EXHIBIT B
SECTION 5
AFFIRMATIVE COVENANTS OF THE COMPANY
The Company hereby covenants and agrees that so long as this Agreement
is in effect and until the Debentures, together with interest, fees and other
obligations hereunder, have been paid in full:
5.01. INFORMATION COVENANTS. The Company will furnish, or cause to
be furnished, to each Holder:
(a) ANNUAL FINANCIAL STATEMENTS. As soon as available and in any
event within 90 days after the close of each fiscal year of the Company, a
balance sheet of the Company as at the end of such fiscal year together with
related statements of income and retained earnings and of cash flows for such
fiscal year, all in reasonable detail and examined by independent certified
public accountants of recognized national standing whose opinion shall be to the
effect that such financial statements have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis (except
for changes with which such accountants concur) and shall not be qualified as to
the scope of the audit, all of the foregoing to be in reasonable detail and in
form and substance satisfactory to the Holder.
(b) AUDITOR'S CERTIFICATE. At the time of delivery of the financial
statements provided for in Section 5.01(a) hereof, a certificate from the
accountants examining such financial statements, that, to the best of their
knowledge, no Event of Default exists, or, if any Event of Default does exist,
providing a reasonably detailed summary of all relevant information known to
such accountants.
(c) QUARTERLY FINANCIAL STATEMENTS. As soon as available and in any
event within 45 days after the end of each fiscal quarter of each fiscal year of
the Company, (i) except for the fourth fiscal quarter of each fiscal year, a
balance sheet of the Company as at the end of such quarterly period together
with related statements of income and retained earnings for such quarterly
period and for the portion of the fiscal year ending with such period, all in
reasonable detail and in form and substance satisfactory to Required Holders,
and accompanied by a certificate of the President of the Company as being true
and correct and as having been prepared in accordance with generally accepted
accounting principles applied on a consistent basis, subject to changes
resulting from audit and normal year-end audit adjustments, (ii) a report
showing the calculation of Net
Cash Flow* for such fiscal quarter and (iii) estimates made in good faith by
the Company of the items specified in (ii) above relating to the next fiscal
quarter. For so long as the Company is required to file reports pursuant to the
Securities Exchange Act of 1934, the Company may satisfy its obligations under
Section 5.01(a) and 5.01(c)(i) hereof by delivery to Whitehall, within the time
periods specified in such Sections, of copies of its reports on Form 10-K and
Form 10-Q, respectively, with the Securities and Exchange Commission.
(d) OFFICER'S CERTIFICATE. At the time of delivery the financial
statements provided for in Section 5.01(c) hereof, a certificate of the
President of the Company substantially in the form of Exhibit B to the effect
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
Company proposes to take with respect thereto.
(e) AUDITOR'S REPORTS. Promptly upon receipt thereof, a copy of any
other report or management letter submitted by independent accountants to the
Company in connection with any annual, interim or special audit of the books of
Company.
(f) MORTGAGE INFORMATION. For so long as the Mortgage is
outstanding, copies of all financial information, reports and other documents
received by the Company pursuant to the 1985 Loan Agreement and the Mortgage
promptly upon receipt thereof.
(g) REAL ESTATE INFORMATION. As soon as available and in any event
within 60 days after the end of each fiscal quarter of each fiscal year of the
Company during any part of which the Company is the owner of the Real Estate, a
rent roll for the Real Estate, dated as of the last date of such fiscal quarter,
listing (i) each tenant at the Real Estate, (ii) the net rentable square feet
leased by each such tenant, (iii) the annual rent currently payable by each such
tenant and (iv) the expiration date of each such tenant's lease, and accompanied
by a certificate of the President of the Company as being true and correct and
providing the name of any tenant at the Real Estate which, to the best of the
Company's knowledge, was in default under its lease.
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* Note: this definition will still apply because of the "pay-in-kind"
feature of the 14% Debentures.
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(h) OTHER INFORMATION. With reasonable promptness upon request, such
other information regarding the business, properties or financial condition of
the Company and regarding the Real Estate as any Holder may reasonably request,
subject to compliance with any applicable confidentiality restrictions agreed to
in good faith.
(i) NOTICE OF DEFAULT OR LITIGATION. Upon the Company obtaining
knowledge thereof, it will give written notice to each Holder promptly, but in
any event within five Business Days, of the occurrence of any of the following
with respect to the Company or the Real Estate: (i) the occurrence of an event
or condition consisting of a Default, specifying the nature and existence
thereof and what action the Company proposes to take with respect thereto,
(ii) the pendency or commencement of any litigation, arbitral or governmental
proceeding against the Company in which damages are sought or environmental
remediation demanded which exceeds $1,000,000 in any instance or $5,000,000 in
the aggregate or which might otherwise materially adversely affect the business,
properties, assets, condition (financial or otherwise) or prospects of the
Company or which might materially adversely affect the Real Estate, (iii) any
levy of an attachment, execution or other process against its assets in excess
of $1,000,000, (iv) the occurrence of an event or condition which shall
constitute a default or event of default under any other agreement for borrowed
money in excess of $1,000,000, (v) any development in its business or affairs
which has resulted in, or which the Company reasonably believes may result in, a
material adverse effect on the business, properties, assets, condition
(financial or otherwise) or prospects of the Company or which might materially
adversely affect the Real Estate, (vi) the institution of any proceedings
against, or the receipt of notice of potential liability or responsibility for
any violation, or alleged violation of, any federal, state or local law, rule or
regulation, the violation of which could give rise to a material liability, or
have a material adverse effect on, the business, assets, properties condition
(financial or otherwise) or prospects of the Company or which would materially
adversely affect the Real Estate, or (vii) the occurrence of an event or
condition which may render the Company unable to qualify as a REIT under the
Code.
(j) CHANGES TO INDEBTEDNESS. Within 30 days prior thereto, notice of
any proposed refinancing or modification of Indebtedness made pursuant to
Section 6.01(i) or Section 6.07.
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5.02. PRESERVATION OF EXISTENCE AND FRANCHISES. The Company will do
or cause to be done all things necessary to preserve and keep in full force and
effect its existence, rights, franchises and authority and will at all times
take all reasonable steps necessary to qualify to be taxed as a REIT as long as
a REIT is accorded substantially the same treatment under the United States
income tax laws from time to time in effect as under Sections 856-860 of the
Code, in effect at the date of this Agreement, as originally executed.
5.03. BOOKS, RECORDS AND INSPECTIONS. The Company will keep complete
and accurate books and records of its transactions in accordance with good
accounting practices on the basis of generally accepted accounting principles
applied on a consistent basis (including the establishment and maintenance of
appropriate reserves). The Company will permit, on reasonable notice, any
Holder to visit and inspect its books of account and records and any of its
properties or assets and to discuss the affairs, finances and accounts of the
Company with, and be advised as to the same by, its officers, directors and
independent accountants.
5.04. COMPLIANCE WITH LAW. The Company will comply in all material
respects with all applicable laws, rules, regulations and orders of, and all
applicable restrictions imposed by, all applicable governmental bodies, foreign
or domestic, or authorities and agencies thereof (including quasi-governmental
authorities and agencies), in respect of the conduct of its business and the
ownership of its property.
5.05. INSURANCE. Except as specified in Schedule 5.05, the Company
will at all times maintain in full force and effect insurance (including
worker's compensation insurance, liability insurance, property and casualty
insurance and business interruption insurance) in such amounts, covering such
risks and liabilities, with such deductibles or self-insurance retentions and
with such carriers as is in accordance with normal industry practice, and with
respect to property and casualty insurance covering the Real Estate, as is
reasonably acceptable to the Holders.
5.06. MAINTENANCE OF PROPERTY. The Company will maintain and
preserve its properties and assets in good repair, working order and condition,
normal wear and tear excepted, and will make, or cause to be made, in such
properties and assets from time to time all repairs, renewals, replacements,
extensions, additions, betterments and improvements thereto as may be needed or
proper, to the
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extent and in the manner customary for companies in similar businesses.
5.07. PLAN ASSETS. The Company will use its best efforts to not take
any action that would cause it to be deemed to hold Plan Assets at any time.
5.08. INTERCREDITOR AGREEMENT. The Company will comply with the
terms of one or more Intercreditor Agreements substantially in the form attached
as Attachment I hereto in respect of payments to be made in respect of the
Debentures and the Notes (as defined therein) notwithstanding that such terms
may alter the provisions set forth herein, in the Debentures, in the Loan
Agreement (as defined therein) or in the Notes (as defined therein). Each
Holder agrees by accepting a Debenture to be bound by the terms and provisions
of the Intercreditor Agreement as if such Holder were a party thereto.
5.09. RESALE OF DEBENTURES. The Company, upon the request of the
Required Holders from time to time, will exchange the Debentures for any other
evidences of indebtedness or debt securities, whether notes, debentures or
otherwise (the "New Debt"), and shall enter into any such agreements, whether in
the form of an amendment hereto, an indenture, a debenture purchase agreement or
otherwise (the "New Documents"), as shall be deemed necessary or desirable by
the Required Holders in connection with the resale of the Debentures, whether as
a private placement, a registered public offering or otherwise, provided only
that the aggregate principal amount of the New Debt shall be equal to the unpaid
principal amount of the Debentures at the time of exchange and the business
terms (including aggregate interest) of the New Documents shall be the same in
all material respects as the business terms (including affirmative and negative
covenants) contained herein. Notwithstanding the foregoing, it is understood by
the parties that (a) the New Debt shall be in such denominations and tranches
and have such other features (including, without limitation, intercreditor
and/or priority arrangements) as may be deemed appropriate by the Required
Holders, (b) the New Documents will contain additional terms and provisions
governing the voting rights of the holders of the New Debt to the extent desired
by the Required Holders, any provision relating to payment of interest,
repayment of principal or payment of any fees or indemnities and any other
provisions customarily so treated, (c) the New Documents will contain such
additional terms and provisions as are customarily contained in such documents
governing the issuance of debt including provisions governing the rights of
indenture trustees and/or administrative agents and bank
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set-off and sharing provisions, as applicable, (d) the New Documents will
contain such other additional terms and provisions as are reasonably requested
by the Required Holders in order to effectuate the resale of the Debentures and
such other additions hereto or variations herefrom as are requested by any
rating agency rating the New Debt, including, without limitation, requiring
accrual of payments that are due in escrow or trust accounts, except to the
extent otherwise prohibited by the 1985 Indenture and except that no such escrow
shall be required in respect of regularly scheduled payments on account of the
Debentures and (e) the New Documents will be in such form and will contain such
terms and provisions as are necessary to comply with all applicable securities
laws, including, in the case of an indenture, the Trust Indenture Act of 1939,
as amended. In furtherance of the foregoing, the Company will provide the
Required Holders with all such documents and information, financial or
otherwise, assist in all such due diligence and do such other things and enter
into such other agreements as are necessary or, in the judgment of the Required
Holders, desirable to resell the Debentures and carry out the intent of this
Section 5.09. The term "Holder" or "Required Holders" as used in this Agreement
shall include any trustee for an indenture pursuant to which the New Debt is
issued.
SECTION 6
NEGATIVE COVENANTS
The Company hereby covenants and agrees that so long as this Agreement
is in effect and until the Debentures, together with all interest, fees and
other obligations hereunder, have been paid in full:
6.01. INDEBTEDNESS. The Company will not contract, create, incur,
assume or permit to exist any Indebtedness, except:
(i) Indebtedness set forth on Schedule 6.01* and
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* Schedule 6.01 will set forth the 14% Debentures, the new debt of up to $375
million and the Zero Coupon Debentures currently outstanding (including
accreted amounts, but with an aggregate outstanding debt limit at any time
(including all accreted amounts but not including the Debentures) not to
exceed $780 million). Alternatively, the Company may elect to subordinate
the
(continued...)
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any modifications or refinancings thereof in conformity with Section 6.07.
(ii) Current liabilities for taxes and assessments incurred or
arising in the ordinary course of business;
(iii) Indebtedness in respect of current accounts payable or accrued
(other than for borrowed money or purchase money obligations) and incurred
in the ordinary course of business; PROVIDED, that all such liabilities,
accounts and claims shall be paid when due (or in conformity with customary
trade terms);
(iv) Unsecured Indebtedness in an aggregate amount not to exceed
$30,000,000 at any time outstanding incurred by the Company to cover
working capital needs;
(v) Indebtedness secured by assets acquired in compliance with
Section 6.03 to the extent of (a) 66% of the allocated purchase price of
such assets in the case of non-recourse Indebtedness and (b) 50% of the
allocated purchase price of such assets in the case of recourse
Indebtedness; and
(vi) Indebtedness in respect of issuances of Debentures pursuant to
Section 2.01(b),
provided, that in the case of Indebtedness set forth in clauses (iv) and (v)
above, all payments, fees and expenses in respect of such Indebtedness shall not
be deducted from the Net Cash Flow of the Company for purposes of this
Agreement.
6.02. LIENS. Except with respect to Permitted Liens and liens to
secure indebtedness permitted by Sections 6.01(i) and 6.01(v), the Company will
not (i) contract, create, incur, assume or permit to exist any Lien with respect
to any of its property or assets of any kind (whether real or personal, tangible
or intangible), whether now owned or hereafter acquired, (ii) sell any of its
property or assets subject to an understanding or agreement, contingent or
otherwise, to repurchase such property or
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* (...continued)
Debentures to up to $700 million of new debt in which case the provisions
of the last sentence of Paragraph 9(a) of the Letter Agreement will apply
and the total debt limit (not including the Debentures) of the Company will
be $700 million.
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assets (including sales of accounts receivable or notes with recourse to it) or
(iii) assign any right to receive income.
6.03. CONSOLIDATION, MERGER, SALE OR PURCHASE OF ASSETS. The Company
will not dissolve, liquidate, or wind up its affairs, and will not enter into
any transaction of merger or consolidation, or sell or otherwise dispose of all
or any material part of its property or assets or, other than in the ordinary
course of its business, purchase, lease or otherwise acquire (in a single
transaction or a series of related transactions) all or any part of the property
or assets of any Person, except that (i) the Company may merge or be
consolidated with any other U.S. corporation so long as (a) the Company shall be
the surviving corporation, (b) after giving effect to any such transaction, no
Default or Event of Default shall exist, and (c) the surviving corporation shall
have a number of authorized, issued and outstanding shares of capital stock no
greater than that of the Company immediately prior to such transaction and (ii)
the Company may purchase, lease or otherwise acquire (in a single transaction or
a series of related transactions) all or any part of the property or assets of
any Person and may resell or otherwise dispose of such property or assets so
long as after giving effect to any such transaction, no Default or Event of
Default shall exist, including, without limitation, any Default in respect of
Section 6.01.
Notwithstanding anything to the contrary contained in this Agreement,
the Company* may effect a credit lease financing with a lease from, or
guaranteed by, General Electric Company that would involve the release from the
Collateral Trust Agreement of property subject to such lease and the elimination
of the subordination of the Debentures to any other debt of the Company.
6.04. SALE AND LEASEBACK. The Company will not enter into any
arrangement pursuant to which it will lease back, as lessee, any property (real,
personal or mixed, tangible or intangible) previously owned by it and sold or
otherwise transferred or disposed of, directly or indirectly, to the
owner-lessor of such property, unless, such arrangement, if treated as a capital
lease, would not result in a Default of Section 6.01.
6.05. ERISA. The Company will not (i) file with any affected party
(as defined in Section 4001 of ERISA) any notice of intent to terminate any
Plan; (ii) adopt any
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* By action of its Board of Directors reconstituted in accordance with
Paragraph 9(f) of the Letter Agreement.
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amendment to any Plan if, after giving effect thereto, the Plan is a plan
described in Section 4021(b) of ERISA; (iii) incur, or permit any ERISA
Affiliate to incur, any liability under Sections 4062(e), 4063 or 4064 of ERISA
in respect of a Plan; (iv) adopt any amendment to a Plan that would require
security to be given to such Plan pursuant to Section 401(a)(29) of the Code or
Section 307 of ERISA; (v) fail, or permit any ERISA Affiliate to fail, to make a
payment to a Plan which would give rise to a lien in favor of such Plan under
Section 302(f) of ERISA or (vi) take, or omit to take, any action that is
reasonably likely to result in the institution of proceedings by the Pension
Benefit Guaranty Corporation to terminate a Plan pursuant to Section 4042 of
ERISA.
6.06. DIVIDENDS. The Company will not declare or pay any dividend
on, or make any payment on account of, or set apart assets for a sinking or
other analogous fund for, the purchase, redemption, defeasance, retirement or
other acquisition of, Common Stock in an amount in excess of $.80 per share per
annum, adjusted to reflect any stock splits, stock dividends or similar
transactions, unless and to the extent required to meet qualification rules for
a REIT requiring distributions of 95% (or such other percentage as may be
required by a change in the Code applicable to REITs) (such required
distributions are referred to herein as "REIT Distributions"). The Company will
not make any payment on account of a Warrant or Stock Appreciation Right in an
amount per share in excess of the positive difference between (x) any amounts
per share paid to holders of Common Stock pursuant to the preceding sentence and
(y) $.60 per annum, adjusted to reflect any stock splits, stock dividends or
similar transactions; PROVIDED, that this Section 6.06 shall not operate to
prevent the exercise of Warrants or conversion of Stock Appreciation Rights in
accordance with their respective terms or any payment on 14% Debentures issued
on conversion of Stock Appreciation Rights.
6.07. MODIFICATION OR PREPAYMENT OF INDEBTEDNESS. The Company will
not modify or refinance any Indebtedness set forth on Schedule 6.01 if quarterly
debt service of the Company would be materially increased or Net Cash Flow of
the Company would be materially decreased as a result thereof. The Company will
not modify or refinance any Indebtedness which is senior to the 14% Debentures
if the amounts due on such Indebtedness would be increased. For such time as
the Holders and the holders of the zero coupon Indenture Securities (the "Zero
Coupon Debentures") shall be jointly secured by a Lien on the Real Estate, and
other than pursuant to the last sentence of Paragraph 9(a) of the Letter
Agreement of November __, 1994, the Company will not
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prepay, refinance or modify the Zero Coupon Debentures if the amounts due on the
Zero Coupon Debentures or on any such replacement debt (including any accretion
to the date of such prepayment, refinancing or modification and any future
scheduled accretions under the Zero Coupon Debentures) would be increased or
amortized or their maturity would be accelerated to an earlier date as a result
thereof.
6.08. USURY. The Company covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of, any usury, stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Debenture Purchase Agreement;
and the Company (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law and covenants that it will not
hinder, delay or impede the execution of any power herein granted to any Holder,
but will suffer and permit the execution of every such power as though no such
law had been enacted.
SECTION 8
REDEMPTION
8.01. REDEMPTION.
(a) VOLUNTARY REDEMPTION. The Company shall have the right to redeem
the Debentures at any time on or after December 30, 2000 in whole or in part
upon 30 days advance written notice in accordance with Section 8.01(c) to each
Holder which notice shall specify the date on which the Company will effect such
redemption (a "Redemption Date"). Debentures redeemed from December 30, 2000
through December 31, 2001, inclusive, shall be redeemed at 105% of the principal
amount of Debentures redeemed; debentures redeemed from January 1, 2002 through
December 31, 2002, inclusive, shall be redeemed at 103% of the principal amount
of Debentures redeemed; debentures redeemed from January 1, 2003 through
December 31, 2003, inclusive, shall be redeemed at 101.5% of the principal
amount of Debentures redeemed; and Debentures redeemed thereafter shall be
redeemed at 100% of the principal amount of Debentures redeemed, in each case
with interest accrued to the date of redemption.
(b) PARTIAL REDEMPTION. (i) If less than all of the then outstanding
Debentures are to be redeemed on any date on which the Company will effect a
redemption of the outstanding Debentures (a "Redemption Date"), the Company
shall (x) include in the notice provided to the Holders
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pursuant to Section 8.01(c) the principal amount of Debentures then outstanding
and the principal amount of Debentures to be redeemed and (y) effect such
redemption (to the extent practicable within $1,000 increments) on a PRO RATA
basis.
(ii) Any Debenture which is to be redeemed only in part shall be
surrendered at the place specified in the notice delivered to Holders pursuant
to Section 8.01(c) (with due endorsement by, or a written instrument of transfer
in form satisfactory to the Company duly executed by, the Holder thereof or his
attorney duly authorized in writing), and the Company shall execute and deliver
to the Holder of such Debenture without service charge, a new Debenture or
Debentures of any authorized denomination as requested by such Holder, in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Debenture so surrendered.
(c) NOTICE OF REDEMPTION. Notice of redemption shall be given by
first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days
prior to the Redemption Date, to each Holder, at his address appearing in the
Security Register (as defined below).
All notices of redemption shall state:
(i) the Redemption Date,
(ii) the Redemption Price,
(iii) that on the Redemption Date the Redemption Price will become
due and payable upon each Debenture and that interest thereon will cease to
accrue on and after said date, and
(iv) that the place or places where each Debenture is to be
surrendered for payment of Redemption Price.
Notice of redemption of Debentures to be redeemed at the election of
the Company shall be given by the Company and at the expense of the Company and
shall be irrevocable.
(d) INTEREST AFTER REDEMPTION DATE. On any Redemption Date in which
the then outstanding Debentures are to be redeemed in whole, the then
outstanding Debentures shall become due and payable at the Redemption Price, and
from and after such date (unless the Company shall default in the payment of the
Redemption Price and accrued interest) such Debentures shall cease to bear
interest. Upon surrender of any such Debenture for redemption in accordance
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with the notice specified in Section 8.01(c), such Debenture shall be paid by
the Company at the Redemption Price, together with accrued interest to the
Redemption Date. If any Debenture called for redemption shall not be so paid
upon surrender thereof for redemption, the principal shall, until paid, bear
interest from the Redemption Date at the rate plus such additional rate
prescribed in Section 2.03.
