and the Lenders, on the other hand, likewise shall be
conclusively presumed to have been had or consummated in reliance upon this
Guarantee. The Guarantors further agree to all rights of set-off as set forth in
Section 11.2.
4.3 MODIFICATIONS.
Each Guarantor agrees that (a) all or any part of the Collateral now or
hereafter held for the Obligations, if any, may be exchanged, compromised or
surrendered from time to time; (b) the Lenders shall not have any obligation to
protect, perfect, secure or insure any such security interests, liens or
encumbrances now or hereafter held, if any, for the Obligations or the
properties
44
50
subject thereto; (c) the time or place of payment of the Obligations may be
changed or extended, in whole or in part, to a time certain or otherwise, and
may be renewed or accelerated, in whole or in part; (d) the Borrower and any
other party liable for payment under the Credit Documents may be granted
indulgences generally; (e) any of the provisions of the Notes or any of the
other Credit Documents may be modified, amended or waived; (f) any party
(including any co-guarantor) liable for the payment thereof may be granted
indulgences or be released; and (g) any deposit balance for the credit of the
Borrower or any other party liable for the payment of the Obligations or liable
upon any security therefor may be released, in whole or in part, at, before or
after the stated, extended or accelerated maturity of the Obligations, all
without notice to or further assent by such Guarantor, which shall remain bound
thereon, notwithstanding any such exchange, compromise, surrender, extension,
renewal, acceleration, modification, indulgence or release.
4.4 WAIVER OF RIGHTS.
Each Guarantor expressly waives to the fullest extent permitted by
applicable law: (a) notice of acceptance of this Guaranty by the Lenders and of
all extensions of credit to the Borrower by the Lenders; (b) presentment and
demand for payment or performance of any of the Obligations; (c) protest and
notice of dishonor or of default (except as specifically required in this Credit
Agreement) with respect to the Obligations or with respect to any security
therefor; (d) notice of the Lenders obtaining, amending, substituting for,
releasing, waiving or modifying any security interest, lien or encumbrance, if
any, hereafter securing the Obligations, or the Lenders' subordinating,
compromising, discharging or releasing such security interests, liens or
encumbrances, if any; and (e) all other notices to which such Guarantor might
otherwise be entitled.
4.5 REINSTATEMENT.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Obligations is rescinded or must be
otherwise restored by any holder of any of the Obligations, whether as a result
of any proceedings in bankruptcy or reorganization or otherwise, and each
Guarantor agrees that it will indemnify the Administrative Agent and each Lender
on demand for all reasonable costs and expenses (including, without limitation,
reasonable Attorney Costs) incurred by the Administrative Agent or such Lender
in connection with such rescission or restoration, including any such costs and
expenses incurred in defending against any claim alleging that such payment
constituted a preference, fraudulent transfer or similar payment under any
bankruptcy, insolvency or similar law.
4.6 REMEDIES.
The Guarantors agree that, as between the Guarantors, on the one hand,
and the Administrative Agent and the Lenders, on the other hand, the Obligations
may be declared to be forthwith due and payable as provided in Section 9 (and
shall be deemed to have become automatically due and payable in the
circumstances provided in Section 9) notwithstanding any stay, injunction or
other prohibition preventing such declaration (or preventing such Obligations
from becoming automatically due
45
51
and payable) as against any other Person and that, in the event of such
declaration (or such Obligations being deemed to have become automatically due
and payable), such Obligations (whether or not due and payable by any other
Person) shall forthwith become due and payable by the Guarantors. The Guarantors
acknowledge and agree that their obligations hereunder may be secured in
accordance with the terms of the Pledge Agreement and that the Lenders may
exercise their remedies thereunder in accordance with such terms.
4.7 LIMITATION OF GUARANTY.
Notwithstanding any provision to the contrary contained herein or in any
of the other Credit Documents:
(a) to the extent the obligations of any Guarantor shall be
adjudicated to be invalid or unenforceable for any reason (including,
without limitation, because of any applicable state or federal law
relating to fraudulent conveyances or transfers) then the obligations of
such Guarantor hereunder shall be limited to the maximum amount that is
permissible under applicable law (whether federal or state and
including, without limitation, the Bankruptcy Code); and
(b) with respect to any Guarantor that is a partnership, the
obligations of such Guarantor under this Section 4 shall (except as
identified below) only extend to and be binding upon such partnership
Guarantor and its assets, and, other than general partners that are a
member of the Consolidated Group, shall in no manner extend to or be
binding upon the individual general partners of such Guarantor, whether
natural or non-natural Persons.
4.8 RIGHTS OF CONTRIBUTION.
The Credit Parties agree among themselves that, in connection with
payments made hereunder, each Credit Party shall have contribution rights
against the other Credit Parties as permitted under applicable law. Such
contribution rights shall be subordinate and subject in right of payment to the
obligations of the Credit Parties under the Credit Documents and no Credit Party
shall exercise such rights of contribution until all Obligations have been paid
in full and the Commitments terminated.
SECTION 5
CONDITIONS PRECEDENT
5.1 CLOSING CONDITIONS.
The obligation of the Lenders to enter into this Credit Agreement is
subject to satisfaction of the following conditions:
(a) Executed Credit Documents. Receipt by the Administrative Agent
of duly executed copies of this Credit Agreement, the Notes, the Pledge
Agreement and all other Credit Documents required to be delivered on or
before the Effective Date, each in form and substance reasonably
acceptable to the Administrative Agent in its sole discretion.
46
52
(b) Authority Documents.
(i) Partnership Documents. With respect to each Credit Party
that is a partnership, receipt by the Administrative Agent of the
following:
(A) Authorization. Authorization of the general
partner(s) of such Credit Party, as of the Closing Date,
approving and adopting the Credit Documents to be executed
by such Credit Party, the transactions contemplated herein
and therein and the execution, delivery and performance
hereof and thereof, certified by such general partner(s) or
a secretary or assistant secretary of such general
partner(s) to be true, correct and complete as of the
Effective Date.
(B) Partnership Agreements. A copy of the partnership
agreement of such Credit Party, together with all amendments
thereto, certified by a general partner of such Credit Party
or a secretary or assistant secretary of the general
partner(s) to be true, correct and complete as of the
Effective Date.
(C) Certificates of Good Standing or Existence.
Certificates of good standing, existence or their equivalent
for such Credit Party issued as of a recent date by the
appropriate Governmental Authorities of its jurisdiction of
organization and each other state where the failure to
qualify or be in good standing would have or would
reasonably be expected to have a Material Adverse Effect.
(D) Incumbency. An incumbency certificate of the
general partner(s) of such Credit Party, certified by a
secretary or assistant secretary of such general partner to
be true and correct as of the Effective Date.
(ii) Corporate Documents. With respect to each Credit Party
that is a corporation, receipt by the Administrative Agent of the
following:
(A) Charter Documents. Copies of the articles or
certificate of incorporation or other charter documents of
such Credit Party certified to be true and complete as of a
recent date by the appropriate Governmental Authority of the
state or other jurisdiction of its incorporation and
certified by a secretary or assistant secretary of such
Credit Party to be true and correct as of the Effective
Date.
(B) Bylaws. A copy of the bylaws of such Credit Party
certified by a secretary or assistant secretary of such
Credit Party to be true and correct as of the Effective
Date.
(C) Resolutions. Copies of resolutions of the board of
directors
47
53
of such Credit Party, approving and adopting the Credit
Documents to which it is a party, the transactions
contemplated herein and therein and authorizing the
execution, delivery and performance hereof and thereof,
certified by a secretary or assistant secretary of such
Credit Party to be true and correct and in full force and
effect as of the Effective Date.
(D) Good Standing. (x) Certificates of good standing,
existence or their equivalent with respect to such Credit
Party certified as of a recent date by the appropriate
Governmental Authorities of the state or other jurisdiction
of incorporation and each other jurisdiction in which the
failure to so qualify and be in good standing could have a
Material Adverse Effect and (y) to the extent available, a
certificate indicating payment of all corporate franchise
taxes certified as of a recent date by the appropriate
governmental taxing authorities.
(E) Incumbency. An incumbency certificate of such
Credit Party certified by a secretary or assistant secretary
of such Credit Party to be true and correct as of the
Effective Date.
(iii) Limited Liability Company Documents. With respect to
each Credit Party that is a limited liability company, receipt by
the Administrative Agent of the following:
(A) Certificate of Formation. A copy of the certificate
of formation of such Credit Party certified to be true and
complete by the appropriate Governmental Authority of the
jurisdiction of its formation and certified by the sole or
managing member of such Credit Party to be true and correct
as of the Effective Date.
(B) LLC Agreement. A copy of the LLC Agreement of such
Credit Party certified by the sole or managing member of
such Credit Party to be true and correct as of the Effective
Date.
(C) Resolutions. Copies of resolutions of the members
or managing members of such Credit Party, as the case may
be, approving and adopting the Credit Documents to which it
is a party, the transactions contemplated herein and therein
and authorizing the execution, delivery and performance
hereof and thereof, certified by the sole or managing member
of such Credit Party to be true and correct as of the
Effective Date.
(D) Good Standing. Certificates of good standing,
existence or their equivalent with respect to such Credit
Party certified as of a recent date by the appropriate
Governmental Authorities of the state or other jurisdiction
of formation and each other jurisdiction in which the
failure to so qualify and be in good standing could have a
Material Adverse Effect.
48
54
(iv) Trust Documents. With respect to each Credit Party that
is a REIT, receipt by the Administrative Agent of the following:
(A) Declaration of Trust. A copy of the Declaration of
Trust of such Credit Party certified to be true and complete
by the appropriate Governmental Authority of the
jurisdiction of its formation and certified by the trustee
of such Credit Party to be true and correct as of the
Effective Date.
(B) Bylaws. A copy of the Bylaws of such Credit Party
certified by the trustee of such Credit Party to be true and
complete as of the Effective Date.
(C) Resolutions. Copies of the resolutions of the
trustee or Board of Trustees of such Credit Party, as the
case may be, approving and adopting the Credit Documents to
which it is a party, the transactions contemplated herein
and therein and authorizing the execution, delivery and
performance hereof and thereof, certified by the trustee of
such Credit Party to be true, correct and complete as of the
Effective Date.
(D) Good Standing. Certificates of good standing,
existence or their equivalent with respect to such Credit
Party certified as of a recent date by the appropriate
Governmental Authorities of the state or other jurisdiction
of formation and each other jurisdiction in which the
failure to so qualify and be in good standing could have a
Material Adverse Effect.
(c) Opinion of Counsel. Receipt by the Administrative Agent of an
opinion or opinions of counsel to the Credit Parties (which shall cover,
among other things, authority, legality, validity, binding effect and
enforceability), in form and substance satisfactory to the
Administrative Agent, addressed to the Administrative Agent on behalf of
the Lenders and dated as of the Effective Date.
(d) Financial Statements and Projections. Receipt and approval by
the Lenders of: (i) the consolidated financial statements of the
Consolidated Group for each of the three years ended December 31, 1997,
1998 and 1999, including balance sheets and income and cash flow
statements, audited by nationally recognized independent public
accountants and containing an unqualified opinion of such firm that such
statements present fairly, in all material respects, the consolidated
financial position and results of operations of such Person, and are
prepared in conformity with GAAP, (ii) interim consolidated financial
statements of the Consolidated Group for the six months ended June 30,
2000, including balance sheets and income and cash flow statements,
accompanied by a certificate of the chief financial officer of the
Borrower to the effect that such interim financial statements fairly
present in all material respects the financial condition of the
Consolidated Group and have been prepared in accordance with GAAP and
(iii) financial projections for the Combined Parties and pro forma
financial statements and pro forma compliance with the financial
covenants set forth in Section 7.2 of the Consolidated Group (on an
annual basis
49
55
through the year ended December 31, 2002), including a balance sheet and
income and cash flow statements, giving effect to the Western
Acquisition.
(e) Material Adverse Effect. There shall not have occurred any
event or condition since December 31, 1999 that has had or would
reasonably be expected to have a Material Adverse Effect.
(f) Litigation. There shall not exist any pending or threatened
action, suit, investigation or proceeding against any member of the
Consolidated Group that would have or would reasonably be expected to
have a Material Adverse Effect.
(g) Officer's Certificates. The Administrative Agent shall have
received a certificate of the chief financial officer of the Borrower on
behalf of the Credit Parties as of the Effective Date stating that (i)
each member of the Consolidated Group is in compliance with all existing
material financial obligations and all terms and conditions set forth
herein, (ii) no action, suit, investigation or proceeding is pending or
threatened in any court or before any arbitrator or Governmental
Authority that purports to affect a member of the Consolidated Group or
any transaction contemplated by the Credit Documents, if such action,
suit, investigation or proceeding would have or would reasonably be
expected to have a Material Adverse Effect, (iii) the financial
statements and information delivered pursuant to Section 5.1(d) were
prepared in good faith and using reasonable assumptions and (iv)
immediately after giving effect to this Credit Agreement, the other
Credit Documents and all the transactions contemplated herein and
therein to occur on such date, (A) each of the Credit Parties is
Solvent, (B) no Default or Event of Default exists, (C) all
representations and warranties contained herein and in the other Credit
Documents are true and correct in all material respects, and (D) the
Credit Parties are in compliance on a pro forma basis with each of the
financial covenants set forth in Section 7.2 (after giving effect to the
Western Acquisition), together with evidence thereof.
(h) Borrowing Base Certificate. The Administrative Agent shall have
received a Borrowing Base Certificate completed as of the Effective
Date.
(i) Fees and Expenses. Payment by the Credit Parties of all fees
and expenses owed by them to the Lenders and the Administrative Agent,
including, without limitation, payment to the Administrative Agent of
the fees set forth in the Fee Letter.
(j) Consents and Approvals. Except for consents from the mortgagees
of the Properties set forth on Schedule 6.5, all governmental,
shareholder, partner, member and third-party consents and approvals
necessary or, in the opinion of the Administrative Agent, desirable in
connection with the Loans and the transactions contemplated under the
Credit Documents shall have been duly obtained and shall be in full
force and effect, including, without limitation, consent to the
assumption by a member of the Consolidated Group of the Senior Notes and
the Western Mortgage, and a copy of each such consent or approval shall
have been delivered to the Administrative Agent upon request of the
Administrative Agent.
50
56
(k) Due Diligence. Completion by the Lenders of all due diligence
with respect to (i) the Combined Parties, including, but not limited to,
a review of all existing Indebtedness of the Combined Parties, (ii) all
Properties and (iii) the Western Acquisition, in each case in scope and
content reasonably satisfactory to the Lenders.
(l) Existing Indebtedness. Receipt by the Administrative Agent of
satisfactory evidence of the repayment of (i) all loans and obligations
under the Existing Credit Agreement and the termination of the
commitments thereunder and (ii) all Indebtedness owing by Western and
its Subsidiaries prior to the Western Acquisition, other than the Senior
Notes and the Western Mortgage.
(m) Western Acquisition. The Borrower shall have certified and
delivered to the Administrative Agent a true, correct and complete copy
of all documentation evidencing the Western Acquisition (the "Merger
Agreement"). The Merger Agreement shall not have been altered, amended
or otherwise changed or supplemented in any material respect or any
material condition precedent therein waived, without the prior written
consent of the Administrative Agent. The Western Acquisition shall have
been consummated in all material respects in accordance with the terms
of the Merger Agreement and in compliance with applicable laws and
regulatory approvals, and all conditions precedent to the obligations of
the Combined Parties under the Merger Agreement shall have been
satisfied or, with the prior approval of the Administrative Agent,
waived. All filings required by the Merger Agreement shall have been
made in accordance with applicable law.
(n) Personal Property. The Administrative Agent shall have received
(in form and substance satisfactory to the Administrative Agent):
(i) searches of Uniform Commercial Code filings in each
jurisdiction where a filing would need to be made in order to
perfect the Lenders' security interest in the Collateral, copies of
the financing statements on file in such jurisdictions and evidence
that no Liens exist with respect to the Collateral;
(ii) duly executed Uniform Commercial Code financing
statements for each appropriate jurisdiction as are necessary, in
the Administrative Agent's sole discretion, to perfect the Lenders'
security interest in the Collateral; and
(iii) such other documentation with respect to the
Collateral as may be required by the Collateral Agent in its sole
reasonable discretion in order to perfect and protect the Lenders'
security interest in the Collateral.
(o) Other. Receipt by the Lenders of such other documents,
instruments, agreements or information as reasonably and timely
requested by any Lender, including, but not limited to, information
regarding litigation, tax, accounting, labor, insurance, pension
liabilities (actual or contingent), real estate leases, material
contracts, debt agreements, property ownership and contingent
liabilities of the Combined Parties.
51
57
5.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.
In addition to the conditions precedent stated elsewhere herein, the
Lenders shall not be obligated to make Loans nor shall an Issuing Lender be
required to issue or extend a Letter of Credit unless:
(a) Delivery of Notice. The Borrower shall have delivered (i) in
the case of a Loan, a Notice of Borrowing, duly executed and completed,
by the time specified in Section 2.1 and (ii) in the case of any Letter
of Credit, the Issuing Lender shall have received an appropriate request
for issuance in accordance with the provisions of Section 2.2
(b) Representations and Warranties. The representations and
warranties made by any Credit Party in any Credit Document are true and
correct in all material respects at and as if made as of such date,
except to the extent they expressly relate to an earlier date.
(c) No Default. No Default or Event of Default shall exist or be
continuing either prior to or after giving effect thereto.
(d) Availability. Immediately after giving effect to the making of
the requested Loan (and the application of the proceeds thereof), or the
issuance of the requested Letter of Credit, as the case may be, the sum
of the aggregate principal amount of Loans outstanding plus LOC
Obligations outstanding shall not exceed the lesser of (A) the Revolving
Committed Amount and (B) Facility Availability as of such date.
The delivery of each Notice of Borrowing or request for the issuance of a Letter
of Credit shall constitute a representation and warranty by the Borrower of the
correctness of the matters specified in subsections (b), (c) and (d) above.
SECTION 6
REPRESENTATIONS AND WARRANTIES
The Credit Parties hereby represent to the Administrative Agent and each
Lender that:
6.1 ORGANIZATION AND GOOD STANDING.
Each Credit Party (a) is either a partnership, a corporation or a
limited liability company duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (b) is duly qualified
and in good standing as a foreign organization and authorized to do business in
every other jurisdiction unless the failure to be so qualified, in good standing
or authorized would not have or would not reasonably be expected to have a
Material Adverse Effect and (c) has the power and authority to own its
properties and to carry on its business as now conducted and as currently
proposed to be conducted.
52
58
6.2 DUE AUTHORIZATION.
Each Credit Party (a) has the power and authority to execute, deliver
and perform this Credit Agreement and the other Credit Documents to which it is
a party and to incur the obligations herein and therein provided for and (b) has
duly taken all necessary action to authorize, and is duly authorized, to
execute, deliver and perform this Credit Agreement and the other Credit
Documents to which it is a party.
6.3 ENFORCEABLE OBLIGATIONS.
This Credit Agreement and the other Credit Documents have been duly
executed and delivered by each Credit Party and constitute legal, valid and
binding obligations of such Credit Party enforceable against such Credit Party
in accordance with their respective terms, except as may be limited by
bankruptcy or insolvency laws or similar laws affecting creditors' rights
generally or by general equitable principles.
6.4 NO CONFLICTS.
Neither the execution and delivery of the Credit Documents, nor the
consummation of the transactions contemplated herein and therein, nor the
performance of or compliance with the terms and provisions hereof and thereof by
a Credit Party will (a) violate, contravene or conflict with any provision of
its organizational documents, (b) violate, contravene or conflict with any
Requirement of Law (including, without limitation, Regulation U or Regulation
X), order, writ, judgment, injunction, decree, license or permit applicable to
it, (c) violate, contravene or conflict with contractual provisions of, or cause
an event of default under, any indenture, loan agreement, mortgage, deed of
trust, contract or other agreement or instrument to which it is a party or by
which it or its properties may be bound, or (d) result in or require the
creation of any Lien upon or with respect to its properties.
6.5 CONSENTS.
Except for (a) consents, approvals and authorizations which have been
obtained and (b) consents from the mortgagees of the Properties set forth on
Schedule 6.5, no consent, approval, authorization or order of, or filing,
registration or qualification with, any Governmental Authority, equity owner or
third party in respect of any Credit Party is required in connection with the
execution, delivery or performance of this Credit Agreement or any of the other
Credit Documents, or the consummation of any transaction contemplated herein or
therein, including, without limitation, the Western Acquisition, by such Credit
Party.
6.6 FINANCIAL CONDITION.
The financial statements delivered to the Administrative Agent and the
Lenders pursuant to Section 5.1(d) and Sections 7.1(a) and (b): (a) have been
prepared in accordance with GAAP, (b) present fairly the consolidated financial
condition, results of operations and cash flows of the Consolidated Group as of
such date and for such periods and (c) show all material indebtedness and other
liabilities, direct or contingent, of the Consolidated Group. Since December 31,
1999, there
53
59
has been no sale, transfer or other disposition by any member of the
Consolidated Group of any material part of the business or property of the
Consolidated Group, taken as a whole, and no purchase or other acquisition by
any of them of any business or property (including any Capital Stock of any
other Person) material in relation to the consolidated financial condition of
the Consolidated Group, taken as a whole, (other than the Western Acquisition)
in each case, which, is not (i) reflected in the most recent financial
statements delivered to the Lenders pursuant to Section 5.1(d) and Section 7.1
or in the notes thereto or (ii) otherwise permitted by the terms of this Credit
Agreement and communicated to the Administrative Agent and the Lenders.
6.7 NO MATERIAL CHANGE.
Since December 31, 1999, there has been no development or event relating
to or affecting a Combined Party which has had or would be reasonably expected
to have a Material Adverse Effect.
6.8 DISCLOSURE.
Neither this Credit Agreement, nor any financial statements delivered to
the Administrative Agent or the Lenders nor any other document, certificate or
statement furnished to the Administrative Agent or the Lenders by or on behalf
of any Credit Party in connection with the transactions contemplated hereby
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained therein or herein not
misleading in light of the circumstances in which made.
6.9 NO DEFAULT.
No Combined Party is in default in any material respect under any
material contract, lease, loan agreement, indenture, mortgage, security
agreement or other agreement or obligation to which it is a party or by which
any of its properties is bound, other than any default occurring solely as a
result of the consummation of the Western Acquisition under the mortgages, loan
documents or other agreements with each of the mortgagees of the Properties set
forth on Schedule 6.5. No Default or Event of Default has occurred and is
continuing or would result from the consummation of the transactions
contemplated by this Credit Agreement and the other Credit Documents.
6.10 LITIGATION.
There are no actions, suits or legal, equitable, arbitration or
administrative proceedings, pending or, to the knowledge of any Credit Party,
threatened against, a Combined Party or with respect to its properties or
revenues which (a) purport to affect or pertain to this Credit Agreement or the
other Credit Documents or the transactions contemplated herein and therein or
(b) would have or would reasonably be expected to have a Material Adverse
Effect.
6.11 TAXES.
Each member of the Consolidated Group has filed, or caused to be filed,
all tax returns (federal, state, local and foreign) required to be filed and has
paid (a) all amounts of taxes shown thereon to be due (including interest and
penalties) and (b) all other taxes, fees, assessments and
54
60
other governmental charges (including mortgage recording taxes, documentary
stamp taxes and intangibles taxes) owing by it, except for such taxes (i) which
are not yet delinquent or (ii) that are being contested in good faith and by
proper proceedings, and against which adequate reserves are being maintained in
accordance with GAAP. No Credit Party is aware of any proposed tax assessments
against it or any other member of the Consolidated Group.
6.12 COMPLIANCE WITH LAW.
Each Combined Party is in compliance with all Requirements of Law
(including, without limitation, but subject to Section 6.20, Environmental Laws)
and all material orders, writs, injunctions and decrees applicable to it, or to
its properties.
6.13 LICENSES, ETC.
The Combined Parties have obtained, and hold in full force and effect,
all franchises, licenses, permits, certificates, authorizations, qualifications,
accreditations, easements, rights of way, intellectual property rights and other
rights, consents and approvals which are necessary for the operation of their
respective businesses as presently conducted.
6.14 OWNERSHIP OF COLLATERAL; LIENS.
The Combined Parties have good title in fee simple to all Properties.
The Borrower owns the Collateral free and clear of all Liens. No Borrowing Base
Property is subject to any Liens other than Liens permitted by Section 8.2(a).
6.15 INSURANCE.
The properties of the Consolidated Group are insured with financially
sound and reputable insurance companies that are not Affiliates of the Borrower,
in such amounts, with such deductibles and covering such risks, as are
customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the members of the Consolidated Group
operate.
6.16 USE OF PROCEEDS.
The proceeds of the Loans hereunder will be used solely for the purposes
specified in Section 7.11. No proceeds of the Loans hereunder will be used for
the acquisition of another Person unless the board of directors (or other
comparable governing body) or stockholders (or other equity owners), as
appropriate, of such Person has approved such acquisition.
6.17 GOVERNMENT REGULATION.
(a) No part of the Letters of Credit or proceeds of the Loans will
be used, directly or indirectly, for the purpose of purchasing or
carrying any "margin stock" within the meaning of Regulation U, or for
the purpose of purchasing or carrying or trading in any securities. No
Indebtedness being reduced or retired out of the proceeds of the Loans
55
61
was or will be incurred for the purpose of purchasing or carrying any
margin stock within the meaning of Regulation U or any "margin security"
within the meaning of Regulation T. "Margin stock" within the meaning of
Regulation U does not constitute more than 25% of the value of the
consolidated assets of the Consolidated Group. None of the transactions
contemplated by the Credit Documents (including, without limitation, the
direct or indirect use of the proceeds of the Loans) will violate or
result in a violation of (i) the Securities Act, (ii) the Exchange Act
or (iii) Regulations T, U or X.
(b) No member of the Consolidated Group is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power
Act or the Investment Company Act of 1940, each as amended. In addition,
no member of the Consolidated Group is (i) an "investment company"
registered or required to be registered under the Investment Company Act
of 1940, as amended, and is not controlled by an "investment company",
or (ii) a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary"
of a "holding company", within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
(c) No director, executive officer or principal shareholder of a
member of the Consolidated Group is a director, executive officer or
principal shareholder of any Lender. For the purposes hereof the terms
"director," "executive officer" and "principal shareholder" (when used
with reference to any Lender) have the respective meanings assigned
thereto in Regulation O issued by the Board of Governors of the Federal
Reserve System.
6.18 NO BURDENSOME RESTRICTIONS.
No Combined Party is a party to any agreement or instrument or subject
to any other obligation or any charter or corporate restriction or any provision
of any applicable law, rule or regulation which, individually or in the
aggregate, would have or would reasonably be expected to have a Material Adverse
Effect.
6.19 COMPLIANCE WITH ERISA.
Except as would not result in or be reasonably expected to result in a
liability in excess of $500,000:
(a) (i) No ERISA Event has occurred, and, to the best knowledge of
each member of the Consolidated Group and each ERISA Affiliate, no event
or condition has occurred or exists as a result of which any ERISA Event
could reasonably be expected to occur, with respect to any Plan; (ii) no
"accumulated funding deficiency," as such term is defined in Section 302
of ERISA and Section 412 of the Code, whether or not waived, has
occurred with respect to any Plan and no application for a funding
waiver or an extension of any amortization period pursuant to Section
412 of the Code has been made with respect to any Plan; (iii) each Plan
has been maintained, operated, and funded in compliance with its own
terms and in material compliance with the provisions of ERISA, the Code,
and any
56
62
other applicable federal or state laws; (iv) each Plan that is intended
to qualify under Section 401(a) of the Code has received a favorable
determination letter from the IRS or an application for such a letter is
currently being processed by the IRS with respect thereto and, to the
best knowledge of the Borrower, nothing has occurred which would
prevent, or cause the loss of, such qualification; and (v) no Lien in
favor or the PBGC or a Plan has arisen or is reasonably likely to arise
on account of any Plan.
(b) The actuarial present value of all "benefit liabilities" (as
defined in Section 4001(a)(16) of ERISA), whether or not vested, under
each Single Employer Plan, as of the last annual valuation date prior to
the date on which this representation is made or deemed made
(determined, in each case, in accordance with Financial Accounting
Standards Board Statement 87, utilizing the actuarial assumptions used
in such Plan's most recent actuarial valuation report), did not exceed
as of such valuation date the fair market value of the assets of such
Plan allocated to such accrued liabilities.
(c) No member of the Consolidated Group nor any ERISA Affiliate has
incurred, or, to the best of each such party's knowledge, is reasonably
expected to incur, any liability under Title IV of ERISA with respect to
any Single Employer Plan, or any withdrawal liability under ERISA to any
Multiemployer Plan or Multiple Employer Plan. No member of the
Consolidated Group nor any ERISA Affiliate would become subject to any
withdrawal liability under ERISA if any such party were to withdraw
completely from all Multiemployer Plans and Multiple Employer Plans as
of the valuation date most closely preceding the date on which this
representation is made or deemed made. No member of the Consolidated
Group nor any ERISA Affiliate has received any notification that any
Multiemployer Plan is in reorganization (within the meaning of Section
4241 of ERISA), is insolvent (within the meaning of Section 4245 of
ERISA), or has been terminated (within the meaning of Title IV of
ERISA), and no Multiemployer Plan is, to the best of each such Person's
knowledge, reasonably expected to be in reorganization, insolvent, or
terminated. No member of the Consolidated Group nor any ERISA Affiliate
has engaged in a transaction that could be subject to Sections 4069 or
4212(c) of ERISA.
(d) No prohibited transaction (within the meaning of Section 406 of
ERISA or Section 4975 of the Code) or breach of fiduciary responsibility
has occurred with respect to a Plan which has subjected or may subject
any member of the Consolidated Group or any ERISA Affiliate to any
liability under Sections 406, 409, 502(i), or 502(l) of ERISA or Section
4975 of the Code, or under any agreement or other instrument pursuant to
which any member of the Consolidated Group or any ERISA Affiliate has
agreed or is required to indemnify any person against any such
liability. There are no pending or, to the best knowledge of the
Borrower, threatened claims, actions or lawsuits, or action by any
Governmental Authority, with respect to any Plan that could be
reasonably expected to have a Material Adverse Effect.
(e) No member of the Consolidated Group nor any ERISA Affiliate has
any material liability with respect to "expected post-retirement benefit
obligations" within the meaning of the Financial Accounting Standards
Board Statement 106. Each Plan that is a welfare plan (as defined in
Section 3(1) of ERISA) to which Sections 601-609 of ERISA
57
63
and Section 4980B of the Code apply has been administered in compliance
in all material respects with such sections.
6.20 ENVIRONMENTAL MATTERS.
(a) Except as would not or would not reasonably be expected to
result in a liability in excess of $200,000:
(i) Each of the Properties and all operations at the
Properties are in material compliance with all applicable
Environmental Laws, and there is no violation of any Environmental
Law with respect to the Properties or the businesses operated
thereon by a Combined Party (the "Businesses"), and there are no
conditions relating to the Businesses or Properties that would be
reasonably expected to give rise to liability under any applicable
Environmental Laws.
(ii) No member of the Consolidated Group has received any
written notice of, or written inquiry from any Governmental
Authority regarding, any violation, alleged violation,
non-compliance, liability or potential liability regarding
Hazardous Materials or compliance with Environmental Laws with
regard to any of the Properties or the Businesses, nor does any
member of the Consolidated Group have knowledge that any such
notice is being threatened.
(iii) To the knowledge of the Consolidated Group, Hazardous
Materials have not been transported or disposed of from the
Properties, or generated, treated, stored or disposed of at, on or
under any of the Properties or any other location, in each case by,
or on behalf or with the permission of, any Combined Party in a
manner that would reasonably be expected to give rise to liability
under any applicable Environmental Law.
(iv) No judicial proceeding or governmental or
administrative action is pending or, to the knowledge of any member
of the Consolidated Group, threatened, under any Environmental Law
to which any Combined Party is or will be named as a party, nor are
there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with
respect to any Combined Party, the Properties or the Businesses, in
any amount reportable under the federal Comprehensive Environmental
Response, Compensation and Liability Act or any analogous state
law, except releases in compliance with any Environmental Laws.
(v) To the knowledge of the Consolidated Group, there has
been no release or threat of release of Hazardous Materials at or
from the Properties, or arising from or related to the operations
(including, without limitation, disposal) of a Combined Party in
connection with the Properties or otherwise in connection with the
Businesses except in compliance with Environmental Laws.
58
64
(vi) None of the Properties contains, or to the best
knowledge of the Consolidated Group, has previously contained, any
Hazardous Materials at, on or under the Properties in amounts or
concentrations that, if released, constitute or constituted a
violation of, or could give rise to liability under, Environmental
Laws.
(vii) No Combined Party has assumed any liability of any
Person under any Environmental Law.
(b) Each Combined Party has adopted procedures that are designed to
(i) ensure that each such Person, any of its operations and each of the
Properties owned by such Person remains in compliance with applicable
Environmental Laws and (ii) minimize any liabilities or potential
liabilities that each such Person, any of its operations and each of the
Properties owned by each such Person may have under applicable
Environmental Laws.
6.21 ORGANIZATION STRUCTURE/SUBSIDIARIES.
Set forth on Schedule 6.21 is a complete and accurate list of all
Subsidiaries of the Credit Parties and an accurate organization chart of the
Combined Parties. No Credit Party has any Subsidiaries or owns an interest,
directly or indirectly, in any Person or joint venture, except as set forth on
Schedule 6.21. Schedule 6.21 shall be updated from time to time by the Borrower
by giving written notice thereof to the Administrative Agent.
6.22 PROPERTIES.
Set forth on Schedule 6.22 is (a) the name, location and ownership of
each Property, (b) the year such Property was built, (c) the total square
footage and net rentable square footage of such Property, (d) a complete rent
roll for such Property, including name, address and lease expiration date for
each lessee and percentage occupancy, (e) operating statements for such property
for the fiscal year ended December 31, 1999 and the six months ended June 30,
2000, (f) projected NOI for the next two fiscal year ends for such Properties,
(g) a list of Liens on such Property, if any, including the mortgage balance and
maturity date and (h) an identification of all Unencumbered Properties. Schedule
6.22 shall be updated from time to time by the Borrower by giving written notice
thereof to the Administrative Agent.
6.23 SOLVENCY.
Each Credit Party, is and, after consummation of the transactions
contemplated by this Credit Agreement, will be Solvent.
59
65
SECTION 7
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect and until the Loans and LOC Obligations, together
with interest and fees and other obligations then due and payable hereunder,
have been paid in full and the Commitments and Letters of Credit hereunder shall
have terminated:
7.1 INFORMATION COVENANTS.
The Borrower will furnish, or cause to be furnished, to the
Administrative Agent and each of the Lenders:
(a) Annual Financial Statements. As soon as available, and in any
event within 90 days after the close of each fiscal year of the
Consolidated Group, a consolidated balance sheet and income statement of
the Consolidated Group as of the end of such fiscal year, together with
related consolidated statements of operations and retained earnings and
of cash flows for such fiscal year, setting forth in comparative form
consolidated figures for the preceding fiscal year, all such financial
information described above to be in reasonable form and detail and
audited by independent certified public accountants of recognized
national standing reasonably acceptable to the Administrative Agent and
whose opinion shall be to the effect that such financial statements have
been prepared in accordance with GAAP (except for changes with which
such accountants concur) and shall not be limited as to the scope of the
audit or qualified in any manner.
(b) Quarterly Financial Statements. As soon as available, and in
any event within 45 days after the close of the first three fiscal
quarters of the Consolidated Group, (i) a consolidated balance sheet and
income statement of the Consolidated Group, as of the end of such fiscal
quarter, together with related consolidated statements of operations and
retained earnings and of cash flows for such fiscal quarter in each case
setting forth in comparative form consolidated figures for the
corresponding period of the preceding fiscal year all such financial
information described above to be in reasonable form and detail and
reasonably acceptable to the Administrative Agent, and accompanied by a
certificate of the chief financial officer of the Borrower to the effect
that such quarterly financial statements fairly present in all material
respects the financial condition of the Consolidated Group and have been
prepared in accordance with GAAP, subject to changes resulting from
audit and normal year-end audit adjustments and (ii) a quarterly
operating statement for each Property.
(c) Officer's Certificate. At the time of delivery of the financial
statements provided for in Sections 7.1(a) and 7.1(b) above and within
45 days after the end of the fourth fiscal quarter of the Borrower, a
certificate of the chief financial officer of the Borrower,
substantially in the form of Exhibit 7.1(c), (i) demonstrating
compliance with the financial covenants contained in Section 7.2 by
calculation thereof as of the end of each such fiscal period and
demonstrating compliance with Sections 8.6, 8.7 and 8.12, (ii)
60
66
stating that no Default or Event of Default exists, or if any Default or
Event of Default does exist, specifying the nature and extent thereof
and what action the Borrower proposes to take with respect thereto,
(iii) attaching quarterly rent rolls, tenant sales performance data (if
available) and a leasing activity summary for the most recently ended
fiscal quarter for each Borrowing Base Property and (iv) attaching an
operating statement for each Property for the most recent fiscal
quarter.
(d) Borrowing Base Certificate. (i) At the time of the delivery of
the financial statements provided for in Sections 7.1(a) and (b), (ii)
within 45 days after the end of the fourth fiscal quarter of the
Consolidated Group, (iii) in accordance with the requirements of
Sections 8.5 and 8.12, (iv) at any time the Borrower wishes to add or
remove a Borrowing Base Property in accordance with the definition of
Borrowing Base Property set forth in Section 1.1 (but, in the case of
this clause (iv), no more than once per calendar month), (v) at any time
any Borrowing Base Property fails to qualify as a Borrowing Base
Property and (vi) at any time, and from time to time, at the request of
the Administrative Agent or the Required Lenders, the Borrower shall
deliver a Borrowing Base Certificate, setting forth the Borrowing Base
and Facility Availability as of such date, together with such supporting
data as is required to be attached thereto or as otherwise requested by
the Administrative Agent or the Required Lenders.
(e) Annual Information and Projections. Within 60 days after the
end of each fiscal year of the Consolidated Group, projected financial
statements (including projected consolidated balance sheets and income
and cash flow projections) for the Consolidated Group on a GAAP basis
for the next succeeding two fiscal year periods.
(f) Auditor's Reports. Promptly upon receipt thereof, a copy of any
"management letter" submitted by independent accountants to any member
of the Consolidated Group in connection with any annual, interim or
special audit of the books of such member of the Consolidated Group.
(g) Reports. Promptly upon transmission or receipt thereof, (i)
copies of any filings and registrations with, and reports to or from,
the Securities and Exchange Commission, or any successor agency, and
copies of all financial statements, proxy statements, notices and
reports as any member of the Consolidated Group shall send to its
equityholders generally, (ii) copies of all income tax returns filed by
a member of the Consolidated Group as may be requested by the
Administrative Agent and (iii) upon the written request of the
Administrative Agent, all reports and written information to and from
the United States Environmental Protection Agency, or any state or local
agency responsible for environmental matters, the United States
Occupational Health and Safety Administration, or any state or local
agency responsible for health and safety matters, or any successor
agencies or authorities concerning environmental, health or safety
matters.
(h) Notices. Upon a Credit Party obtaining knowledge thereof, such
Credit Party will give written notice to the Administrative Agent
immediately of: (i) the occurrence of an event or condition constituting
a Default or Event of Default, stating that such notice is a "notice of
default" and specifying the nature and existence thereof and what
61
67
action the Credit Parties propose to take with respect thereto, (ii) the
adoption by any member of the Consolidated Group of any material change
in accounting or financial reporting policies, (iii) any change in
either Debt Rating of the Borrower, and (iv) the occurrence of any of
the following with respect to any member of the Consolidated Group (A)
the pendency or commencement of any litigation, arbitral or governmental
proceeding against any member of the Consolidated Group which if
adversely determined would have or would reasonably be expected to have
(1) damages in the amount of $200,000 or more or (2) a Material Adverse
Effect or (B) the institution of any proceedings against any member of
the Consolidated Group with respect to, or the receipt of notice by such
Person of potential liability or responsibility for, violation or
alleged violation of any federal, state or local law, rule or
regulation, including, but not limited to, Environmental Laws.
(i) ERISA. Upon a member of the Consolidated Group or any ERISA
Affiliate obtaining knowledge thereof, such member of the Consolidated
Group or ERISA Affiliate will give written notice to the Administrative
Agent and each of the Lenders promptly (and in any event within five
Business Days) of: (i) any event or condition, including, but not
limited to, any Reportable Event, that constitutes, or might reasonably
lead to, an ERISA Event; (ii) with respect to any Multiemployer Plan,
the receipt of notice as prescribed in ERISA or otherwise of any
withdrawal liability assessed against a member of the Consolidated Group
or any ERISA Affiliate, or of a determination that any Multiemployer
Plan is in reorganization or insolvent (both within the meaning of Title
IV of ERISA); (iii) the failure to make full payment on or before the
due date (including extensions) thereof of all amounts which a member of
the Consolidated Group or any ERISA Affiliate is required to contribute
to each Plan pursuant to its terms and as required to meet the minimum
funding standard set forth in ERISA and the Code with respect thereto;
or (iv) any change in the funding status of any Plan that could have a
Material Adverse Effect; in each case, together with a description of
any such event or condition or a copy of any such notice and a statement
by the chief financial officer of the Borrower briefly setting forth the
details regarding such event, condition, or notice, and the action, if
any, which has been or is being taken or is proposed to be taken by such
member of the Consolidated Group or such ERISA Affiliate with respect
thereto. Promptly upon request, the Credit Parties shall furnish the
Administrative Agent and the Lenders with such additional information
concerning any Plan as may be reasonably requested, including, but not
limited to, copies of each annual report/return (Form 5500 series), as
well as all schedules and attachments thereto required to be filed with
the Department of Labor and/or the Internal Revenue Service pursuant to
ERISA and the Code, respectively, for each "plan year" (within the
meaning of Section 3(39) of ERISA).
(j) Environmental.
(i) Subsequent to a notice from any Governmental
Authority that would reasonably cause concern or during the
existence of an Event of Default, and upon the written request of
the Administrative Agent, the Credit Parties will furnish or cause
to be furnished to the Administrative Agent, at the Credit Parties'
expense, an updated report of an environmental assessment of
reasonable scope, form and depth, including, where appropriate,
invasive soil or groundwater
62
68
sampling, by a consultant reasonably acceptable to the
Administrative Agent as to the nature and extent of the presence of
any Hazardous Materials on any Property and as to the compliance by
the Combined Parties with Environmental Laws. If the Credit Parties
fail to deliver such an environmental report within seventy-five
(75) days after receipt of such written request then the
Administrative Agent may arrange for same, and the Credit Parties
hereby grant, shall cause their Subsidiaries to grant and shall use
their best efforts to cause any other Combined Parties to grant to
the Administrative Agent and its representatives access to the
Properties and a license of a scope reasonably necessary to
undertake such an assessment (including, where appropriate,
invasive soil or groundwater sampling). The reasonable cost of any
assessment arranged for by the Administrative Agent pursuant to
this provision will be payable by the Credit Parties on demand and
added to the Obligations hereunder.
(ii) Each member of the Consolidated Group will conduct
and complete all investigations, studies, sampling, and testing and
all remedial, removal, and other actions necessary to address all
Hazardous Materials on, from, or affecting any Property to the
extent necessary to be in compliance with all Environmental Laws
and all other applicable federal, state, and local laws,
regulations, rules and policies and with the orders and directives
of all Governmental Authorities exercising jurisdiction over such
Property to the extent any failure to so comply would have or would
reasonably be expected to have a Material Adverse Effect.
(k) Other Information. With reasonable promptness upon any such
request, such other information regarding the Properties or regarding
the business, assets or financial condition of the Combined Parties as
the Administrative Agent or any Lender may reasonably request.
7.2 FINANCIAL COVENANTS.
(a) Consolidated Tangible Net Worth. Consolidated Tangible Net
Worth shall at all times be greater than or equal to the sum of (i) 85%
of the amount of consolidated owners' equity of the Consolidated Group,
as determined in accordance with GAAP, as of the date of consummation of
the Western Acquisition and after giving effect thereto plus (ii) 85% of
the Minority Interests of the Consolidated Group as of the date of
consummation of the Western Acquisition and after giving effect thereto
plus (iii) 85% of the Net Cash Proceeds from all Equity Issuances
occurring on and after the Closing Date.
(b) Fixed Charge Coverage Ratio. As of the last day of each fiscal
quarter of the Consolidated Group, the Fixed Charge Coverage Ratio shall
be greater than or equal to 2.0 to 1.0.
(c) Leverage Ratio. Except as set forth below, the Leverage Ratio
shall at all times be less than or equal to 0.50 to 1.0.
Notwithstanding the above, if, as a direct result of the consummation by
any Credit Party of a Significant Acquisition, the Leverage Ratio
exceeds .50 to 1.0 but is less than or equal to
63
69
.55 to 1.0, the Borrower may request in writing to the Administrative
Agent that the maximum Leverage Ratio increase to .55 to 1.0 for a
period not to exceed six months from such request (the "Temporary
Leverage Ratio Period"); provided that (a) the Administrative Agent must
consent to such increase in its sole discretion (such consent not to be
unreasonably withheld) and (b) if the Borrower does request the increase
in the maximum Leverage Ratio as set forth above, and the Administrative
Agent does so consent, (i) the Borrower must pay the Margin Increase on
all outstanding Loans during the Temporary Leverage Ratio Period and
(ii) during the Temporary Leverage Ratio Period, the Leverage Ratio must
at all times be less than or equal to .55 to 1.0.
(d) Unencumbered Debt Service Coverage Ratio. As of the last day of
each fiscal quarter of the Consolidated Group, the Unencumbered Debt
Service Coverage Ratio shall be greater than or equal to 2.0 to 1.0.
(e) Secured Debt Ratio. The Secured Debt Ratio shall at all times
be less than or equal to .35 to 1.0.
(f) Unsecured Debt Ratio. The Unsecured Debt Ratio shall at all
times be less than or equal to .50 to 1.0.
7.3 PRESERVATION OF EXISTENCE.
Each of the Credit Parties will, and will cause each member of the
Consolidated Group to, do all things necessary to preserve and keep in full
force and effect its existence, rights, franchises, intellectual property and
authority except as permitted by Section 8.4. Without limiting the generality of
the foregoing, the Borrower will do all things necessary to maintain its status
as a REIT.
7.4 MAINTENANCE OF ASSETS.
Each of the Credit Parties will, and will cause each member of the
Consolidated Group to, maintain and preserve its Properties and all other assets
in good repair, working order and condition, normal wear and tear excepted, and
will make, or cause to be made, in the Properties and other assets, from time to
time, all repairs, renewals, replacements, extensions, additions, betterments
and improvements thereto as may be needed or proper, in accordance with normal
industry practice.
7.5 INSURANCE.
Each of the Credit Parties will, and will cause each member of the
Consolidated Group to, at all times maintain in full force and effect insurance
(including worker's compensation insurance, liability insurance, casualty
insurance and business interruption insurance) with reputable national companies
that are not Affiliates of the Borrower, in such amounts, covering such risks
and liabilities and with such deductibles as are in accordance with normal
industry practice.
64
70
7.6 PERFORMANCE OF OBLIGATIONS.
Each of the Credit Parties will, and will cause each member of the
Consolidated Group to, perform in all material respects all of its obligations
under the terms of all material agreements, indentures, mortgages, security
agreements or other debt instruments to which it is a party or by which it or
its properties may be bound.
7.7 COMPLIANCE WITH LAW.
Each of the Credit Parties will, and will cause each member of the
Consolidated Group to, comply in all material respects with all Requirements of
Law, and all applicable material restrictions imposed by all Governmental
Authorities, applicable to it or its property (including, without limitation,
Environmental Laws and ERISA).
7.8 PAYMENT OF TAXES AND OTHER INDEBTEDNESS.
Each of the Credit Parties will, and will cause each member of the
Consolidated Group to, pay, settle or discharge (a) all taxes, assessments and
governmental charges or levies imposed upon it, or upon its income or profits,
or upon any of its properties, before they shall become delinquent, (b) all
lawful claims (including claims for labor, materials and supplies) which, if
unpaid, might give rise to a Lien upon any of its properties, and (c) except as
prohibited hereunder, all of its other Indebtedness as it shall become due;
provided, however, that such Credit Party or any member of the Consolidated
Group shall not be required to pay any such tax, assessment, charge, levy, claim
or Indebtedness which is being contested in good faith by appropriate
proceedings and as to which adequate reserves therefor have been established in
accordance with GAAP, unless the failure to make any such payment (i) would give
rise to an immediate right to foreclose on a Lien securing such amounts or (ii)
would have a Material Adverse Effect.
7.9 BOOKS AND RECORDS.
Each of the Credit Parties will, and will cause each member of the
Consolidated Group to, keep complete and accurate books and records of its
transactions in accordance with good accounting practices on the basis of GAAP
(including the establishment and maintenance of appropriate reserves).
7.10 AUDITS/INSPECTIONS.
(a)(i) At all times prior to an Event of Default, upon reasonable (and
in any case, no less than 48 hours') notice and during normal business hours and
(ii) at any time and without notice upon the occurrence and during the
continuation of an Event of Default, (b) subject to the rights of tenants upon
such Property, and (c) at the expense of the Credit Parties, each Credit Party
will, will cause its Subsidiaries to, and will use its best efforts to cause any
other Combined Party to, permit representatives appointed by the Administrative
Agent, including, without limitation, independent accountants, agents, attorneys
and appraisers to visit and inspect such Credit Party's, Subsidiary's or other
Combined Party's property, including, without limitation, the Properties,
including its books and records, its accounts receivable and equipment, its
facilities and its other business assets, and to
65
71
make photocopies or photographs thereof and to write down and record any
information such representative obtains and shall permit the Administrative
Agent or its representatives to investigate and verify the accuracy of
information provided to it or to the Lenders, and to discuss all such matters
with the officers, employees and representatives of the Credit Parties, the
members of the Consolidated Group and any other Combined Party.
7.11 USE OF PROCEEDS.
The Borrower will use the proceeds of the Loans solely for (a) general
working capital in the ordinary course, (b) to fund acquisitions, development
and construction of, and improvements to, Properties, (c) refinancing existing
and future Indebtedness, including the repayment of Indebtedness in connection
with the Western Acquisition, and (d) for other lawful corporate purposes. The
Borrower will use the Letters of Credit solely for the purposes set forth in
Section 2.2.
7.12 ADDITIONAL CREDIT PARTIES.
Prior to adding a Property to the Borrowing Base, the Borrower shall
notify the Administrative Agent and, if the owner of such Property is not
already a Credit Party, shall cause such Person to: (a) execute a Joinder
Agreement in substantially the form of Exhibit 7.12 and (b) deliver such other
documentation as the Administrative Agent may reasonably request in connection
with the foregoing, including, without limitation, information regarding the
Properties owned by such Person, including title and environmental reports,
certified resolutions and other organizational and authorizing documents of such
Person and favorable opinions of counsel to such Person (which shall cover,
among other things, the legality, validity, binding effect and enforceability of
the documentation referred to above) in each case in form and substance
acceptable to the Administrative Agent.
7.13 DISTRIBUTIONS FROM DOWN-REITs.
The Borrower shall, from time to time, upon the request of the
Administrative Agent, take all actions that it is legally entitled to take to
cause each Down-REIT that is the owner of a Borrowing Base Property to make a
distribution to its equity owners, including the Borrower, of all funds then
legally available for distribution.
7.14 CONSENTS.
On or before 90 days after the Closing Date, the Borrower shall obtain
the consent of each of the mortgagees of the Properties set forth on Schedule
6.5 and take such other action as may be necessary to ensure that any default
under any mortgage, loan document or other agreement with such mortgagee as a
result of the consummation of the Western Acquisition and/or the failure to
obtain such consents prior to such consummation is cured and ceases to exist.
66
72
SECTION 8
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect and until the Loans and LOC Obligations, together
with interest, fees and other obligations hereunder, have been paid in full and
the Commitments and Letters of Credit hereunder shall have terminated:
8.1 INDEBTEDNESS.
No Credit Party will, nor will it permit any member of the Consolidated
Group to, contract, create, incur, assume or permit to exist any Indebtedness,
except:
(a) Indebtedness arising under this Credit Agreement and the other
Credit Documents;
(b) Indebtedness arising under the Bridge Facility;
(c) Indebtedness owing from one Credit Party to another Credit
Party;
(d) Indebtedness in respect of current accounts payable and accrued
expenses incurred in the ordinary course of business;
(e) Indebtedness that is secured by Properties (other than
Borrowing Base Properties) but that is non-recourse to any member of the
Consolidated Group;
(f) the Senior Notes or other senior unsecured notes of the
Borrower issued as a Public Debt Issuance, as long as the proceeds
thereof are forwarded to the Administrative Agent as a mandatory
prepayment in accordance with Section 3.3(b)(iv); and
(g) that certain letter of credit, dated as of November 13, 2000,
in the stated amount of $3,476,800, issued to ▇▇▇▇ ▇▇▇▇, Inc. as
beneficiary by Sanwa Bank California for the account of the Borrower.
8.2 LIENS.
No Credit Party will, nor will it permit any Subsidiary to, contract,
create, incur, assume or permit to exist:
(a) any Lien with respect to any Borrowing Base Property, except
for the following permissible Liens:
(i) Liens for taxes not yet due or Liens for taxes being
contested in good faith by appropriate proceedings for which
adequate reserves determined in accordance with GAAP have been
established (and as to which the property subject
67
73
to any such Lien is not yet subject to foreclosure, sale or loss on
account thereof); and
(ii) Liens in respect of such Borrowing Base Property
imposed by law arising in the ordinary course of business such as
materialmens', mechanics', warehousemens', carriers', and other
nonconsensual statutory Liens which are not yet due and payable or
which are being contested in good faith by appropriate proceedings
for which adequate reserves determined in accordance with GAAP have
been established (and as to which the property subject to any such
Lien is not yet subject to foreclosure, sale or loss on account
thereof).
(b) any Lien, other than in favor of the Administrative Agent, for
the benefit of the Lenders, with respect to the Collateral.
8.3 NATURE OF BUSINESS.
No Credit Party will, nor will it permit any member of the Consolidated
Group to, alter the character of its business from that of the investment in,
and leasing and operation of, retail commercial real estate.
8.4 CONSOLIDATION AND MERGER.
Except as set forth below, no Credit Party will, nor will it permit any
member of the Consolidated Group to, enter into any transaction of merger or
consolidation or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution). Notwithstanding the foregoing, (a) any Credit Party
may be merged or consolidated with or into another Credit Party, (b) a Person
may be merged with or into a Credit Party or (c) any member of the Consolidated
Group that is not a Credit Party may merge with or into another Person that is
not a Credit Party; provided that (i) if the transaction is between the Borrower
and another Person, the Borrower shall be the continuing or surviving entity;
(ii) if that transaction is between a Credit Party and a Person that is not a
Credit Party, the Credit Party shall be the surviving entity; (iii) the
Administrative Agent shall be given 30 days prior written notice of any such
action; (iv) the Credit Parties shall execute and deliver such documents,
instruments, certificates and opinions in connection therewith as the
Administrative Agent may reasonably request; and (v) after giving effect
thereto, (A) the Lenders shall continue to have a perfected, first priority Lien
upon the Collateral and (B) no Default or Event of Default shall exist.
8.5 SALE OR LEASE OF ASSETS.
No Property may be conveyed, sold, leased, transferred or otherwise
disposed of except if, after giving effect thereto, (i) the Credit Parties are
in compliance on a pro forma basis with the financial covenants set forth in
Section 7.2, (ii) no Default or Event of Default exists and (iii) if such
Property is a Borrowing Base Property, the Borrower provides the Administrative
Agent with an updated Borrowing Base Certificate reflecting the sale of such
Property. The Consolidated Group will not sell, or agree to sell, all or
substantially all of their assets.
68
74
8.6 INVESTMENTS.
During the term of this Credit Agreement, no Credit Party will, nor will
it permit any member of the Consolidated Group to, make Investments that exceed,
in the aggregate, 15% of Total Assets as calculated as of the end of the most
recent fiscal quarter.
8.7 RESTRICTED PAYMENTS.
(a) No Credit Party will, nor will it permit any member of the
Consolidated Group to, directly or indirectly, declare or pay any
dividends or make any other distribution upon any of its Capital Stock
in any fiscal quarter that exceed, in the aggregate, the lesser of (i)
100% of Funds From Operations for such quarter and (ii) 95% of the
average quarterly Funds From Operations for the immediately preceding
four fiscal quarters; provided that (i) any Subsidiary of a Credit Party
may pay dividends or make distributions to its parent and (ii) the
Borrower may pay such dividends as is necessary to maintain its status
as a REIT.
(b) Other than as may be necessary in connection with the
conversion of operating partnership units or operating limited liability
company units, as the case may be, of: (i) Pan Pacific (Portland), LLC,
(ii) Pan Pacific (Rancho Las Palmas), LLC, (iii) Pan Pacific (▇▇▇▇▇▇),
L.P. or (iv) Pan Pacific (Pinecreek), L.P., no Credit Party will, nor
will it permit any member of the Consolidated Group to, at any time
purchase, redeem or otherwise acquire or retire or make any provisions
for the redemption, acquisition or retirement of any of its Capital
Stock of any type or class or any warrants or options to purchase any
such Capital Stock.
8.8 TRANSACTIONS WITH AFFILIATES.
No Credit Party will, nor will it permit any member of the Consolidated
Group to, enter into any transaction or series of transactions, whether or not
in the ordinary course of business, with any officer, director, shareholder,
Subsidiary, Combined Party or Affiliate other than on terms and conditions
substantially as favorable as would be obtainable in a comparable arm's-length
transaction with a Person other than an officer, director, shareholder,
Subsidiary, Combined Party or Affiliate.
8.9 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS.
No Credit Party will, nor will it permit any member of the Consolidated
Group to, (a) change its fiscal year or (b) change its organizational or
formation documents in any manner that would have an adverse effect on the
rights of the Lenders under the Credit Documents; provided that (i) the Borrower
may take such action, with prior written notice to the Administrative Agent, as
is necessary to maintain its status as a REIT and (ii) the Credit Parties will
provide prompt written notice of any change made in compliance with the terms of
this Section 8.9.
8.10 NO LIMITATIONS.
No Credit Party will, nor will it permit any member of the Consolidated
Group to, directly
69
75
or indirectly, create or otherwise cause, incur, assume, suffer or permit to
exist or become effective any consensual encumbrance or restriction of any kind
on the ability of any such Person to (a)(i) pay dividends or make any other
distribution of any of such Person's Capital Stock, (ii) pay any Indebtedness
owed to the Borrower or any other Credit Party, (iii) make loans or advances to
any Credit Party or (iv) transfer any of its property to any Credit Party, or
(b) repay or prepay the Loans and other Obligations or to perform its
obligations hereunder and under the other Credit Documents.
8.11 OTHER NEGATIVE PLEDGES.
No Credit Party will, nor will it permit any member of the Consolidated
Group to, enter into, assume or become subject to any agreement prohibiting or
otherwise restricting the creation or assumption of any Lien upon its Properties
or assets, whether now owned or hereafter acquired, or requiring the grant of
any security for such obligation if security is given for some other obligation
except as provided under the Credit Documents.
8.12 CONSTRUCTION AND DEVELOPMENT.
No Credit Party will, nor will it permit any member of the Consolidated
Group to, at any time (a) commit to, commence or continue or (b) make an
Investment in any Combined Party that is committed to, commencing or continuing,
construction of any improvements on any undeveloped or partially developed
Property or Properties, if the sum, without duplication, of (i) with respect to
clause (a) above, the aggregate cost to date of all such construction, together
with the aggregate estimated cost to complete such construction, plus (ii) with
respect to clause (b) above, the aggregate Investments to date, together with
the required or estimated future Investments of members of the Consolidated
Group in all such Combined Parties, would exceed 10% of the Aggregate Adjusted
Current Value. Furthermore, if the limitation set forth in this Section 8.12
shall cause a Combined Party to cease construction of or development on a
Borrowing Base Development Property, such Development Property shall be excluded
from the Borrowing Base and the Borrower shall provide the Administrative Agent
with a Borrowing Base Certificate reflecting such exclusion.
SECTION 9
EVENTS OF DEFAULT
9.1 EVENTS OF DEFAULT.
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default"):
(a) Payment. The Credit Parties shall default in the payment (i)
when due of any principal amount of any Loans or any reimbursement
obligation arising from drawings under Letters of Credit or (ii) within
five days of when due of any interest, fees or other amounts owing
hereunder, under any of the other Credit Documents or in connection
herewith.
70
76
(b) Representations. Any representation, warranty or statement made
or deemed to be made by any Credit Party herein, in any of the other
Credit Documents, or in any statement or certificate delivered or
required to be delivered pursuant hereto or thereto shall prove untrue
in any material respect on the date as of which it was made or deemed to
have been made.
(c) Covenants. Any Credit Party shall:
(i) default in the due performance or observance of any
term, covenant or agreement contained in Sections 7.2, 7.3, 7.7,
7.10, 7.11 or 8.1 through 8.12 inclusive; provided that if the
Credit Parties fail to comply with Section 7.2(c) solely as a
result of a change in the Applicable Cap Rate by the Lenders, a
Default or an Event of Default shall not exist unless the Credit
Parties also fail to comply with Section 7.2(c) as of the last day
of any subsequent fiscal quarter of the Consolidated Group;
(ii) default in the due performance or observance by it
of any term, covenant or agreement contained in Section 7.1 and
such default shall continue unremedied for a period of five
Business Days after the earlier of a Credit Party becoming aware of
such default or notice thereof given by the Administrative Agent;
or
(iii) default in the due performance or observance by
it of any term, covenant or agreement (other than those referred to
in subsections (a), (b) or (c)(i) or (ii) of this Section 9.1)
contained in this Credit Agreement and such default shall continue
unremedied for a period of at least 30 days after the earlier of a
Credit Party becoming aware of such default or notice thereof given
by the Administrative Agent.
(d) Other Credit Documents. (i) Any Credit Party shall default in
the due performance or observance of any term, covenant or agreement in
any of the other Credit Documents and such default shall continue
unremedied for a period of at least 30 days after the earlier of a
Credit Party becoming aware of such default or notice thereof given by
the Administrative Agent, or (ii) any Credit Document (or any provision
of any Credit Document, including Section 4 of this Credit Agreement)
shall fail to be in full force and effect or any Credit Party shall so
assert or any Credit Document shall fail to give the Administrative
Agent and/or the Lenders the security interests, liens, rights, powers
and privileges purported to be created thereby.
(e) Bankruptcy, etc. The occurrence of any of the following with
respect to any member of the Consolidated Group (i) a court or
governmental agency having jurisdiction in the premises shall enter a
decree or order for relief in respect of any member of the Consolidated
Group in an involuntary case under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect, or appoint a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar
official of any member of the Consolidated Group
71
77
or for any substantial part of its property or ordering the winding up
or liquidation of its affairs; or (ii) an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter
in effect is commenced against any member of the Consolidated Group and
such petition remains unstayed and in effect for a period of 60
consecutive days; or (iii) any member of the Consolidated Group shall
commence a voluntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or consent to the entry of
an order for relief in an involuntary case under any such law, or
consent to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar
official of such Person or any substantial part of its property or make
any general assignment for the benefit of creditors; (iv) any member of
the Consolidated Group shall admit in writing its inability to pay its
debts generally as they become due; or (v) any writ or warrant of
attachment or execution or similar process shall be issued or levied
against all or any material part of the property of any member of the
Consolidated Group and is not released, vacated or fully bonded within
30 days after its issue or levy.
(f) Defaults under Other Agreements. With respect to any
Indebtedness (other than Indebtedness outstanding under this Credit
Agreement) of any member of the Consolidated Group: (i) such member of
the Consolidated Group shall (A) default in any payment (beyond the
applicable grace period with respect thereto, if any) with respect to
any such Indebtedness, or (B) default (after giving effect to any
applicable grace period) in the observance or performance of any term,
covenant or agreement relating to such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto, or any
other event or condition shall occur or condition exist, the effect of
which default or other event or condition is to cause, or permit, the
holder or holders of such Indebtedness (or trustee or agent on behalf of
such holders) to cause (determined without regard to whether any notice
or lapse of time is required) any such Indebtedness to become due prior
to its stated maturity; or (ii) any such Indebtedness shall be declared
due and payable, or required to be prepaid other than by a regularly
scheduled required prepayment prior to the stated maturity thereof; or
(iii) any such Indebtedness shall mature and remain unpaid; provided
that, notwithstanding anything to the contrary in this subsection
9.1(f), a default under the Indebtedness owed to each of the mortgagees
of the Properties set forth on Schedule 6.5 shall not be deemed an Event
of Default hereunder if such default (x) occurs solely as a result of
the consummation of the Western Acquisition and (y) ceases to exist on
or before 90 days following the Closing Date.
(g) Judgments. One or more judgments, orders, or decrees shall be
entered against any one or more members of the Consolidated Group (i)
involving a liability of $500,000 or more, in the aggregate (to the
extent not paid or covered by insurance provided by a carrier who has
acknowledged coverage) or (ii) that would have or would reasonably be
expected to have a Material Adverse Effect, and such judgments, orders
or decrees (A) are the subject of any enforcement proceeding commenced
by any creditor or (B) shall continue unsatisfied, undischarged and
unstayed for a period ending on the first to occur of (x) the last day
on which such judgment, order or decree becomes final and unappealable
or (y) 45 days.
72
78
(h) ERISA Events. The occurrence of any of the following events or
conditions if such event or occurrence would, or would reasonably be
likely to, result in liability in excess of $500,000: (i) any
"accumulated funding deficiency," as such term is defined in Section 302
of ERISA and Section 412 of the Code, whether or not waived, shall exist
with respect to any Plan, or any lien shall arise on the assets of a
member of the Consolidated Group or any ERISA Affiliate in favor of the
PBGC or a Plan; (ii) an ERISA Event shall occur with respect to a Single
Employer Plan, which is, in the reasonable opinion of the Administrative
Agent, likely to result in the termination of such Plan for purposes of
Title IV of ERISA; (iii) an ERISA Event shall occur with respect to a
Multiemployer Plan or Multiple Employer Plan, which is, in the
reasonable opinion of the Administrative Agent, likely to result in (A)
the termination of such Plan for purposes of Title IV of ERISA, or (B) a
member of the Consolidated Group or any ERISA Affiliate incurring any
liability in connection with a withdrawal from, reorganization of
(within the meaning of Section 4241 of ERISA), or insolvency (within the
meaning of Section 4245 of ERISA) of such Plan; (iv) any prohibited
transaction (within the meaning of Section 406 of ERISA or Section 4975
of the Code) or breach of fiduciary responsibility shall occur which may
subject a member of the Consolidated Group or any ERISA Affiliate to any
liability under Sections 406, 409, 502(i), or 502(l) of ERISA or Section
4975 of the Code, or under any agreement or other instrument pursuant to
which a member of the Consolidated Group or any ERISA Affiliate has
agreed or is required to indemnify any Person against any such
liability; or (v) a member of the Consolidated Group or any ERISA
Affiliate fails to pay when due, after the expiration of any applicable
grace period, any installment payment with respect to its withdrawal
liability under Section 4201 of ERISA under a Multiemployer Plan in an
aggregate amount in excess of $500,000.
(i) Ownership. There shall occur a Change of Control.
(j) Management. ▇▇▇▇▇▇ ▇▇▇▇ is no longer President and Chief
Executive Officer of, or is no longer active in the business of, the
Borrower.
(k) REIT Status. The Borrower does not maintain its REIT status or
is no longer deemed to be a REIT.
(l) Bridge Facility. An Event of Default (as defined in the Bridge
Facility) shall occur.
9.2 ACCELERATION; REMEDIES.
Upon the occurrence of an Event of Default, and at any time thereafter
unless and until such Event of Default has been waived in writing by the
Required Lenders (or the Lenders as may be required hereunder), the
Administrative Agent may, or, upon the request and direction of the Required
Lenders, shall, by written notice to the Borrower, take any of the following
actions without prejudice to the rights of the Administrative Agent or any
Lender to enforce its claims against the Borrower, except as otherwise
specifically provided for herein:
(a) Termination of Commitments. Declare the Commitments terminated
73
79
whereupon the Commitments shall be immediately terminated.
(b) Acceleration of Loans. Declare the unpaid principal of and any
accrued interest in respect of all Loans, any reimbursement obligations
arising from drawings under Letters of Credit and any and all other
Indebtedness or obligations of any and every kind owing by a Credit
Party to any of the Lenders hereunder to be due whereupon the same shall
be immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Credit
Parties.
(c) Cash Collateral. Direct the Credit Parties to pay (and the
Credit Parties agree that upon receipt of such notice, or upon the
occurrence of an Event of Default under Section 9.1(e), they will
immediately pay) to the Administrative Agent additional cash, to be held
by the Administrative Agent, for the benefit of the Lenders, in a cash
collateral account as additional security for the LOC Obligations in
respect of subsequent drawings under all then outstanding Letters of
Credit in an amount equal to the maximum aggregate amount which may be
drawn under all Letters of Credits then outstanding.
(d) Sale of Down-REIT Properties. Direct the Borrower to (and the
Borrower agrees that upon receipt of such notice, or upon the occurrence
of an Event of Default under Section 9.1(e), the Borrower will)
immediately use all legal and available means to: (i) cause the sale of
all Borrowing Base Properties owned by Down-REITs and (ii) forward the
Net Cash Proceeds from such sales to the Administrative Agent for
distribution to the Lenders pursuant to Section 9.3.
(e) Enforcement of Rights. Enforce any and all rights and interests
created and existing under the Credit Documents, including, without
limitation, all rights and remedies existing against a Guarantor, all
rights of set-off and all rights under the Pledge Agreement and with
respect to the Collateral.
Notwithstanding the foregoing, if an Event of Default specified in Section
9.1(e) shall occur, then the Commitments shall automatically terminate and all
Loans, all accrued interest in respect thereof, all accrued and unpaid fees, all
reimbursement obligations under Letters of Credit and all other indebtedness or
obligations owing to the Lenders hereunder shall immediately become due and
payable without the giving of any notice or other action by the Administrative
Agent or the Lenders, which notice or other action is expressly waived by the
Credit Parties.
Notwithstanding the delegation by the Lenders of certain enforcement powers to
the Administrative Agent, each Lender has, to the extent permitted by law, a
separate right of payment and shall be considered a separate "creditor" holding
a separate "claim" within the meaning of Section 101(5) of the Bankruptcy Code
or any other insolvency statute.
74
80
9.3 ALLOCATION OF PAYMENTS AFTER EVENT OF DEFAULT.
Notwithstanding any other provisions of this Credit Agreement, upon the
occurrence and during the continuation of an Event of Default, all amounts
collected or received by the Administrative Agent or any Lender on account of
amounts outstanding under any of the Credit Documents, or in respect of the
Collateral, shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including, without limitation, reasonable Attorney Costs) of
the Administrative Agent in connection with enforcing the rights of the
Lenders under the Credit Documents and any protective advances made by
the Administrative Agent with respect to the Collateral pursuant to the
Pledge Agreement;
SECOND, to payment of any fees owed to the Administrative Agent;
THIRD, to the payment of all reasonable out-of-pocket costs and
expenses, (including, without limitation, reasonable Attorney Costs) of
each of the Lenders in connection with enforcing its rights under the
Credit Documents;
FOURTH, to the payment of all accrued fees and interest payable to
the Lenders hereunder;
FIFTH, to the payment of the outstanding principal amount of the
Loans, and unreimbursed drawings under Letters of Credit, to the payment
or cash collateralization of the outstanding LOC Obligations pro rata,
as set forth below;
SIXTH, to all other obligations which shall have become due and
payable under the Credit Documents and not repaid pursuant to clauses
"FIRST" through "FIFTH" above; and
SEVENTH, to the payment of the surplus, if any, to whoever may be
lawfully entitled to receive such surplus.
In carrying out the foregoing, (a) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (b) each of the Lenders shall receive an amount equal to
its pro rata share (based on the proportion that the then outstanding Loans and
LOC Obligations owed to such Lender bears to the aggregate then outstanding
Loans and LOC Obligations) of amounts available to be applied pursuant to
clauses "THIRD", "FOURTH," "FIFTH," and "SIXTH" above and (c) to the extent that
any amounts available for distribution pursuant to clause "FIFTH" above are
attributable to the issued but undrawn amount of outstanding Letters of Credit,
such amounts shall be held by the Administrative Agent in a cash collateral
account and applied (x) first, to reimburse the Issuing Lender from time to time
for any drawings under such Letters of Credit and (y) then, following the
expiration of all Letters of Credit, to all other obligations of the types
described in clauses "FIFTH" and "SIXTH" above in the manner provided in this
Section 9.3.
75
81
SECTION 10
AGENCY PROVISIONS
10.1 APPOINTMENT.
(a) Each Lender hereby irrevocably appoints, designates and
authorizes the Administrative Agent to take such action on its behalf
under the provisions of this Credit Agreement and each other Credit
Document and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Credit Agreement or any
other Credit Document, together with such powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere herein or in any other Credit Document, the
Administrative Agent shall not have any duties or responsibilities,
except those expressly set forth herein, nor shall the Administrative
Agent have or be deemed to have any fiduciary or trustee relationship
with any Lender or participant, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into
this Credit Agreement or any other Credit Document or otherwise exist
against the Administrative Agent. Without limiting the generality of the
foregoing sentence, the use of the term "agent" herein and in the other
Credit Documents with reference to the Administrative Agent is not
intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is
intended to create or reflect only an administrative relationship
between independent contracting parties.
(b) The Issuing Lender shall act on behalf of the Lenders with
respect to any Letters of Credit issued by it and the documents
associated therewith until such time (and except for so long) as the
Administrative Agent may agree at the request of the Required Lenders to
act for the Issuing Lender with respect thereto; provided, however, that
the Issuing Lender shall have all of the benefits and immunities (i)
provided to the Administrative Agent in this Section 10 with respect to
any acts taken or omissions suffered by the Issuing Lender in connection
with Letters of Credit issued by it or proposed to be issued by it and
the application and agreements for letters of credit pertaining to the
Letters of Credit as fully as if the term "Administrative Agent" as used
in this Section 10 included the Issuing Lender with respect to such acts
or omissions, and (ii) as additionally provided herein with respect to
the Issuing Lender.
(c) First Union National Bank, in its capacity as Syndication
Agent, U.S. Bank, National Association, in its capacity as Documentation
Agent, and Dresdner Bank AG, New York and Grand Cayman Branches,
Guaranty Federal Bank, F.S.B., and ▇▇▇▇▇ Fargo Bank, N.A., in their
respective capacities as Co-Agents, shall have no duties or obligations
whatsoever under this Credit Agreement or the other Credit Documents.
10.2 DELEGATION OF DUTIES.
The Administrative Agent may execute any of its duties under this Credit
Agreement or any other Credit Document by or through agents, employees or
attorneys-in-fact and shall be
76
82
entitled to advice of counsel and other consultants or experts concerning all
matters pertaining to such duties. The Administrative Agent shall not be
responsible for the negligence or misconduct of any agent or attorney-in-fact
that it selects with reasonable care.
10.3 EXCULPATORY PROVISIONS.
No Agent-Related Person shall (a) be liable for any action taken or
omitted to be taken by any of them under or in connection with this Credit
Agreement or any other Credit Document or the transactions contemplated hereby
(except for its own gross negligence or willful misconduct in connection with
its duties expressly set forth herein), or (b) be responsible in any manner to
any Lender or participant for any recital, statement, representation or warranty
made by any Credit Party or any officer thereof, contained herein or in any
other Credit Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Administrative Agent
under or in connection with, this Credit Agreement or any other Credit Document,
or the validity, effectiveness, genuineness, enforceability or sufficiency of
this Credit Agreement or any other Credit Document, or for any failure of any
Credit Party or any other party to any Credit Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall be under any
obligation to any Lender or participant to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Credit Agreement or any other Credit Document, or to inspect the
properties, books or records of any Credit Party or any Affiliate thereof.
10.4 RELIANCE ON COMMUNICATIONS.
(a) The Administrative Agent shall be entitled to rely, and shall
be fully protected in relying, upon any writing, communication,
signature, resolution, representation, notice, consent, certificate,
affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation 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
counsel to any Credit Party), independent accountants and other experts
selected by the Administrative Agent. The Administrative Agent may deem
and treat each Lender as the owner of its interests hereunder for all
purposes unless a written notice of assignment, negotiation or transfer
thereof shall have been delivered to the Administrative Agent in
accordance with Section 11.3(b). The Administrative Agent shall be fully
justified in failing or refusing to take any action under any Credit
Document unless it shall first receive such advice or concurrence of the
Required Lenders as it deems appropriate and, if it so requests, it
shall first be indemnified to its satisfaction by the Lenders against
any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative
Agent shall in all cases be fully protected in acting, or in refraining
from acting, under this Credit Agreement or any other Credit Document in
accordance with a request or consent of the Required Lenders or all the
Lenders, if required hereunder, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders
and participants, and their respective successors and assigns. Where
this Credit Agreement expressly permits or prohibits an action unless
the Required Lenders otherwise determine, the Administrative Agent
shall,
77
83
and in all other instances, the Administrative Agent may, but shall not
be required to, initiate any solicitation for the consent or a vote of
the Lenders.
(b) For purposes of determining compliance with the conditions
specified in Section 5.1, each Lender that has signed this Credit
Agreement shall be deemed to have consented to, approved or accepted or
to be satisfied with, each document or other matter either sent by the
Administrative Agent to such Lender for consent, approval, acceptance or
satisfaction, or required thereunder to be consented to or approved by
or acceptable or satisfactory to a Lender.
10.5 NOTICE OF DEFAULT.
The Administrative Agent shall not be deemed to have knowledge or notice
of the occurrence of any Default or Event of Default, except with respect to
defaults in the payment of principal, interest and fees required to be paid to
the Administrative Agent for the account of the Lenders, unless the
Administrative Agent shall have received written notice from a Lender or the
Borrower referring to this Credit Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default." The
Administrative Agent will notify the Lenders of its receipt of any such notice.
The Administrative Agent shall take such action with respect to such Default or
Event of Default as may be reasonably directed by the Required Lenders in
accordance with Section 9.2; provided, however, that unless and until the
Administrative Agent has received any such direction, the Administrative Agent
may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Default or Event of Default as it shall deem
advisable or in the best interest of the Lenders.
10.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS.
Each Lender acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by the Administrative Agent
hereinafter taken, including any consent to and acceptance of any assignment or
review of the affairs of any Credit Party or any Affiliate thereof, shall be
deemed to constitute any representation or warranty by any Agent-Related Person
to any Lender as to any matter, including whether Agent-Related Persons have
disclosed material information in their possession. Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
any Agent-Related Person or any other Lender and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition and creditworthiness of the Credit Parties and their respective
Affiliates, and all applicable bank or other regulatory laws relating to the
transactions contemplated hereby, and made its own decision to enter into this
Credit Agreement and to extend credit to the Borrower hereunder. Each Lender
also represents that it will, independently and without reliance upon any
Agent-Related Person or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Credit Agreement and the other Credit Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly required to be furnished
78
84
to the Lenders by the Administrative Agent herein, the Administrative Agent
shall not have any duty or responsibility to provide any Lender with any credit
or other information concerning the business, prospects, operations, property,
financial and other condition or creditworthiness of any of the Credit Parties
or any of their respective Affiliates which may come into the possession of any
Agent-Related Person.
10.7 INDEMNIFICATION.
Whether or not the transactions contemplated hereby are consummated, the
Lenders shall indemnify upon demand each Agent-Related Person (to the extent not
reimbursed by or on behalf of any Credit Party and without limiting the
obligation of any Credit Party to do so), pro rata, and hold harmless each
Agent-Related Person from and against any and all Indemnified Liabilities
incurred by it; provided, however, that no Lender shall be liable for the
payment to any Agent-Related Person of any portion of such Indemnified
Liabilities resulting from such Agent-Related Person's gross negligence or
willful misconduct; it being understood that no action taken in accordance with
the directions of the Required Lenders shall be deemed to constitute gross
negligence or willful misconduct for purposes of this Section 10.7. Without
limitation of the foregoing, each Lender shall reimburse the Administrative
Agent upon demand for its ratable share of any costs or out-of-pocket expenses
(including Attorney Costs) incurred by the Administrative Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Credit Agreement, any other Credit Document, or any document contemplated
by or referred to herein, to the extent that the Administrative Agent is not
reimbursed for such expenses by or on behalf of the Credit Parties. The
undertaking in this Section 10.7 shall survive termination of the Commitments,
the payment of all Obligations hereunder and the resignation or replacement of
the Administrative Agent.
10.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY.
Bank of America and its Affiliates may make loans to, issue letters of
credit for the account of, accept deposits from, acquire equity interests in and
generally engage in any kind of banking, trust, financial advisory, underwriting
or other business with each of the Credit Parties and their respective
Affiliates as though Bank of America were not the Administrative Agent or the
Issuing Lender hereunder and without notice to or consent of the Lenders. The
Lenders acknowledge that, pursuant to such activities, Bank of America or its
Affiliates may receive information regarding any Credit Party or its Affiliates
(including information that may be subject to confidentiality obligations in
favor of such Credit Party or such Affiliate) and that the Administrative Agent
shall be under no obligation to provide such information to them. With respect
to its Loans, Bank of America shall have the same rights and powers under this
Credit Agreement as any other Lender and may exercise such rights and powers as
though it were not the Administrative Agent or the Issuing Lender, and the terms
"Lender" and "Lenders" include Bank of America in its individual capacity.
79
85
10.9 SUCCESSOR AGENT.
The Administrative Agent may, and, at the request of the Required
Lenders, with good cause, shall, resign as Administrative Agent upon 30 days'
notice to the Lenders. If the Administrative Agent resigns under this Credit
Agreement, the Required Lenders shall appoint from among the Lenders a successor
administrative agent for the Lenders which successor administrative agent (such
appointment, absent the existence of an Event of Default, to be subject to the
consent of the Borrower, which consent of the Borrower shall not be unreasonably
withheld or delayed). If no successor administrative agent is appointed prior to
the effective date of the resignation of the Administrative Agent, the
Administrative Agent may appoint, after consulting with the Lenders and the
Borrower, a successor administrative agent from among the Lenders. Upon the
acceptance of its appointment as successor administrative agent hereunder, such
successor administrative agent shall succeed to all the rights, powers and
duties of the retiring Administrative Agent and the term "Administrative Agent"
shall mean such successor administrative agent and the retiring Administrative
Agent's appointment, powers and duties as Administrative Agent shall be
terminated. After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Section 10 and Sections 11.5 and
11.10 shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was Administrative Agent under this Credit Agreement. If no
successor administrative agent has accepted appointment as Administrative Agent
by the date which is 30 days following a retiring Administrative Agent's notice
of resignation, the retiring Administrative Agent's resignation shall
nevertheless thereupon become effective and the Lenders shall perform all of the
duties of the Administrative Agent hereunder until such time, if any, as the
Required Lenders appoint a successor agent as provided for above. For the
purpose of removing the Administrative Agent pursuant to this Section 10.9, the
definition of Required Lenders shall mean solely those Lenders whose Credit
Exposure constitutes more than 66 2/3% of the Credit Exposure of all Lenders at
such time.
SECTION 11
MISCELLANEOUS
11.1 NOTICES.
Except as otherwise expressly provided herein, all notices and other
communications shall be deemed to have been duly given and shall be effective
(a) when delivered, (b) when electronic confirmation of a transmission via
telecopy (or other facsimile device) is received from such device by the sender
thereof, (c) the Business Day following the day on which the same has been
delivered prepaid (or on an invoice basis) to a reputable national overnight air
courier service, or (d) the third Business Day following the day on which the
same is sent by certified or registered mail, postage prepaid, in each case to
the respective parties at the address or telecopy numbers set forth on Schedule
11.1, or at such other address as such party may specify by written notice to
the other parties hereto.
80
86
11.2 RIGHT OF SET-OFF, AUTOMATIC DEBITS.
(a) In addition to any rights now or hereafter granted under
applicable law or otherwise, and not by way of limitation of any such
rights, upon the occurrence of an Event of Default and the commencement
of remedies described in Section 9.2, each Lender is authorized at any
time and from time to time, without presentment, demand, protest or
other notice of any kind (all of which rights being hereby expressly
waived), to set-off and to appropriate and apply any and all deposits
(general or special) and any other indebtedness at any time held or
owing by such Lender (including, without limitation, branches, agencies
or Affiliates of such Lender wherever located) to or for the credit or
the account of any Credit Party against obligations and liabilities of
such Credit Party to the Lenders hereunder, under the Notes, the other
Credit Documents or otherwise, irrespective of whether the
Administrative Agent or the Lenders shall have made any demand hereunder
and although such obligations, liabilities or claims, or any of them,
may be contingent or unmatured, and any such set-off shall be deemed to
have been made immediately upon the occurrence of an Event of Default
even though such charge is made or entered on the books of such Lender
subsequent thereto. The Credit Parties hereby agree that any Person
purchasing a participation in the Loans and Commitments hereunder
pursuant to Sections 11.3(e) or 3.8 may exercise all rights of set-off
with respect to its participation interest as fully as if such Person
were a Lender hereunder.
(b) In addition to clause (a) above, with respect to any principal
or interest payment, fee, or any other cost or expense (including
Attorney Costs), due and payable to the Administrative Agent or the
Lenders under the Credit Documents, the Credit Parties hereby
irrevocably authorize and direct the Administrative Agent to debit any
deposit account of the Credit Parties with the Administrative Agent (as
one of the Lenders) in an amount such that the aggregate amount debited
from all such deposit accounts does not exceed such payment, fee, or
other cost or expense. If there are insufficient funds in such deposit
accounts to cover the amount of the payment, fee, other cost or expense
then due, such debits will be reversed (in whole or in part, in the
Administrative Agent's sole discretion) and such amount not debited
shall be deemed to be unpaid. No such debit under this Section 11.2(b)
shall be deemed a set-off.
11.3 BENEFIT OF AGREEMENT.
(a) Generally. This Credit 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 none of the Credit
Parties may assign and transfer any of its interests (except as
permitted by Section 8.4) without the prior written consent of the
Lenders; and provided further that the rights of each Lender to
transfer, assign or grant participations in its rights and/or
obligations hereunder shall be limited as set forth below in this
Section 11.3.
(b) Assignments. Each Lender may assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this
Credit Agreement (including, without limitation, all or a portion of its
Loans, its Notes, and its Commitment); provided, however, that:
81
87
(i) each such assignment shall be to an Eligible Assignee;
(ii) except (A) in the case of an assignment to another
Lender, (B) in the case of an assignment of all of a Lender's
rights and obligations under this Credit Agreement, or (C) with the
consent of the Administrative Agent and the Borrower, any such
partial assignment shall be in an amount at least equal to
$10,000,000 (or, if less, the remaining amount of the Commitment
being assigned by such Lender) or an integral multiple of
$1,000,000 in excess thereof;
(iii) each such assignment by a Lender shall be of a
constant, and not varying, percentage of all of its rights and
obligations under this Credit Agreement and the Notes; and
(iv) the parties to such assignment shall execute and
deliver to the Administrative Agent for its acceptance an
Assignment Agreement in substantially the form of Exhibit 11.3,
together with a processing fee from the assignor of $3,500.
Upon execution, delivery, and acceptance of such Assignment Agreement,
the assignee thereunder shall be a party hereto and, to the extent of
such assignment, have the obligations, rights, and benefits of a Lender
hereunder and the assigning Lender shall, to the extent of such
assignment, relinquish its rights and be released from its obligations
under this Credit Agreement. Upon the consummation of any assignment
pursuant to this Section 11.3(b), the assignor, the Administrative Agent
and the Borrower shall make appropriate arrangements so that, if
required, new Notes are issued to the assignor and the assignee and
cancelled Notes are returned to the Borrower. If the assignee is not
incorporated under the laws of the United States of America or a state
thereof, it shall deliver to the Borrower and the Administrative Agent
certification as to exemption from deduction or withholding of taxes in
accordance with Section 3.13.
By executing and delivering an assignment agreement in accordance with
this Section 11.3(b), the assigning Lender thereunder and the assignee
thereunder shall be deemed to confirm to and agree with each other and
the other parties hereto as follows: (A) such assigning Lender warrants
that it is the legal and beneficial owner of the interest being assigned
thereby free and clear of any adverse claim and the assignee warrants
that it is an Eligible Assignee; (B) except as set forth in clause (A)
above, such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Credit Agreement, any
of the other Credit Documents or any other instrument or document
furnished pursuant hereto or thereto, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this
Credit Agreement, any of the other Credit Documents or any other
instrument or document furnished pursuant hereto or thereto or the
financial condition of any Credit Party or the performance or observance
by any Credit Party of any of its obligations under this Credit
Agreement, any of the other Credit Documents or any other instrument or
document furnished pursuant hereto or thereto; (C) such assigning Lender
and such
82
88
assignee each represents and warrants that it is legally authorized to
enter into such assignment agreement; (D) such assignee confirms that it
has received a copy of this Credit Agreement, the other Credit Documents
and such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into such assignment
agreement; (E) such assignee will independently and without reliance
upon the Administrative Agent, such assigning Lender or any other
Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Credit Agreement and the other
Credit Documents; (F) such assignee appoints and authorizes the
Administrative Agent to take such action on its behalf and to exercise
such powers under this Credit Agreement or any other Credit Document as
are delegated to the Administrative Agent by the terms hereof or
thereof, together with such powers as are reasonably incidental thereto;
and (G) such assignee agrees that it will perform in accordance with
their terms all the obligations which by the terms of this Credit
Agreement and the other Credit Documents are required to be performed by
it as a Lender.
(c) Register. The Administrative Agent shall maintain a copy of
each Assignment Agreement delivered to and accepted by it and a register
for the recordation of the names and addresses of the Lenders and the
Commitment of, and principal amount of the Loans owing to, each Lender
from time to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Administrative Agent and the Lenders may treat each Person
whose name is recorded in the Register as a Lender hereunder for all
purposes of this Credit Agreement. The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time and from
time to time upon reasonable prior notice.
(d) Acceptance. Upon its receipt of an Assignment Agreement
executed by the parties thereto, together with any Note subject to such
assignment and payment of the processing fee, the Administrative Agent
shall, if such Assignment Agreement has been completed and is in
substantially the form of Exhibit 11.3, (i) accept such Assignment
Agreement, (ii) record the information contained therein in the Register
and (iii) give prompt notice thereof to the parties thereto.
(e) Participations. Each Lender may sell participations to one or
more Persons in all or a portion of its rights, obligations or rights
and obligations under this Credit Agreement (including all or a portion
of its Commitment and its Loans); provided, however, that (i) such
Lender's obligations under this Credit Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) the participant
shall be entitled to the benefit of the right of set-off contained in
Section 11.2, (iv) the Borrower shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Credit Agreement, and (v) such Lender shall
retain the sole right to enforce the obligations of the Borrower
relating to its Loans and its Notes and to approve any amendment,
modification, or waiver of any provision of this Credit Agreement (other
than amendments, modifications, or waivers decreasing the amount of
principal of or the rate at which interest is payable on such Loans or
Notes, extending any scheduled
83
89
principal payment date or date fixed for the payment of interest on such
Loans or Notes, increasing its Commitment (other than any such increase
pursuant to Section 2.1(h)) or releasing the Borrower or all or
substantially all of the Guarantors from their respective obligations
under the Credit Documents).
(f) Nonrestricted Assignments. Notwithstanding any other provision
set forth in this Credit Agreement, any Lender may at any time assign
and pledge all or any portion of its Loans and its Notes to any Federal
Reserve Bank as collateral security pursuant to Regulation A and any
Operating Circular issued by such Federal Reserve Bank. No such
assignment shall release the assigning Lender from its obligations
hereunder.
(g) Information. Any Lender may furnish any information concerning
the Borrower or any of its Subsidiaries in the possession of such Lender
from time to time to assignees and participants (including prospective
assignees and participants), subject, however, to the provisions of
Section 11.16.
11.4 NO WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of the Administrative Agent or any
Lender in exercising any right, power or privilege hereunder or under any other
Credit Document and no course of dealing between the Credit Parties and the
Administrative Agent or any Lender shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, power or privilege hereunder or
under any other Credit Document preclude any other or further exercise thereof
or the exercise of any other right, power or privilege hereunder or thereunder.
The rights and remedies provided herein are cumulative and not exclusive of any
rights or remedies which the Administrative Agent or any Lender would otherwise
have. No notice to or demand on any Credit Party in any case shall entitle any
Credit Party to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Administrative Agent
or the Lenders to any other or further action in any circumstances without
notice or demand.
11.5 PAYMENT OF EXPENSES; INDEMNIFICATION.
The Credit Parties agree to: (a) pay all reasonable out-of-pocket costs
and expenses of (i) the Agent Related Persons in connection with (A) the
negotiation, preparation, execution and delivery, syndication and administration
of this Credit Agreement and the other Credit Documents and the documents and
instruments referred to therein (including, without limitation, the reasonable
fees and expenses of ▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇, special counsel to the Administrative
Agent) and (B) any amendment, waiver or consent relating hereto and thereto
including, but not limited to, any such amendments, waivers or consents
resulting from or related to any work-out, renegotiation or restructure relating
to the performance by the Credit Parties under this Credit Agreement, and (ii)
the Agent Related Persons and the Lenders in connection with (A) enforcement of
the Credit Documents and the documents and instruments referred to therein,
including, without limitation, in connection with any such enforcement, the
reasonable Attorneys' Costs of the Administrative Agent and each of the Lenders
and (B) any bankruptcy or insolvency proceeding of any member of the
Consolidated Group, and (b) indemnify the Agent Related Persons and each Lender,
its officers,
84
90
directors, employees, representatives, counsel and agents from and hold each of
them harmless against any and all losses, liabilities, claims, damages or
expenses incurred by any of them as a result of, or arising out of, or in any
way related to, or by reason of, any investigation, litigation or other
proceeding (whether or not such Agent Related Person or any Lender is a party
thereto) related to (x) the entering into and/or performance of any Credit
Document or the use of proceeds of any Loans (including other extensions of
credit) hereunder or the consummation of any other transactions contemplated in
any Credit Document, including, without limitation, reasonable Attorneys' Costs
incurred in connection with any such investigation, litigation or other
proceeding (but excluding any such losses, liabilities, claims, damages or
expenses to the extent incurred by reason of gross negligence or willful
misconduct on the part of the Person to be indemnified), (y) any Environmental
Claim and (z) any claims for Taxes (all of the foregoing, collectively,
"Indemnified Liabilities").
11.6 AMENDMENTS, WAIVERS AND CONSENTS.
Neither this Credit Agreement nor any other Credit Document nor any of
the terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing and signed by the Required Lenders; provided that no such amendment,
change, waiver, discharge or termination shall, without the consent of each
Lender affected thereby:
(a) extend the final maturity of any Loan or any portion thereof or
postpone any other date fixed for any payment of principal;
(b) reduce the rate or extend the time of payment of interest
(other than as a result of waiving the applicability of any post-default
increase in interest rates) or fees hereunder;
(c) reduce or waive the principal amount of any Loan;
(d) increase the Commitment of a Lender over the amount thereof in
effect (it being understood and agreed that a waiver of any Default or
Event of Default or a waiver of any mandatory reduction in the
Commitments shall not constitute a change in the terms of any Commitment
of any Lender);
(e) consent to the transfer by the Borrower of or release the
Borrower from its obligations, or consent to the transfer by any
Guarantor of or release all or substantially all of the Guarantors from
its or their obligations, under the Credit Documents;
(f) amend, modify or waive any provision of this Section 11.6 or
Section 3.4, 3.7, 3.8, 5.2, 9.1(a), 11.2, 11.3 or 11.5 or amend or
modify the definition of Borrowing Base, Borrowing Base Property,
Development Property or Income Property; or
(g) reduce any percentage specified in, or otherwise modify, the
definition of Required Lenders.
85
91
No provision of Section 2.2 or Section 10.1(b) may be amended or modified
without the consent of the Issuing Lender. No provision of Section 10 may be
amended or modified without the consent of the Administrative Agent.
It is understood and agreed that each Lender shall be given no less than five
Business Days written notice of any request for an amendment, waiver or consent
under this Credit Agreement or any of the other Credit Documents.
Notwithstanding the fact that the consent of all the Lenders is required in
certain circumstances as set forth above, (x) each Lender is entitled to vote as
such Lender sees fit on any reorganization plan that affects the Loans or the
Letters of Credit, and each Lender acknowledges that the provisions of Section
1126(c) of the Bankruptcy Code supersede the unanimous consent provisions set
forth herein and (y) the Required Lenders may consent to allow a Credit Party to
use cash collateral in the context of a bankruptcy or insolvency proceeding.
11.7 COUNTERPARTS/TELECOPY.
This Credit Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall constitute one and the same instrument. Delivery of executed
counterparts by telecopy shall be as effective as an original and shall
constitute a representation that an original will be delivered.
11.8 HEADINGS.
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.
11.9 DEFAULTING LENDER.
Each Lender understands and agrees that if such Lender is a Defaulting
Lender then notwithstanding the provisions of Section 11.6 it shall not be
entitled to vote on any matter requiring the consent of the Required Lenders or
to object to any matter requiring the consent of all the Lenders; provided,
however, that all other benefits and obligations under the Credit Documents
shall apply to such Defaulting Lender.
11.10 SURVIVAL OF INDEMNIFICATION AND REPRESENTATIONS AND WARRANTIES.
All indemnities set forth herein and all representations and warranties
made herein shall survive the execution and delivery of this Credit Agreement,
the making of the Loans, the issuance of the Letters of Credit and the repayment
of the Loans and other Obligations and the termination of the Commitments
hereunder.
11.11 GOVERNING LAW.
(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES
86
92
HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.
11.12 WAIVER OF JURY TRIAL; WAIVER OF CONSEQUENTIAL DAMAGES.
EACH OF THE PARTIES TO THIS CREDIT AGREEMENT HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR
THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY. Each Credit Party agrees not
to assert any claim against the Administrative Agent, the Issuing Lender, any
Lender, any of their Affiliates, or any of their respective directors, officers,
employees, attorneys or agents, on any theory of liability, for special,
indirect, consequential or punitive damages arising out of or otherwise relating
to any of the transactions contemplated herein.
11.13 SEVERABILITY.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
11.14 ENTIRETY.
This Credit Agreement together with the other Credit Documents represent
the entire agreement of the parties hereto and thereto, and supersede all prior
agreements and understandings, oral or written, if any, including any commitment
letters or correspondence relating to the Credit Documents or the transactions
contemplated herein and therein.
11.15 BINDING EFFECT.
(a) This Credit Agreement shall become effective at such time as
all of the conditions set forth in Section 5.1 have been satisfied or
waived by the Lenders and it shall have been executed by the Credit
Parties and the Administrative Agent, and the Administrative Agent shall
have received copies hereof (by telecopy or otherwise) which, when taken
together, bear the signatures of each Lender, and thereafter this Credit
Agreement shall be binding upon and inure to the benefit of the Credit
Parties, the Administrative Agent and each Lender and their respective
successors and assigns. Upon this Credit Agreement becoming effective,
the Existing Credit Agreement shall be deemed terminated and the Credit
Parties and the lenders party to the Existing Credit Agreement shall no
longer have any obligations thereunder (other than those obligations in
the Existing Credit Agreement that expressly survive the termination of
the Existing Credit Agreement).
(b) This Credit Agreement shall be a continuing agreement and shall
remain in full force and effect until all Loans, LOC Obligations,
interest, fees and other
87
93
Obligations have been paid in full and all Commitments and Letters of
Credit have been terminated. Upon termination, the Credit Parties shall
have no further obligations (other than the indemnification provisions
that survive) under the Credit Documents; provided that should any
payment, in whole or in part, of the Obligations be rescinded or
otherwise required to be restored or returned by the Administrative
Agent or any Lender, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise, then the Credit Documents
shall automatically be reinstated and all amounts required to be
restored or returned and all costs and expenses incurred by the
Administrative Agent or Lender in connection therewith shall be deemed
included as part of the Obligations.
11.16 CONFIDENTIALITY.
Each of the Administrative Agent and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates' directors, officers, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential); (b) to the extent requested or required by any
Governmental Authority; (c) to the extent required by Requirements of Law or by
any subpoena or similar legal process; (d) to any other party to this Credit
Agreement; (e) in connection with the exercise of any remedies hereunder or any
suit, action or proceeding relating to this Agreement or the enforcement of
rights hereunder; (f) subject to an agreement containing provisions
substantially the same as those of this Section 11.16, to (i) any Eligible
Assignee of or participant in, or any prospective Eligible Assignee of or
participant in, any of its rights or obligations under this Credit Agreement or
(ii) any direct or indirect contractual counterparty or prospective counterparty
(or such contractual counterparty's or prospective counterparty's professional
advisor) to any credit derivative transaction relating to obligations of any
Credit Party; (g) with the consent of the applicable Person; (h) to the extent
such Information (i) becomes publicly available other than as a result of a
breach of this Section 11.16 or (ii) becomes available to the Administrative
Agent or any Lender on a nonconfidential basis from a source other than the
applicable Person; or (i) to the National Association of Insurance Commissioners
or any other similar organization or any nationally recognized rating agency
that requires access to information about a Lender's or its Affiliates'
investment portfolio in connection with ratings issued with respect to such
Lender or its Affiliates. For the purposes of this Section 11.16, "Information"
means all information received from a Credit Party or any Affiliate of a Credit
Party relating to such Person or its business, other than any such information
that is available to the Administrative Agent or any Lender on a nonconfidential
basis prior to disclosure by such Person; provided that, in the case of
information received from such Person after the date hereof, such information is
clearly identified in writing at the time of delivery as confidential. Any
Person required to maintain the confidentiality of Information as provided in
this Section 11.16 shall be considered to have complied with its obligation to
do so if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
88
94
11.17 FURTHER ASSURANCES.
The Credit Parties agree, upon the request of the Administrative Agent,
to promptly take such actions as are necessary to carry out the intent of this
Credit Agreement and the other Credit Documents, including, without limitation,
as is necessary, in the sole discretion of the Administrative Agent, to maintain
a perfected first priority security interest in and Lien upon the Collateral.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
89
95
Each of the parties hereto has caused a counterpart of this Credit
Agreement to be duly executed and delivered as of the date first above written.
BORROWER: PAN PACIFIC RETAIL PROPERTIES, INC.,
a Maryland corporation
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
96
GUARANTOR: PAN PACIFIC DEVELOPMENT (TENNESSEE), L.P.,
a Delaware limited partnership
By: Pan Pacific Development (Tennessee)
Acquisition, Inc., its general partner
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
97
GUARANTOR: PAN PACIFIC (MARINA VILLAGE), LLC,
a Nevada limited liability company
By: Pan Pacific Retail Properties, Inc.,
its sole member
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
98
GUARANTOR: PAN PACIFIC (CABLE PARK), LLC,
a Nevada limited liability company
By: Pan Pacific Retail Properties, Inc.,
its sole member
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
99
GUARANTOR: GW NO. 100, a California general partnership
By: Pan Pacific Retail Properties, Inc.,
its general partner
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
100
Signature Page to Revolving Credit Agreement
for Pan Pacific Retail Properties, Inc.
LENDERS:
BANK OF AMERICA, N.A., acting in its
capacity as Administrative Agent and
individually as a Lender
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
101
Signature Page to Revolving Credit Agreement
for Pan Pacific Retail Properties, Inc.
DRESDNER BANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
102
Signature Page to Revolving Credit Agreement
for Pan Pacific Retail Properties, Inc.
FIRST UNION NATIONAL BANK
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
103
Signature Page to Revolving Credit Agreement
for Pan Pacific Retail Properties, Inc.
GUARANTY FEDERAL BANK, F.S.B.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
104
Signature Page to Revolving Credit Agreement
for Pan Pacific Retail Properties, Inc.
KEYBANK NATIONAL ASSOCIATION
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
105
Signature Page to Revolving Credit Agreement
for Pan Pacific Retail Properties, Inc.
SANWA BANK CALIFORNIA
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
106
Signature Page to Revolving Credit Agreement
for Pan Pacific Retail Properties, Inc.
U.S. BANK NATIONAL ASSOCIATION
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
107
Signature Page to Revolving Credit Agreement
for Pan Pacific Retail Properties, Inc.
▇▇▇▇▇ FARGO BANK, N.A.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
