1
EXHIBIT (b)(1)
CREDIT AGREEMENT
among
AMERICAN INDUSTRIAL PROPERTIES REIT
as Borrower
BANK ONE, TEXAS, N.A.
as Agent
and
THE LENDERS NAMED HEREIN
as Lenders
First Chicago Capital Markets, Inc.,
Arranger
$150,000,000
As of
January _____, 1999
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TABLE OF CONTENTS
Page
SECTION 1 DEFINITIONS AND TERMS...................................................................................1
1.1 Definitions.....................................................................................1
1.2 Time References................................................................................19
1.3 Other References...............................................................................19
1.4 Accounting Principles..........................................................................20
SECTION 2 COMMITMENT.............................................................................................20
2.1 Revolving Facility.............................................................................20
2.2 Borrowing Procedure............................................................................21
2.3 Letters of Credit..............................................................................22
SECTION 3 TERMS OF PAYMENT.......................................................................................25
3.1 Notes and Payments.............................................................................25
3.2 Interest and Principal Payments................................................................25
3.3 Interest Options...............................................................................26
3.4 Quotation of Rates.............................................................................26
3.5 Default Rate...................................................................................26
3.6 Interest Recapture.............................................................................27
3.7 Interest Calculations..........................................................................27
3.8 Maximum Rate...................................................................................27
3.9 Interest Periods...............................................................................28
3.10 Continuations; Conversions.....................................................................28
3.11 Order of Application...........................................................................29
3.12 Right of Setoff; Adjustments...................................................................29
3.13 Booking Borrowings.............................................................................30
3.14 Increased Costs and Reduced Return.............................................................30
3.15 Limitation on Types of Borrowings..............................................................32
3.16 Illegality.....................................................................................32
3.17 Treatment of Affected Loans....................................................................33
3.18 Compensation...................................................................................33
3.19 Taxes..........................................................................................34
3.20 Fees...........................................................................................36
3.21 Loan Documents.................................................................................37
SECTION 4 BORROWING BASE.........................................................................................38
4.1 Calculation of Borrowing Base..................................................................38
4.2 Admission of Qualified Properties into the Borrowing Base......................................38
4.3 Liens on Borrowing Base Properties.............................................................42
4.4 Collateral Documents...........................................................................42
4.5 Leases.........................................................................................42
4.6 Releases of Collateral.........................................................................44
4.7 Appraisals.....................................................................................44
SECTION 5 CONDITIONS PRECEDENT...................................................................................44
5.1 Conditions to Initial Borrowing................................................................44
5.2 Conditions to all Borrowings...................................................................47
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5.3 Conditions Generally...........................................................................48
SECTION 6 REPRESENTATIONS AND WARRANTIES.........................................................................48
6.1 Purpose of Credit Facility.....................................................................48
6.2 Existence, Good Standing, Authority and Compliance.............................................48
6.3 Affiliates.....................................................................................48
6.4 Authorization and Contravention................................................................49
6.5 Binding Effect.................................................................................49
6.6 Financial Statements; Fiscal Year..............................................................49
6.7 Litigation.....................................................................................49
6.8 Taxes..........................................................................................49
6.9 Environmental Matters..........................................................................50
6.10 Employee Plans.................................................................................50
6.11 Properties; Liens..............................................................................50
6.12 Locations......................................................................................51
6.13 Government Regulations.........................................................................51
6.14 Transactions with Affiliates...................................................................51
6.15 Insurance......................................................................................51
6.16 Labor Matters..................................................................................51
6.17 Solvency.......................................................................................51
6.18 Full Disclosure................................................................................51
6.19 Exemption from ERISA; Plan Assets..............................................................52
6.20 Year 2000 Compliance...........................................................................52
6.21 DDR Indebtedness...............................................................................53
6.22 Ownership and Indebtedness.....................................................................53
6.23 Ownership of Consolidated Affiliates...........................................................53
6.24 DDR Equity.....................................................................................53
SECTION 7 AFFIRMATIVE COVENANTS..................................................................................53
7.1 Items to be Furnished..........................................................................53
7.2 Use of Proceeds................................................................................55
7.3 Books and Records..............................................................................55
7.4 Inspections....................................................................................55
7.5 Taxes..........................................................................................55
7.6 Payment of Obligations.........................................................................56
7.7 Expenses.......................................................................................56
7.8 Maintenance of Existence, Assets, and Business.................................................56
7.9 Insurance......................................................................................57
7.10 Preservation and Protection of Rights..........................................................57
7.11 Environmental Laws.............................................................................57
7.12 INDEMNIFICATION................................................................................57
7.13 REIT Status....................................................................................59
7.14 ERISA Exemptions...............................................................................59
7.15 Listed Company.................................................................................59
7.16 Properties.....................................................................................59
7.17 Quarterly Distributions........................................................................59
7.18 Year 2000 Compliance...........................................................................59
7.19 Repayment of Certain Unsecured Note............................................................60
7.20 Subordination of Indebtedness..................................................................60
7.21 Subsidiary Guaranty............................................................................60
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7.22 Ownership of Consolidated Affiliates...........................................................60
SECTION 8 NEGATIVE COVENANTS.....................................................................................61
8.1 Payment of Obligations.........................................................................61
8.2 Employee Plans.................................................................................61
8.3 Transactions with Affiliates...................................................................61
8.4 Compliance with Governmental Requirements and Documents........................................61
8.5 Loans, Advances, and Investments...............................................................61
8.6 Dividends and Distributions....................................................................62
8.7 Sale of Assets.................................................................................62
8.8 Mergers and Dissolutions.......................................................................62
8.9 Assignment.....................................................................................62
8.10 Fiscal Year and Accounting Methods.............................................................62
8.11 New Businesses.................................................................................62
8.12 Government Regulations.........................................................................62
8.13 Interest Rate Agreements.......................................................................63
8.14 Indebtedness...................................................................................63
8.15 Book Value.....................................................................................63
8.16 Pledge.........................................................................................63
SECTION 9 FINANCIAL COVENANTS....................................................................................64
9.1 Total Indebtedness to Total Consolidated Value Ratio...........................................64
9.2 Debt Service Ratio.............................................................................64
9.3 Interest Coverage Ratio........................................................................64
9.4 Minimum Tangible Net Worth.....................................................................64
SECTION 10 DEFAULT...............................................................................................64
10.1 Events of Default..............................................................................64
(a) Payment of Obligation.................................................................64
(b) Covenants.............................................................................64
(c) Debtor Relief.........................................................................65
(d) Judgments and Attachments.............................................................65
(e) Government Action.....................................................................65
(f) Misrepresentation.....................................................................66
(g) Default Under Other Agreements........................................................66
(h) Validity and Enforceability of Loan Documents.........................................66
(i) Management Changes....................................................................66
(j) Change in Control.....................................................................66
(k) Plan Assets...........................................................................66
(l) Transfer of Borrowing Base Property...................................................66
(m) Grant of Easement, Etc................................................................67
(n) Abandonment...........................................................................67
(o) Default Under Other Lien..............................................................67
(p) Destruction...........................................................................67
(q) Condemnation..........................................................................67
(r) Liquidation, Etc......................................................................68
10.2 Notice and Cure................................................................................68
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SECTION 11 RIGHTS AND REMEDIES...................................................................................68
11.1 Remedies Upon Default..........................................................................68
11.2 Waivers. .....................................................................................69
11.3 Performance by Agent...........................................................................69
11.4 Not in Control.................................................................................69
11.5 Course of Dealing..............................................................................69
11.6 Cumulative Rights..............................................................................69
11.7 Application of Proceeds........................................................................70
11.8 Certain Proceedings............................................................................70
SECTION 12 AGENT AND LENDERS.....................................................................................70
12.1 Agent..........................................................................................70
12.2 Expenses.......................................................................................72
12.3 Proportionate Absorption of Losses.............................................................73
12.4 Delegation of Duties; Reliance.................................................................73
12.5 Limitation of Agent's Liability................................................................74
12.6 Default........................................................................................75
12.7 Limitation of Liability........................................................................75
12.8 Relationship of Lenders........................................................................75
12.9 Benefits of Agreement..........................................................................75
12.10 Approval of Lenders............................................................................75
12.11 Collateral Matters.............................................................................76
SECTION 13 MISCELLANEOUS.........................................................................................78
13.1 Headings.......................................................................................78
13.2 Nonbusiness Days; Time.........................................................................78
13.3 Communications.................................................................................78
13.4 Form and Number of Documents...................................................................78
13.5 Survival.......................................................................................78
13.6 Governing Law..................................................................................79
13.7 Invalid Provisions.............................................................................79
13.8 Venue; Service of Process; Jury Trial..........................................................79
13.9 Amendments, Consents, Conflicts, and Waivers...................................................80
13.10 Multiple Counterparts..........................................................................81
13.11 Assignments and Participations.................................................................82
13.12 Discharge Only Upon Payment in Full; Reinstatement in Certain Circumstances....................84
13.13 Initial and Subsequent Lenders.................................................................84
13.14 Entirety.......................................................................................85
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SCHEDULES AND EXHIBITS
Schedule 1 Parties, Addresses, Commitments, and Wiring Information
Schedule 4.2(h) Initial Borrowing Base Properties
Schedule 4.2(i) Second Properties
Schedule 6.2 Jurisdictions of Incorporation, Chief Executive Office, and
Jurisdictions
Schedule 6.7 Litigation
Schedule 6.9 Environmental Matters
Schedule 6.14 Affiliates Transactions
Schedule 6.22 Consolidated Affiliates, Properties, Permitted Conduit Debt,
and Ownership Interests
Exhibit A Form of Borrowing Request
Exhibit B Form of Compliance Certificate
Exhibit C Form of LC Request
Exhibit D Form of Note
Exhibit E Form of Subsidiary Guaranty
Exhibit F-1 Form of General Counsel Opinion
Exhibit F-2 Form of Special Counsel Opinion
Exhibit G Form of Deed of Trust, Assignment, Security Agreement and
Financing Statement
Exhibit H Form of Assignment of Leases and Rents
Exhibit I Form of Assignment and Acceptance
Exhibit J Form of Subordination, Non-Disturbance and Attornment
Agreement
Exhibit K Form of Borrowing Base Report
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT is dated as of January ____, 1999, among AMERICAN
INDUSTRIAL PROPERTIES REIT, a Texas real estate investment trust ("Borrower"),
each of the lenders that are a signatory hereto or that becomes a signatory
hereto as provided in Section 13.11(a) (individually, together with its
successors and permitted assigns, a "Lender" and collectively, the "Lenders"),
BANK ONE TEXAS, N.A., a national banking association, as Agent (in such
capacity, together with its successors and permitted assigns, "Agent"), and
certain Lenders, as Issuing Banks (individually, in such capacity, together with
its successors and permitted assigns, "Issuing Bank" and collectively, the
"Issuing Banks").
RECITALS:
1. Borrower has requested that Lenders extend to Borrower a revolving
credit facility not to exceed the principal amount of $150,000,000.
2. Lenders are willing to extend the requested credit on the terms and
subject to the conditions of this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1
DEFINITIONS AND TERMS
1.1 Definitions. Unless otherwise indicated, as used in the Loan
Documents:
"Adjusted Eurodollar Rate" means, for any Eurodollar Borrowing for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) determined by Agent to be equal to the quotient
obtained by dividing (a) the Eurodollar Rate for such Eurodollar Borrowing for
such Interest Period by (b) one (1) minus the Reserve Requirement for such
Eurodollar Borrowing for such Interest Period.
"Adjusted NOI" means, for any Property as of any determination date the
product of (i) (a) any cash rentals, proceeds, expense reimbursements or income
received from such Property (but excluding security or other deposits, late
fees, early lease termination or other penalties, and other charges deemed by
Agent to be of a non-recurring nature), based upon existing leases where tenants
are in occupancy of their respective space on the determination date, which are
paying rent in accordance with the terms of such leases, and which are not in
material default, less (b) all cash costs and expenses that
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the owner of the Property incurred as a result of, or in connection with, the
development, operation or leasing of such Property (but excluding principal and
interest payments during such period, tenant improvements costs, and commission
expenses), less (c) to the extent exceeding the amounts for the applicable costs
and expenses incurred by the owner of the Property pursuant to Clause (b) above,
appropriate accruals for items such as taxes, insurance, or other expenses
reasonably determined by the Agent, a management fee of at least five percent
(5%) of rents and a reserve of at least $0.50 per square foot per year, in each
case for the most recent fiscal quarter ending on or before the date of
determination and, (ii) four (4), all as determined in accordance with
accounting principles acceptable to Agent, consistently applied.
"Affiliate" of a Person means any other individual or entity who
directly or indirectly controls, or is controlled by, or is under common control
with, that Person. For purposes of this definition "control," "controlled by,"
and "under common control with" mean possession, directly or indirectly, of
power to direct (or cause the direction of) management or policies (whether
through ownership of voting Stock, by contract, or otherwise).
"Agent" is defined in the preamble.
"Agreement" means this Credit Agreement, as modified, amended,
supplemented, or restated from time to time.
"Applicable Lending Office" means, for each Lender and for each Type of
Borrowing, the "Lending Office" of such Lender (or of an Affiliate of such
Lender) designated for such Type of Borrowing on Schedule 1 or such other office
of such Lender (or an Affiliate of such Lender) as such Lender may from time to
time specify to Agent and Borrower by written notice in accordance with the
terms hereof as the office by which its Borrowings of such Type are to be made
and maintained.
"Applicable Margin" means, as of any date of determination, the
interest margin over the Base Rate or the Adjusted Eurodollar Rate, as the case
may be, based upon the Total Indebtedness to Total Consolidated Value Ratio, as
stated in the table below:
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Total Indebtedness to Total Applicable Margin Applicable Margin
Level Consolidated Value Ratio for Eurodollar Borrowings for Base Rate Borrowings
----- ------------------------ ------------------------- ------------------------
1 Equal to or greater than 60% 2.0% 1.0%
2 Less than 60% but greater 1.75% .75%
than or equal to 50%
3 Less than 50% but greater 1.50% .50%
than or equal to 40%
4 Less than 40% 1.40% .40%
The Applicable Margin determined above in effect at any time is based upon the
Total Indebtedness to Consolidated Value Ratio as determined from the Current
Financials and related Compliance Certificate then most-recently received by
Agent, effective for any new or Base Rate Borrowing on the third (3rd) Business
Day following receipt and for any existing Eurodollar Borrowings at the end of
the applicable Interest Period. If Borrower fails to timely furnish to Agent any
Financial Statements and related Compliance Certificate as required by this
Agreement, then the maximum Applicable Margin applies from the date those
Financial Statements and related Compliance Certificate are required to be
delivered and remain in effect until Borrower furnishes them to Agent. Agent
shall promptly notify each Credit Party and Borrower of any change in the
Applicable Margin, provided that the failure to provide such notice shall not
affect the effective date of any such change.
"Appraised Value" means, with respect to any Property, as of any date,
the appraised value of such Property pursuant to the most recent Required
Appraisal.
"Base Rate" means, for any day, the greater of (a) the sum of the
Federal Funds Rate plus one-half of one percent (0.5%), and (b) the annual
interest rate most recently announced by Agent as its prime rate (or, if the
Person then acting as Agent under this Agreement is not a bank organized under
the Governmental Requirements of the United States or any State, then the rate
announced by Bank One, Texas, N.A., or any successor thereof, as its prime rate)
in effect at its principal office, automatically fluctuating upward and downward
with and as specified in each announcement without special notice to Borrower or
any other Person (which prime rate may not necessarily represent the lowest or
best rate actually charged to a customer).
"Base Rate Borrowing" means a Borrowing bearing interest at the Base
Rate plus the Applicable Margin.
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"Borrowing" means (without duplication) any amount disbursed by (a)
Lenders to or on behalf of any Borrower under the Loan Documents, or (b) any
Lender in accordance with, and to satisfy the obligations of any Borrower under,
any Loan Document.
"Borrowing Base" is defined in Section 4.1(b).
"Borrowing Base Properties" means each of the Qualified Properties
owned by an Obligor and approved for inclusion in the Borrowing Base in
accordance with Section 4, and "Borrowing Base Property" means any one of the
Borrowing Base Properties.
"Borrowing Base Report" is defined in Section 7.1(c).
"Borrowing Date" means (a) for any Borrowing (i) the date for which
funds are requested by Borrower, or (ii) the date any Borrowing is Converted
hereunder to another Type of Borrowing, and (b) for any LC, the date in which an
LC is requested by Borrower.
"Borrowing Request" means a request substantially in the form of
Exhibit A and signed by a Responsible Officer of Borrower.
"Business Day" means (a) for all purposes, any day other than Saturday,
Sunday, and any other day that commercial banks are authorized by any
Governmental Requirement to be closed in Texas or New York, and (b) for purposes
of any Eurodollar Borrowing, a day that satisfies the requirements of Clause (a)
and is a day when commercial banks are open for domestic or international
business in London.
"Capital Lease" means, for any Person, any capital lease or sublease
that has been (or under GAAP should be) capitalized on a balance sheet of such
Person.
"Cash Equivalents" means (a) investments and direct obligations of the
United States of America or any agency thereof, or obligations fully guaranteed
by the United States of America or any agency thereof, provided that such
obligations mature within one (1) year of the date of acquisition thereof, (b)
commercial paper rated "A-1" or better according to S&P or "P-1" or better
according to ▇▇▇▇▇'▇ and maturing not more than one hundred and eighty (180)
days from the date of acquisition thereof, (c) time deposits with, and
certificates of deposit and bankers' acceptances issued by, any Agent or any
United States bank having capital surplus and undivided profits aggregating at
least $1,000,000,000, and (d) mutual funds whose investments are limited to the
foregoing.
"Change in Circumstances" is defined in SECTION 7.18.
"Change in Control" means the occurrence of any one of the following:
(a) any Person or group of related Persons shall have acquired beneficial
ownership of more than twenty percent (20%) of the
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outstanding Stock of Borrower (within the meaning of Section 13(d) or 14(d) of
the Securities Exchange Act of 1934, as amended, and the applicable rules and
regulations thereunder); or (b) during any period of twelve (12) consecutive
calendar months, individuals who were members of the Board of Directors of
Borrower on the first (1st) day of such period shall cease to constitute at
least eighty percent (80%) of the members of the Board of Directors of Borrower.
"Closing Date" means the date this Agreement is fully executed and
delivered.
"Code" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.
"Collateral" means the real and personal property comprising each
Borrowing Base Property securing payment of the Obligation pursuant to the
Collateral Documents.
"Collateral Documents" means the deeds of trust, mortgages, assignments
of rents and leases, security agreements, financing statements, subordination,
attornment and non-disturbance agreements from major tenants and from other
tenants as Agent may reasonably require, title insurance, opinions of counsel,
and other loan and collateral documents creating, evidencing and perfecting
Liens in the Collateral in favor of the Agent, for the benefit of the Lenders.
The Collateral Documents for each Borrowing Base Property shall include, without
limitation: (a) a Mortgage, (b) an Assignment of Leases and Rents substantially
in the form of Exhibit H, (c) Uniform Commercial Code Financing Statements in
forms acceptable for filing in the appropriate filing offices, (d) an opinion of
counsel of Borrower or the Obligor executing the Collateral Documents in
substantially the forms of Exhibit F-1 and Exhibit F-2, (e) the requisite
Subordination, Attornment and Non-Disturbance Agreements in substantially the
form of Exhibit J, and (f) a Borrowing Base Report and Compliance Certificate,
in each case modified to the extent necessary to meet the substantive
requirements of the laws of the state where the Borrowing Base Property is
located.
"Commitment" means, for a Lender, the amount (which is subject to
reduction and cancellation as provided in this Agreement) stated beside such
Lender's name on Schedule 1 as most recently amended under this Agreement, as
the same may be terminated pursuant to Section 11.1, and as the same may be
increased or decreased from time to time by further assignment pursuant to
Section 13.11 and as the same may be increased pursuant to Section 13.13.
"Commitment Usage" means, at any time, the sum of (a) the Total
Principal Debt plus (b) the LC Exposure.
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"Companies" means, without duplication, (a) Borrower; (b) each of
Borrower's Consolidated Affiliates, and (c) all Subsidiary Guarantors, and
"Company" means any one of the Companies.
"Compliance Certificate" means a certificate substantially in the form
of Exhibit B and signed by a Responsible Officer of Borrower.
"Consolidated Affiliate" means, in respect of any Person, any other
Person in whom such Person holds Stock and whose financial results would be
consolidated under GAAP with the financial results of such Person on the
consolidated financial statements of such Person.
"Constant Annual Percent" means the percent of a principal amount of a
loan required to be paid each year in order to amortize such loan at maturity as
well as to pay the amount of interest due at each installment, which
installments shall be equal monthly installments of principal and interest.
"Constituent Documents" means, with respect to any Person, its articles
or certificate of incorporation, bylaws, partnership agreements, organizational
documents, limited liability company agreements, trust agreement, or such other
document as may govern such Person's formation, organization, and management.
"Continue", "Continuation", and "Continued" refers to the continuation
pursuant to Section 3.10 hereof of a Eurodollar Borrowing from one Interest
Period to the next Interest Period.
"Contract Rate" means (a) with respect to an Eurodollar Borrowing, the
Adjusted Eurodollar Rate plus the Applicable Margin, and (b) with respect to a
Base Rate Borrowing, the Base Rate plus the Applicable Margin.
"Convert," "Conversion," and "Converted" shall refer to a conversion
pursuant to SECTION 3.10 of one Type of Borrowing into another Type of
Borrowing.
"Credit Parties" means Agent, Lenders, and Issuing Banks, and "Credit
Party" means any one of the Credit Parties.
"Current Financials" means, at any time, the consolidated Financial
Statements of the Companies most recently delivered to Agent under Section
7.1(a) or 7.1(b), as the case may be.
"Customary Recourse Exceptions" means, with respect to any Non-Recourse
Debt, exclusions from the exculpation provisions with respect to such
Non-Recourse Debt for fraud, misapplication of cash, environmental claims,
breach of representations or warranties, failure to pay taxes and insurance, and
other circumstances customarily excluded by institutional lenders from
exculpation provisions and/or
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included in separate indemnification agreements in non-recourse financings of
real estate.
"DDR" means Developers Diversified Realty Corporation and entities
related thereto.
"Debt Service" means, for any Person for any period, the sum of (a) all
regularly scheduled principal payments (but excluding any balloon payments), (b)
all Interest Expense, in each case that is paid or payable during such period in
respect of all Liabilities of such Person, and (c) all Distributions in respect
of any preferred Stock of such Person that, in each case, is paid or payable
during such period.
"Debtor Relief Laws" means Title 11 of the United States Code and all
other applicable state or federal liquidation, conservatorship, bankruptcy,
moratorium, rearrangement, receivership, insolvency, reorganization, suspension
of payments, or similar Governmental Requirements affecting creditors' Rights in
effect from time to time.
"Default" is defined in Section 10.
"Defaulting Lender" means, as of any date, any Lender that has
defaulted on any of its obligations under this Agreement, which default has not
been cured or waived as of such date.
"Default Rate" means an annual rate of interest equal from day-to-day
to the lesser of (a) the Contract Rate plus four (4%), and (b) the Maximum Rate.
"Distribution" means, with respect to any Stock issued by a Person, (a)
the retirement, redemption, purchase or other acquisition for value of such
Stock by such Person, (b) the declaration or payment of any dividend on or with
respect to such Stock by such Person, (c) any loan or advance by that Person to,
or other investment by that Person in, the holder of any of such Stock, and (d)
any other payment by that Person with respect to such Stock.
"EBITDA" means, for any Person or any Borrowing Base Property for any
period, the sum of (a) Net Income, plus (b) depreciation and amortization
expense, plus (c) Interest Expense, plus (d) income taxes deducted from Net
Income in accordance with GAAP, plus (e) extraordinary losses (and any unusual
losses arising in or outside the ordinary course of business of such Person not
included in extraordinary losses) determined in accordance with GAAP that have
been reflected in the determination of Net Income, minus (f) extraordinary gains
(and any unusual gains arising in or outside the ordinary course of business of
such Person not included in extraordinary gains) determined in accordance with
GAAP that have been reflected in the determination of Net Income, minus (g) a
reserve of at least $0.50 per square foot per year. Agent may consent to
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Borrower's use of historical operating information for new Borrowing Base
Properties until the applicable Obligor has sufficient operating history. For
purposes of calculating EBITDA, Net Income shall be adjusted to reflect the
straightline accruals of rents.
"Eligible Assignee" means: (a) a Lender; (b) an Affiliate of a Lender;
and (c) any other Person approved by Agent and, unless a Default exists at the
time any assignment is effected in accordance with Section 13.11, Borrower, such
approval by Borrower not to be unreasonably withheld or delayed by Borrower and
such approval to be deemed given by Borrower if no objection is received by the
assigning Lender and Agent from Borrower within five (5) Business Days after
notice of such proposed assignment has been provided by Agent or the assigning
Lender to Borrower; provided, however, that no Company or any Affiliate of any
Company shall qualify as an Eligible Assignee.
"Employee Plan" means an employee pension benefit plan covered by Title
IV of ERISA and established or maintained by any Company.
"Environmental Law" means any and all Governmental Requirements
pertaining to health or the environment in effect in any and all jurisdictions
in which any Company is conducting, or where any Property of any Company is
located and which are applicable to any Company or any Property of any Company,
including, without limitation, the Oil Pollution Act of 1990, as amended,
("OPA"), the Clean Air Act, as amended, the Comprehensive Environmental,
Response, Compensation, and Liability Act of 1980, as amended, ("CERCLA"), the
Federal Water Pollution Control Act, as amended, the Occupational Safety and
Health Act of 1970, as amended, the Resource Conservation and Recovery Act of
1976, as amended, ("RCRA"), the Safe Drinking Water Act, as amended, the Toxic
Substances Control Act, as amended, the Superfund Amendments and Reauthorization
Act of 1986, as amended, the Hazardous Materials Transportation Act, as amended,
and other environmental conservation or protection Governmental Requirements.
"Equity Issuance" means the issuance or sale by any Company of any
Stock, or any options, warrants, or other rights to subscribe for or otherwise
acquire Stock, of such Company.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
"Eurodollar Rate" means, for any Eurodollar Borrowing for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Dow ▇▇▇▇▇ Markets Page 3750 (or any successor
page) as the London interbank offered rate (LIBOR) for deposits in Dollars at
approximately 11:00 a.m. (London time) two (2) Business Days prior to the first
(1st) day of such Interest Period for a term comparable to such Interest Period.
If for
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any reason such rate is not available, then the term "Eurodollar Rate" shall
mean, for any Eurodollar Borrowing for any Interest Period therefor, the rate
per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing
on Reuters Screen LIBO Page as the London interbank offered rate for deposits in
Dollars at approximately 11:00 a.m. (London time) two (2) Business Days prior to
the first (1st) day of such Interest Period for a term comparable to such
Interest Period; provided, however, if more than one rate is specified on
Reuters Screen LIBO Page, then the applicable rate shall be the arithmetic mean
of all such rates (rounded upwards, if necessary, to the nearest 1/100 of 1%).
"Eurodollar Borrowing" means a Borrowing bearing interest at the sum of
the Adjusted Eurodollar Rate plus the Applicable Margin.
"Existing Consolidated Affiliates" means those Consolidated Affiliates
in existence on the Closing Date.
"Existing DDR Indebtedness" is defined in Section 6.21.
"Existing Debt" means the Indebtedness of the Existing Excluded
Subsidiaries as described on Schedule 2.
"Existing Excluded Subsidiaries" means those Consolidated Affiliates
identified on Schedule 2.
"Federal Funds Rate" means, on any day, the annual rate (rounded
upwards, if necessary, to the nearest 0.01%) determined by Agent (which
determination is conclusive and binding, absent manifest error) to be equal to
the weighted average of the rates on overnight federal funds transactions with
member banks of the Federal Reserve System arranged by federal funds brokers as
published by the Federal Reserve Bank of New York on the next successive
Business Day; provided, however, that (a) if such determination date is not a
Business Day, then the Federal Funds Rate for such day shall be the rate for
such transactions on the next preceding Business Day as published on the next
successive Business Day, or (b) if those rates are not published for any
Business Day, then the Federal Funds Rate shall be the average of the quotations
at approximately 10:00 a.m. on such Business Day received by Agent from three
(3) federal funds brokers of recognized standing selected by Agent in its sole
discretion.
"Financial Statements" means, for any Person, balance sheets and
statements of earnings, shareholders' equity, and cash flow prepared (a)
according to GAAP, (b) except as stated in Section 1.4, in comparative form to
prior year-end figures or corresponding periods of the preceding fiscal year, as
applicable, and (c) on a consolidated basis if that Person had any Consolidated
Affiliates during the applicable period.
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"Fixed Constant" means, as of any date, a fixed Constant Annual Percent
utilizing (a) a rate of interest equal to eight and three fourths percent
(8.75%), and (b) a twenty-five (25) year amortization.
"Funding Loss" has the meaning set forth in Section 3.18.
"Funds Available for Distribution" means Funds from Operations minus
tenant improvements, commission expenses, and capital expenditures.
"Funds from Operations" means, for any Person for any period, net
income plus depreciation and amortization, all as determined in accordance with
GAAP; provided that there shall not be included in such calculation (a) any
proceeds of any insurance policy, (b) any gain or loss which is classified as
"extraordinary" in accordance with GAAP, (c) any capital gains, or (d) net
earnings of Unconsolidated Affiliates to the extent such earnings are not
distributable to such Person after the request of such Person.
"GAAP" means generally accepted accounting principles of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
the Financial Accounting Standards Board that are applicable on the date of this
Agreement, subject to changes permitted by Section 1.4.
"Governmental Authority" means, with respect to any Person, property,
or business, any (a) local, state, or federal judicial, executive, or
legislative instrumentality, (b) private arbitration board or panel acting
through binding arbitration or mediation, or (c) central bank having
jurisdiction over such Person, property, or business.
"Governmental Requirement" means all applicable statutes, laws,
treaties, ordinances, rules, regulations, orders, writs, injunctions, decrees,
judgments, opinions, and interpretations of any Governmental Authority.
"Hazardous Substance" means any substance (a) the presence of which
requires removal, remediation, or investigation under any Environmental Law, or
(b) that is defined or classified as a hazardous waste, hazardous material,
pollutant, contaminant, or toxic or hazardous substance under any Environmental
Law and exists in amounts or uses that violate Environmental Law.
"Increasing Lender" is defined in Section 13.13.
"Indebtedness" means, for any Person, all Liabilities of such Person,
excluding accounts payable and accrued expenses in each case incurred in the
ordinary course of business and the payment of which is not past-due (unless
payment is being contested in good faith by
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appropriate proceedings diligently conducted and for which reserves in
accordance with GAAP or otherwise reasonably acceptable to Agent have been
provided).
"Individual Borrowing Base" is defined in Section 4.1(a).
"Initial Borrowing Base Properties" is defined in Section 4.2(h).
"Intangible Assets" means, for any Person, those assets of such Person
which are (a) deferred assets, other than prepaid insurance and prepaid taxes,
(b) patents, copyrights, trademarks, tradenames, franchises, goodwill,
experimental expenses, and other similar assets which would be classified as
intangible assets on a balance sheet of such Person, (c) unamortized debt
discount and expense, and (d) assets located, and notes and receivables due from
obligors domiciled, outside of the United States of America.
"Interest Expense" means, for any Person for any period, all of such
Person's paid, accrued, or amortized interest expense on such Person's
Indebtedness (whether direct, indirect, or contingent, and including interest on
all convertible Indebtedness).
"Interest Period" has the meaning set forth in Section 3.9.
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement, or other similar
agreement or arrangement designed to protect any Person against fluctuations in
interest rates.
"Issuing Bank" and "Issuing Banks" are defined in the preamble.
"Joint Venture Categories" means Persons (including, without
limitation, corporations, partnerships, joint ventures, and similar entities)
that are not Consolidated Affiliates accounted for on an equity basis
(determined in accordance with GAAP).
"LC" means a documentary or standby letter of credit issued for the
account of any Borrower by Issuing Bank under this Agreement and under an LC
Agreement.
"LC Agreement" means a letter of credit application and agreement (in
form and substance satisfactory to Issuing Bank) executed by Borrower and
submitted to Issuing Bank for an LC for the account of Borrower.
"LC Exposure" means, without duplication, the sum of (a) the total face
amount of all undrawn and uncancelled LCs plus (b) the total unpaid
reimbursement obligations of Borrower under drawings under any LC.
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"LC Request" means a request substantially in the form of Exhibit C
executed by a Responsible Officer of Borrower.
"LC Sub-Facility" means a sub-facility of the Commitments for the
issuance of LCs, as described in Section 2.3, under which the LC Exposure (a)
may never collectively exceed $20,000,000, and (b) together with the Total
Principal Debt may never exceed the Total Commitment.
"Lenders" is defined in the preamble.
"Liabilities" means (without duplication), for any Person, (a) any
indebtedness, liabilities, or obligations required by GAAP to be classified upon
such Person's balance sheet as liabilities, (b) any liabilities secured (or for
which the holder of the Liability has an existing Right, contingent or
otherwise, to be so secured) by any Lien existing on Property owned or acquired
by that Person, (c) any obligations that have been (or under GAAP should be)
capitalized for financial reporting purposes, including all Capital Leases, (d)
any guaranties, endorsements, and other contingent obligations with respect to
the principal of the Liabilities or obligations of others, and (e) the greater
of (i) such Person's Share of any Liabilities of Unconsolidated Affiliates, and
(ii) the amount of any Liabilities of Unconsolidated Affiliates in which the
holder of such Liabilities has recourse against such Person for repayment, and
"Liability" means any of the Liabilities.
"Lien" means any lien, mortgage, security interest, pledge, assignment,
charge, title retention agreement, or encumbrance of any kind and any other
substantially similar arrangement for a creditor's claim to be satisfied from
assets or proceeds prior to the claims of other creditors or the owners.
"Litigation" means any action by or before any Governmental Authority.
"Loan Documents" means (a) this Agreement, certificates, and reports
delivered under this Agreement, and exhibits and schedules to this Agreement,
(b) the Notes, (c) the Subsidiary Guaranty, (d) any Interest Rate Agreements
with any Lender specifically relating to the Obligation, (d) all other
agreements, documents, and instruments executed by Obligors in favor of any of
the Credit Parties (or any Agent on behalf of the Credit Parties) ever delivered
in connection with or under this Agreement, (f) all LCs and LC Agreements, and
(g) all renewals, extensions, and restatements of, and amendments and
supplements to, any of the foregoing.
"Marketable Securities" means Stock that is (a) regularly traded on a
nationally recognized United States public exchange or market acceptable to
Agent on which securities, debt instruments, and/or
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mutual funds are regularly traded, and (b) not subject to any federal or state
securities laws or other laws which restrict or limit its sale or transfer.
"Material Adverse Event" means any circumstance or event that,
individually or collectively with other circumstances or events, reasonably is
expected to result in any (a) material impairment of the ability of any Obligor
to perform any of its respective payment or other obligations under any Loan
Document, (b) material impairment of the ability of any Credit Party to enforce
(i) any of the obligations of any Obligor under this Agreement or the other Loan
Documents, or (ii) any of their respective Rights under the Loan Documents, or
(c) material and adverse effect on the financial condition of the Companies,
taken as a whole, or any Obligor.
"Material Title Defects" means defects, Liens, or encumbrances other
than Liens for local real estate taxes and similar local governmental charges,
and other encumbrances in the nature of easements, servitudes, restrictions, and
rights-of-way that would customarily be deemed unacceptable title exceptions for
a prudent lender (i.e., a prudent lender would reasonably determine that such
exceptions, individually or in the aggregate, materially impair the value or use
of the property in question).
"Maturity Date" means January, ____, 2001.
"Maximum Amount" and "Maximum Rate" respectively mean, for Agent or a
Lender, the maximum non-usurious amount and the maximum non-usurious rate of
interest that, under applicable Governmental Requirement, Agent or Lender is
permitted to contract for, charge, take, reserve, or receive on the Obligation.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., or, if Moody's no
longer publishes ratings, then another ratings agency acceptable to Agent.
"Mortgage" means a Deed of Trust, Assignment, Security Agreement and
Financing Statement substantially in the form of Exhibit G, modified to the
extent necessary to meet the substantive requirements of the laws of the state
where the Borrowing Base Property is located.
"Multi-Employer Plan" means a multi-employer plan as defined in
Sections 3(37) or 4001(a)(3) of ERISA or Section 414(f) of the Code to which any
Borrower or any of its Consolidated Affiliates (or any Person that, for purposes
of Title IV of ERISA, is a member of any Borrower's controlled group or is under
common control with any Borrower within the meaning of Section 414 of the Code)
is making, or has made, or is accruing, or has accrued, an obligation to make
contributions.
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"Net Income" means, for any Person or Borrowing Base Property for any
period, the net earnings (or loss) after taxes of such Person or Borrowing Base
Property determined in accordance with GAAP.
"Net Proceeds" means, with respect to any Equity Issuance by any
Company, the amount of cash received by such Company in connection with such
transaction after deducting therefrom the aggregate, without duplication, of the
following amounts to the extent properly attributable to such transaction: (a)
reasonable brokerage commissions, attorneys' fees, finder's fees, financial
advisory fees, accounting fees, underwriting fees, investment banking fees, and
other similar commissions and fees (and expenses and disbursements of any of the
foregoing), in each case, to the extent paid by such Company; (b) printing and
related expenses and filing, recording, or registration fees or charges or
similar fees or charges paid by such Company; and (c) taxes paid or payable by
such Company to any Governmental Authority as a result of such transaction.
"Non-Recourse Debt" means, for any Person, any Indebtedness of such
Person in which the holder of such Indebtedness may not look to such Person
personally for repayment, other than to the extent of any security therefor or
pursuant to Customary Recourse Exceptions.
"Notes" means one of the Revolving Credit Notes substantially in the
form of EXHIBIT D, and "NOTE" means any one of the Notes.
"NRA" means, for any Property, the net rentable area of such Property.
"Obligation" means all present and future indebtedness and obligations,
and all renewals, increases, and extensions thereof, or any part thereof, now or
hereafter owed to any Credit Party by any Borrower under any Loan Document,
together with all interest accruing thereon, fees, costs, and expenses
(including all reasonable attorneys' fees and expenses incurred in the
enforcement or collection thereof) payable under the Loan Documents or in
connection with the protection of Rights under the Loan Documents.
"Obligors" means Borrower and Subsidiary Guarantors, and "OBLIGOR"
means any one of the Obligors.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereof, established under ERISA.
"Permitted Conduit Debt" means Indebtedness of Borrower or a
Consolidated Affiliate (a) that is non-recourse, (b) that is secured by a single
Property that is not a Borrowing Base Property and that is owned by Borrower or
such Consolidated Affiliate, respectively, which is the owner of such Property,
(c) that has an original term of not less than five (5) years, and (d) the
original principal amount of
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which does not exceed seventy five percent (75%) of the book value of such
Property or other similar Indebtedness approved by Agent as Permitted Conduit
Debt.
"Permitted Distributions" means: (a) for Borrower in any fiscal quarter
of Borrower, the greater of (i) the lesser of (A) an amount not to exceed ninety
percent (90%) of Borrower's Funds from Operations for the immediately preceding
fiscal quarter, and (B) an amount not to exceed ninety-five percent (95%) of the
Funds Available for Distribution for the immediately preceding fiscal quarter,
and (ii) the amount of Distributions required to be paid during such fiscal
quarter in order for Borrower to qualify as a REIT; and (b) for the Consolidated
Affiliates in any fiscal quarter of the Partnership, the amount of Distributions
required to be paid during such fiscal quarter in order for Borrower to qualify
as a REIT.
"Permitted Liens" means:
(a) Liens, if any, granted to Agent, for the ratable benefit of the
Credit Parties, to secure the Obligation;
(b) pledges or deposits made to secure payment of worker's compensation
(or to participate in any fund in connection with worker's compensation
insurance), unemployment insurance, pensions, or social security programs;
(c) encumbrances consisting of zoning restrictions, easements, or other
restrictions on the use of real Property, provided that such items do not
materially impair the use of such Property for the purposes intended and none of
which is violated in any material respect by existing or proposed structures or
land use;
(d) Liens imposed by mandatory provisions of any Governmental
Requirement such as for materialmen's, mechanic's, warehousemen's, and other
like Liens arising in the ordinary course of business, securing payment of any
Liability whose payment is not yet due or that is being contested in good faith
by appropriate proceedings diligently conducted, and for which reserves in
accordance with GAAP or other security (and otherwise reasonably acceptable to
Agent) have been provided;
(e) Liens for taxes, assessments, and governmental charges or
assessments that are not yet due and payable or that are being contested in good
faith by appropriate proceedings diligently conducted, and for which reserves in
accordance with GAAP or other security (and otherwise reasonably acceptable to
Agent) have been provided; and
(f) Liens securing assessments or charges payable to a Property owner
association or similar entity, which assessments are not yet due
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and payable or that are being contested in good faith by appropriate proceedings
diligently conducted, and for which reserves in accordance with GAAP or other
security (and otherwise reasonably acceptable to Agent) have been provided.
"Person" means any individual, trust, corporation, partnership, limited
liability company, joint venture, unincorporated organization, or other similar
entity, or any Governmental Authority.
"Post-Foreclosure Plan" is defined in Section 12.11(f).
"Potential Default" means the occurrence of any event or the existence
of any circumstance that could, upon notice or lapse of time or both, become a
Default.
"Principal Debt" means, for a Lender and at any time, the unpaid
principal balance of all outstanding Borrowings from such Lender hereunder as of
such date.
"Property" means improved or unimproved real estate located in the
United States.
"Property Information" is defined in Section 4.2(a).
"Pro Rata" and "Pro Rata Share" means, when determined for any Lender,
the proportion (stated as a percentage) that (a) such Lender's Commitment, or,
if the Total Commitments shall have been terminated, then of the sum of (without
duplication) (i) the Principal Debt of such Lender's Note plus (ii) the LC
Exposure of such Lender, bears to (b) the Total Commitment, or, if the Total
Commitments have been terminated, then of the sum of (without duplication) (i)
the Total Principal Debt of the Notes plus (ii) the LC Exposure of all Lenders.
"Prudential Debt" means that certain any and all Indebtedness of
Borrower to Prudential Securities Credit Corporation or a related entity, other
than Permitted Conduit Debt.
"Qualified Property" has the meaning set forth in Section 4.2(b).
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"REIT" means a "real estate investment trust" for purposes of the Code.
"Removal Notice" is defined in Section 4.5(a).
"Representatives" means representatives, officers, directors,
employees, attorneys, and agents.
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"Required Appraisal" means an appraisal commissioned by and addressed
to Agent (acceptable to Agent as to form, substance and appraisal date),
prepared by a professional appraiser acceptable to Agent and having the minimum
qualifications required under all applicable regulations governing the Credit
Parties.
"Required Lenders" means, as of any date, any combination of Lenders
(other than Defaulting Lenders) who collectively hold sixty-six and two-thirds
percent (66-2/3%) or more of the Total Commitments (excluding the Commitments of
Defaulting Lenders), or if the Total Commitments have been terminated, then of
the sum of (without duplication) (a) the Total Principal Debt of the Notes
(other than of any Defaulting Lenders) plus (b) the LC Exposure of all Lenders
(other than of any Defaulting Lenders).
"Reserve Requirement" means, with respect to any Eurodollar Borrowing
for the relevant Interest Period, the actual aggregate reserve requirements
(including all basic, supplemental, emergency, special, marginal, and other
reserves required by applicable Governmental Requirement) applicable to a member
bank of the Federal Reserve System for eurocurrency fundings or liabilities.
"Responsible Officer" means, for any Person, any chairman, president,
chief executive officer, chief financial officer, controller, secretary,
executive vice president, or senior vice president of such Person.
"Rights" means rights, remedies, powers, privileges, and benefits.
"Second Properties" is defined in Section 4.2(i).
"Second Borrowing Base Properties" is defined in Section 4.2(i).
"Share" means, for any Person, such Person's share of the assets,
liabilities, revenues, income, losses, or expenses of an Unconsolidated
Affiliate based upon such Person's percentage ownership of the Stock of such
Unconsolidated Affiliate.
"Solvent" means, as to a Person, that (a) the aggregate fair market
value of its assets exceeds its Liabilities, and (b) such Person is able to pay
and is paying its Liabilities as they mature.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw Hill,
Inc., a New York corporation, or if S&P no longer publishes ratings, then
another ratings agency acceptable to Agent.
"Stock" means all shares, options, warrants, general or limited
partnership interests, membership interests, or other ownership interests
(regardless of how designated) of or in a corporation,
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partnership, limited liability company, trust, or other entity, whether voting
or nonvoting, including common stock, preferred stock, or any other "equity
security" (as such term is defined in Rule 3a11-1 of the General Rules and
Regulations promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended).
"Subsequent Lender" is defined in Section 13.13.
"Subsidiary Guarantors" means all existing and future Consolidated
Affiliates that are not Existing Excluded Subsidiaries, and "Subsidiary
Guarantor" means any one of the Subsidiary Guarantors.
"Subsidiary Guaranty" means the Unconditional Guaranty of Payment dated
of even date herewith, executed by each of the Subsidiary Guarantors in favor of
the Credit Parties, and substantially in the form of Exhibit E.
"Systems" is defined in Section 6.20.
"Tangible Net Worth" means, as of any date, (a) Total Assets, minus (b)
Intangible Assets, minus (c) all Liabilities of the Companies, on a consolidated
basis, as of such date.
"Taxes" means, for any Person, taxes, assessments, or other
governmental charges or levies imposed upon it, its income, or any of its
properties, franchises, or assets.
"Termination Date" means the earlier of (a) the Maturity Date, and (b)
the effective date that Lenders' commitments to lend hereunder are otherwise
canceled or terminated in accordance with this Agreement.
"Total Assets" means, for the Companies, on a consolidated basis, as of
any date, all assets of such Person determined in accordance with GAAP.
"Total Commitment" means, at any time, the sum of the Commitments of
all Lenders, but in no event to exceed $150,000,000.
"Total Consolidated Value" means, as of any date, (a) the aggregate
amount of Adjusted NOI with respect to all Properties owned by the Companies as
of such date, divided by (b) 9.5%. If any Company that owns any Property has any
minority interests, then Total Consolidated Value calculated in the same manner
shall be adjusted proportionally to reflect the minority interests' share of
such Property.
"Total Indebtedness to Total Consolidated Value Ratio" means, as of any
date, the ratio of (a) all Indebtedness of the Companies, on a
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consolidated basis, as of such date, to (b) the Total Consolidated Value as of
such date.
"Total Principal Debt" means, at any time, the sum of the Principal
Debt of all Lenders.
"Type" means any type of Borrowing determined with respect to the
applicable interest option.
"Unconsolidated Affiliate" means, in respect of any Person, any other
Person in whom such Person holds Stock and whose financial results would not be
consolidated under GAAP with the financial results of such Person on the
consolidated financial statements of such Person.
"Unused Commitment" means, as of any date, (a) the Total Commitment
minus (b) the Commitment Usage.
"Variable Constant" means, as of any date, a variable Constant Annual
Percent utilizing (i) a rate of interest equal to one and one-half percent
(1.5%) in excess of the most recent rate published on such date in the United
States Federal Reserve Statistical Release (H.15) for 10-year Treasury Constant
Maturities, and (ii) a twenty-five (25) year amortization.
"Y2K Notice" is defined in Section 7.18.
"Year 2000 Compliant" is defined in Section 6.20.
1.2 Time References. Unless otherwise specified in the Loan Documents
(a) time references are to time in Dallas, Texas, and (b) in calculating a
period from one date to another, the word "from" means "from and including" and
the word "to" or "until" means "to but excluding."
1.3 Other References. Unless otherwise specified in the Loan Documents
(a) where appropriate, the singular includes the plural and vice versa, and
words of any gender include each other gender, (b) headings and caption
references may not be construed in interpreting provisions, (c) monetary
references are to currency of the United States of America, (d) section,
paragraph, annex, schedule, exhibit, and similar references are to the
particular Loan Document in which they are used, (e) references to "telecopy,"
"facsimile," "fax," or similar terms are to facsimile or telecopy transmissions,
(f) references to "including" mean including without limiting the generality of
any description preceding that word, (g) the rule of construction that
references to general items that follow references to specific items are limited
to the same type or character of those specific items is not applicable in the
Loan Documents, (h) references to any Person include that Person's heirs,
personal representatives,
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successors, trustees, receivers, and permitted assigns, (i) references to any
Governmental Requirement include every amendment or supplement to it, rule and
regulation adopted under it, and successor or replacement for it, and (j)
references to any Loan Document or other document include every renewal and
extension of it, amendment and supplement to it, and replacement or substitution
for it.
1.4 Accounting Principles. Under the Loan Documents, unless otherwise
stated, (a) GAAP determines all accounting and financial terms and compliance
with financial covenants, (b) GAAP in effect on the date of this Agreement
determines compliance with financial covenants, (c) otherwise, all accounting
principles applied in a current period must be comparable (except for changes in
accounting principles adequately disclosed and in conformity with GAAP) in all
material respects to those applied during the preceding comparable period, and
(d) all accounting and financial terms and compliance with financial covenants
must be for the Companies, on a consolidated basis, as applicable. If there is a
change in GAAP after the date hereof, then each Compliance Certificate shall
include calculations setting forth the adjustments from the relevant financial
items as shown in the Current Financials, based on the then-current GAAP, to the
corresponding financial items based on GAAP as used in the Current Financials
delivered to Agent and Lenders on or prior to the date hereof, so as to
demonstrate how such financial covenant compliance was derived from the Current
Financials.
SECTION 2
COMMITMENT
2.1 Revolving Facility. Subject to the provisions in the Loan
Documents, each Lender severally and not jointly agrees to lend to Borrower such
Lender's Pro Rata Share of one or more Borrowings hereunder which Borrower may
borrow, repay, and reborrow under this Agreement, subject to the following
conditions:
(a) each Borrowing requested by Borrower hereunder must occur on a
Business Day and no later than the Business Day immediately preceding the
Termination Date;
(b) each Borrowing requested by Borrower must be in an amount not less
than $1,000,000 or a greater multiple of $100,000;
(c) the Commitment Usage may not exceed the lesser of (i) the Borrowing
Base, and (ii) the Total Commitment;
(d) the sum of (i) each Lender's Principal Debt plus (ii) such Lender's
Pro Rata Share of the LC Exposure may not exceed such Lender's Commitment; and
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(e) during the period between the Closing Date and the date on which
the last of the Second Borrowing Base Properties is either admitted into the
Borrowing Base or rejected by Agent or Lenders hereunder, all Borrowings may not
exceed the aggregate amount of $13,000,000.
2.2 Borrowing Procedure. The following procedures apply to Borrowings:
(a) Borrower may request a Borrowing by submitting to Agent a Borrowing
Request; provided, however, that Borrower may not request more than three (3)
Borrowings (other than a Continuation or Conversion of an existing Borrowing) in
any calendar month. The Borrowing Request must be received by Agent no later
than 11:00 a.m. on (i) the third (3rd) Business Day preceding the Borrowing Date
for any Eurodollar Borrowing, or (ii) the Business Day preceding the Borrowing
Date for any Base Rate Borrowing. Agent shall promptly notify each Lender of its
receipt of any Borrowing Request and its contents. A Borrowing Request is
irrevocable and binding on Borrower.
(b) By 11:00 a.m. on the applicable Borrowing Date, each Lender shall
remit its Pro Rata Share of each requested Borrowing by wire transfer to Agent
pursuant to Agent's wire transfer instructions on Schedule 1 (or as otherwise
directed by Agent) in funds that are available for immediate use by Agent.
Subject to receipt of such funds, Agent shall make such funds available to
Borrower in Dallas, Texas at 2:00 p.m. on such Borrowing Date (unless it has
actual knowledge that any applicable condition precedent has not been satisfied
by Borrower).
(c) Absent contrary written notice from a Lender, Agent may assume that
each Lender has made its Pro Rata Share of the requested Borrowing available to
Agent on the applicable Borrowing Date, and Agent may, in reliance upon such
assumption (but is not required to), make available to Borrower a corresponding
amount. If a Lender fails to make its Pro Rata Share of any requested Borrowing
available to Agent on the applicable Borrowing Date, then Agent may recover the
applicable amount on demand (i) from such Lender, together with interest at the
Federal Funds Rate for the period commencing on the date the amount was made
available to Borrower by Agent and ending on (but excluding) the date Agent
recovers the amount from such Lender, or (ii) if such Lender fails to pay its
amount upon Agent's demand, then from Borrower, together with interest at an
annual interest rate equal to the rate applicable to the requested Borrowing for
the period commencing on the Borrowing Date and ending on (but excluding) the
date Agent recovers the amount from Borrower. No Lender is responsible for the
failure of any other Lender to make its Pro Rata Share of any Borrowing.
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2.3 Letters of Credit.
(a) Conditions. Agent shall be an Issuing Bank, and upon the written
approval of Agent and Borrower, a Lender may be an Issuing Bank. Subject to the
terms and conditions of this Agreement, each Issuing Bank agrees, if requested
by Borrower, to issue LCs upon Borrower's making or delivering an LC Request and
delivering an LC Agreement, both of which must be received by Agent and such
Issuing Bank no later than the third (3rd) Business Day before the Business Day
on which the requested LC is to be issued, provided that (i) no LC may expire
after a date that is one (1) month before the Maturity Date, (ii) the LC
Exposure may not exceed the limitations in the definition of LC Sub-facility,
(iii) each LC must expire no later than one (1) year following its issuance,
(iv) the limitations in Sections 2.1(c) and (d) may not be exceeded, and (v)
each LC must be in the minimum amount of $50,000.
(b) Participation. Immediately upon an Issuing Bank's issuance of any
LC, such Issuing Bank shall be deemed to have sold and transferred to each other
Lender, and each other Lender shall be deemed irrevocably and unconditionally to
have purchased and received from such Issuing Bank, without recourse or
warranty, an undivided interest and participation to the extent of such Lender's
Pro Rata Share in the LC and all applicable Rights of such Issuing Bank in the
LC -- other than Rights to receive certain fees provided in Section 3.20(d) to
be for the Issuing Bank's sole account.
(c) Reimbursement Obligation. To induce the Issuing Banks to issue and
maintain LCs, and to induce Lenders to participate in issued LCs, Borrower
agrees to pay or reimburse each Issuing Bank:
(i) on the second (2nd) Business Day after such Issuing Bank
notifies Agent and Borrower that such Issuing Bank has made payment
under a LC, the amount paid by such Issuing Bank; and
(ii) within five (5) Business Days after demand, the amount of
any additional fees such Issuing Bank customarily charges for amending
LCs Agreements, for honoring drafts under LCs, and for taking similar
action in connection with letters of credit.
If Borrower has not reimbursed any Issuing Bank for any drafts paid by the date
on which reimbursement is required under this Section, then Agent is irrevocably
authorized to fund Borrower's reimbursement obligations as a Base Rate Borrowing
if the conditions in this Agreement for such a Borrowing (other than any notice
requirements or minimum funding amounts) have, to Agent's knowledge, been
satisfied. The proceeds of that Borrowing shall be advanced directly to the
applicable Issuing Bank to pay Borrower's unpaid reimbursement obligations. If
funds cannot be advanced as a result of Borrower's failure to satisfy any
condition precedent set forth in Section 5, then Borrower's reimbursement
obligation shall constitute a demand obligation. Borrower's obligations under
this Section are absolute
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and unconditional under any and all circumstances and irrespective of any
setoff, counterclaim, or defense to payment that any Borrower may have at any
time against any Issuing Bank or any other Person. From the date that an Issuing
Bank pays a draft under a LC until Borrower either reimburses or is obligated to
reimburse such Issuing Bank for that draft under this Section, the amount of
that draft bears interest payable to such Issuing Bank at the rate then
applicable to Base Rate Borrowings. From the due date of the respective amounts
due under this Section, to the date paid (including any payment from proceeds of
a Base Rate Borrowing), unpaid reimbursement amounts accrue interest that is
payable on demand at the Default Rate.
(d) General. Issuing Banks shall promptly notify Agent and Borrower of
the date and amount of any draft presented for honor under any LC (but failure
to give notice will not affect Borrower's obligations under this Agreement). The
applicable Issuing Bank shall pay the requested amount upon presentment of a
draft unless presentment on its face does not comply with the terms of the
applicable LC. When making payment, such Issuing Bank may disregard (i) any
default or potential default that exists under any other agreement, and (ii)
obligations under any other agreement that have or have not been performed by
the beneficiary or any other Person (and such Issuing Bank is not liable for any
of those obligations). Borrower's reimbursement obligations to Issuing Banks and
Lenders, and each Lender's obligations to Issuing Banks, under this Section are
absolute and unconditional irrespective of, and Issuing Banks are not
responsible for, (i) the validity, enforceability, sufficiency, accuracy, or
genuineness of documents or endorsements (even if they are in any respect
invalid, unenforceable, insufficient, inaccurate, fraudulent, or forged), (ii)
any dispute by any Company with or any Company's claims, setoffs, defenses,
counterclaims, or other Rights against any Credit Party or any other Person, or
(iii) the occurrence of any Potential Default or Default. However, nothing in
this Agreement constitutes a waiver of Borrower's Rights to assert any claim or
defense based upon the gross negligence or willful misconduct of any Credit
Party. Issuing Banks shall promptly pay to Agent for Agent to promptly
distribute reimbursement payments received from any Borrower to all Lenders
according to their Pro Rata Share.
(e) Obligation of Lenders. If Borrower fails to reimburse any Issuing
Bank as provided in Section 2.3(c) by the date on which reimbursement is due
under that Section, and funds cannot be advanced under the Section 2.1 to
satisfy the reimbursement obligations, then Agent shall promptly notify each
Lender of Borrower's failure, of the date and amount paid, and of each Lender's
Pro Rata Share of the unreimbursed amount. Each Lender shall promptly and
unconditionally make available to Agent, for the account of the applicable
Issuing Bank, in immediately available funds its Pro Rata Share of the unpaid
reimbursement obligation, subject to the limitations of Section 2.1(d). Funds
are due and payable to Agent before the close of
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business on the Business Day when Agent gives notice to each Lender of
Borrower's reimbursement failure (if notice is given before 1:00 p.m.) or on the
next succeeding Business Day (if notice is given after 1:00 p.m.). All amounts
payable by any Lender accrue interest after the due date at the Federal Funds
Rate from the day the applicable draft or draw is paid by Agent to (but not
including) the date the amount is paid by such Lender to Agent. Upon receipt of
any such funds, Agent shall make them available to the applicable Issuing Bank.
(f) Duties of Issuing Bank. Each Credit Party and each Borrower agree
that, in paying any draft under any LC, no Issuing Bank has any responsibility
to obtain any document (other than any documents expressly required by the
respective LC) or to ascertain or inquire as to any document's validity,
enforceability, sufficiency, accuracy, or genuineness or the authority of any
Person delivering it. Neither such Issuing Bank nor its Representatives will be
liable to any Credit Party or any Company for any LC's use or for any
beneficiary's acts or omissions (including, without limitation, any acts or
omissions constituting ordinary negligence). Any action, inaction, error, delay,
or omission taken or suffered by an Issuing Bank or any of its Representatives
in connection with any LC, applicable drafts or documents, or the transmission,
dispatch, or delivery of any related message or advice, if in good faith and in
conformity with applicable Governmental Requirements and in accordance with the
standards of care specified in the Uniform Customs and Practices for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No. 500
(as amended or modified), is binding upon the Companies and the Credit Parties
and, except as provided in Section 2.3(e), does not place such Issuing Bank or
any of its Representatives under any resulting liability to any Company or any
Credit Party. No Issuing Bank shall be liable to any Company or any Credit Party
for any action taken or omitted, in the absence of fraud, gross negligence or
willful misconduct, by such Issuing Bank or its Representative in connection
with any LC.
(g) Cash Collateral. On the Termination Date and if requested by
Required Lenders while a Default exists, Borrower shall provide Agent, for the
benefit of the Issuing Banks and Lenders, cash collateral in an amount to equal
the then-existing LC Exposure.
(h) INDEMNIFICATION. BORROWER SHALL PROTECT, INDEMNIFY, PAY, AND SAVE
EACH CREDIT PARTY, AND THEIR RESPECTIVE REPRESENTATIVES, HARMLESS FROM AND
AGAINST ANY AND ALL CLAIMS, DEMANDS, LIABILITIES, DAMAGES, COSTS, CHARGES, AND
EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES) WHICH ANY OF THEM MAY INCUR OR
BE SUBJECT TO AS A CONSEQUENCE OF THE ISSUANCE OF ANY LC, ANY DISPUTE ABOUT IT,
OR THE FAILURE OF ISSUING BANK TO HONOR A DRAW REQUEST UNDER ANY LC AS A RESULT
OF ANY ACT OR OMISSION (WHETHER RIGHT OR WRONG) OF ANY PRESENT OR FUTURE
GOVERNMENTAL AUTHORITY. ALTHOUGH EACH CREDIT PARTY, AND THEIR RESPECTIVE
REPRESENTATIVES, HAVE THE RIGHT TO BE INDEMNIFIED UNDER THIS AGREEMENT FOR ITS
OR THEIR OWN ORDINARY NEGLIGENCE, NO PERSON
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IS ENTITLED TO INDEMNITY UNDER THE FOREGOING FOR ITS OWN (OR ITS
REPRESENTATIVES') FRAUD, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
(i) LC Agreements. Although referenced in any LC, terms of any
particular agreement or other obligation to the beneficiary are not incorporated
into this Agreement in any manner. The fees and other amounts payable with
respect to each LC are as provided in this Agreement, drafts under each LC are
part of the Obligation, only the events specified in this Agreement as a Default
shall constitute a default under any LC or LC Agreement, and the terms of this
Agreement control any conflict between the terms of this Agreement and any LC
Agreement.
SECTION 3
TERMS OF PAYMENT
3.1 Notes and Payments.
(a) The Principal Debt shall be evidenced by the Notes, which Notes
shall be payable by Borrower to Lenders in the aggregate stated principal amount
of the Total Commitment, or so much thereof as shall be advanced prior to
maturity.
(b) Borrower must make each payment and prepayment on the Obligation,
without offset, counterclaim, or deduction, to Agent's principal office in
Dallas, Texas, in Dollars that will be available for immediate use by Agent by
2:00 p.m. on the day due. Payments received after such time shall be deemed
received on the next Business Day. Agent shall pay to each Lender any payment to
which such Lender is entitled on the same day Agent receives the funds from
Borrower if Agent receives the payment or prepayment before 2:00 p.m., and
otherwise before 2:00 p.m. on the following Business Day. If and to the extent
that Agent does not make payments to any Lender when due, then Agent shall be
obligated to pay to such Lender such unpaid amounts together with interest at
the Federal Funds Rate from the due date until (but not including) the payment
date.
3.2 Interest and Principal Payments.
(a) Interest Payments. Subject to Section 13.2, accrued interest on
each Borrowing is due and payable on the first day of each calendar month during
the term of this Agreement, commencing on February 1, 1999, and on the
Termination Date; provided, however, that interest with respect to any Base Rate
Borrowing shall also be due and payable on the Conversion date of any such
Borrowing to a Eurodollar Borrowing.
(b) Principal Payments. The Total Principal Debt is due and payable on
the Termination Date.
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(c) Voluntary Prepayment. Borrower may voluntarily repay or prepay all
or any part of the Total Principal Debt at any time without premium or penalty,
subject to the following conditions:
(i) Agent must receive Borrower's written payment notice by
(A) 11:00 a.m. on the Business Day preceding the date of payment of a
Eurodollar Borrowing, and (B) 2:00 p.m. on the Business Day preceding
the date of payment of a Base Rate Borrowing, which shall specify the
payment date and the Type and amount of the Borrowing(s) to be paid,
and which shall constitute an irrevocable and binding obligation of
Borrower to make a repayment or prepayment on the designated date;
(ii) each partial repayment or prepayment must be in a minimum
amount of at least $500,000 and be an integral multiple of $100,000,
or, if such repayment or prepayment is less than $500,000, then equal
to the Total Principal Debt plus all accrued interest thereon; and
(iii) Borrower shall pay any related Funding Loss upon demand.
(d) Mandatory Prepayment. Notwithstanding anything contained herein or
in the Loan Documents to the contrary, if at any time the outstanding Total
Principal Debt exceeds the Borrowing Base, then Borrower shall immediately
prepay in immediately available funds such excess balance, together with any
related Funding Loss.
3.3 Interest Options. Except as specifically otherwise provided,
Borrowings shall bear interest at an annual rate equal to the lesser of (a) the
Base Rate plus the Applicable Margin, or the Adjusted Eurodollar Rate plus the
Applicable Margin (in each case as designated or deemed designated by Borrower
and, in the case of Eurodollar Borrowings, for the Interest Period designated by
Borrower), and (b) the Maximum Rate. Each change in the Base Rate and Maximum
Rate is effective, without notice to Borrower or any other Person, upon the
effective date of change.
3.4 Quotation of Rates. A Representative of Borrower may call Agent
before delivering a Borrowing Request to receive an indication of the interest
rates then in effect, but the indicated rates do not bind Agent or Lenders or
affect the interest rate that is actually in effect when Borrower delivers its
Borrowing Request or on the Borrowing Date.
3.5 Default Rate. If permitted by applicable law, at the election of
Required Lenders and notice from Agent to Borrower, all past-due Principal Debt
and past-due interest accruing on any of the foregoing, bears interest from the
date due (stated or by
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acceleration) at the Default Rate until paid, regardless of whether payment is
made before or after entry of a judgment.
3.6 Interest Recapture. If the designated interest rate applicable to
any Borrowing exceeds the Maximum Rate, then the interest rate on that Borrowing
is limited to the Maximum Rate, provided that any subsequent reductions in the
designated rate shall not reduce the interest rate thereon below the Maximum
Rate until the total amount of accrued interest equals the amount of interest
that would have accrued if that designated rate had always been in effect. If at
maturity (stated or by acceleration), or at final payment of the Notes, the
total interest paid or accrued is less than the interest that would have accrued
if the designated rates had always been in effect, then, at that time and to the
extent permitted by applicable law, Borrower shall pay an amount equal to the
difference between (a) the lesser of the amount of interest that would have
accrued if the designated rates had always been in effect and the amount of
interest that would have accrued if the Maximum Rate had always been in effect,
and (b) the amount of interest actually paid or accrued on the Notes.
3.7 Interest Calculations.
(a) Interest shall be calculated on the basis of actual number of days
elapsed (including the first day but excluding the last day) but computed as if
each calendar year consisted of 360 days and 30-day months for all Borrowings
(unless the calculation would result in an interest rate greater than the
Maximum Rate, in which event interest shall be calculated on the basis of a year
of 365 or 366 days, as the case may be). All interest rate determinations and
calculations by Agent are conclusive and binding absent manifest error.
(b) The provisions of this Agreement relating to calculation of the
Base Rate and the Adjusted Eurodollar Rate are included only for the purpose of
determining the rate of interest or other amounts to be paid under this
Agreement that are based upon those rates. Each Lender may fund and maintain its
funding of all or any part of each Borrowing as it selects.
3.8 Maximum Rate. Regardless of any provision contained in any Loan
Document or any document related thereto, it is the intent of the parties to
this Agreement that no Credit Party may contract for, charge, take, reserve,
receive or apply, as interest on all or any part of the Obligation any amount in
excess of the Maximum Rate or the Maximum Amount or receive any unearned
interest in violation of any applicable law, and, if any Credit Party ever does
so, then any excess shall be treated as a partial repayment or prepayment of
principal and any remaining excess shall be refunded to Borrower. In determining
if the interest paid or payable exceeds the Maximum Rate, Borrower and the
Credit Parties shall, to the maximum extent permitted under
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applicable law, (a) treat all Borrowings as but a single extension of credit
(and the Credit Parties and Borrower agree that is the case and that provision
in this Agreement for multiple Borrowings is for convenience only), (b)
characterize any non-principal payment as an expense, fee, or premium rather
than as interest, (c) exclude voluntary repayments or prepayments and their
effects, and (d) amortize, prorate, allocate, and spread the total amount of
interest throughout the entire contemplated term of the Obligation. If, however,
the Obligation is paid in full before the end of its full contemplated term, and
if the interest received for its actual period of existence exceeds the Maximum
Amount, then the Credit Parties shall refund any excess (and the Credit Parties
may not, to the extent permitted by applicable law, be subject to any penalties
provided by any Governmental Requirements for contracting for, charging, taking,
reserving or receiving interest in excess of the Maximum Amount).
3.9 Interest Periods. When Borrower requests any Eurodollar Borrowing,
Borrower may elect the applicable interest period (each an "Interest Period"),
which may be, at Borrower's option, one (1) month, two (2) months, three (3)
months, or six (6) months, subject to the following conditions: (a) the initial
Interest Period for a Eurodollar Borrowing commences on the applicable Borrowing
Date or Conversion date, and each subsequent Interest Period applicable to any
Borrowing commences on the day when the next preceding applicable Interest
Period expires; (b) if any Interest Period for a Eurodollar Borrowing begins on
a day for which there exists no numerically corresponding Business Day in the
calendar month at the end of the Interest Period ("Ending Calendar Month"), then
the Interest Period ends on the next succeeding Business Day of the Ending
Calendar Month, unless there is no succeeding Business Day in the Ending
Calendar Month in which case the Interest Period ends on the next preceding
Business Day of the Ending Calendar Month; (c) no Interest Period for any
portion of Total Principal Debt may extend beyond the scheduled repayment date
for that portion of Principal Debt; and (d) there may not be in effect at any
one time more than five (5) Interest Periods.
3.10 Continuations; Conversions. Borrower may (a) on the last day of
the applicable Interest Period Convert all or part of a Eurodollar Borrowing to
a Base Rate Borrowing, (b) at any time Convert all or part of a Base Rate
Borrowing to a Eurodollar Borrowing, and (c) on the last day of an Interest
Period, Continue a Eurodollar Borrowing for a new Interest Period. Any such
Conversion or Continuation is subject to the dollar limits and denominations of
Section 2.1 and may be accomplished by delivering a Borrowing Request to Agent
no later than 11:00 a.m. (i) on the third (3rd) Business Day before (A) the
Conversion date for Conversion to a Eurodollar Borrowing, and (B) the last day
of the Interest Period, for the Continuation to a new Interest Period, and (ii)
one (1) Business Day before the last day of the Interest Period for Conversion
to a Base Rate Borrowing. Absent a Borrowing Notice, a Eurodollar Borrowing
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shall be Continued as a Eurodollar Borrowing having a one (1) month Interest
Period (so long as the last day of such Interest Period does not extend beyond
the Maturity Date in which case such Eurodollar Borrowing shall be Converted to
a Base Rate Borrowing) when the applicable Interest Period expires.
3.11 Order of Application.
(a) No Default. If no Default exists, then except as otherwise
specifically provided in the Loan Documents, any payment shall be applied to the
Obligation in the order and manner as Borrower directs.
(b) Default. If a Default exists, any payment (including proceeds from
the exercise of any Rights) shall be applied in the following order: (i) to all
fees and expenses for which any Credit Party has not been paid or reimbursed in
accordance with the Loan Documents (and if such payment is less than all unpaid
or unreimbursed fees and expenses, then the payment shall be paid against unpaid
and unreimbursed fees and expenses in the order of incurrence or due date); (ii)
to accrued interest on the Principal Debt; (iii) to the Total Principal Debt and
the remaining Obligation in the order and manner as the Required Lenders deem
appropriate; and (iv) as a deposit with Agent, for the benefit of the Credit
Parties, as security for and payment of any LC Exposure.
(c) Pro Rata. Each payment or prepayment shall be distributed to each
Lender in accordance with its Pro Rata Share of such payment or prepayment.
3.12 Right of Setoff; Adjustments.
(a) Setoff. Upon the occurrence and during the continuance of any
Default, each Lender (and each of its Affiliates) is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by such
Lender (or any of its Affiliates) to or for the credit or the account of any
Borrower against any and all of the obligations of any Borrower now or hereafter
existing under this Agreement and the Note held by such Lender, irrespective of
whether such Lender shall have made any demand under this Agreement or such Note
and although such obligations may be unmatured. Each Lender agrees promptly to
notify Borrower after any such setoff and application made by such Lender;
provided, however, that the failure to give such notice shall not affect the
validity of such setoff and application. The Rights of each Lender under this
Section are in addition to other Rights (including, without limitation, other
Rights of setoff) that such Lender may have.
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(b) Adjustments. If any Lender (a "Benefitted Lender") shall at any
time receive any payment of all or part of the Principal Debt owing to it, or
interest thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by setoff, or otherwise), in a greater proportion
than any such payment to or collateral received by any other Lender, if any, in
respect of such other Lender's Principal Debt owing to it, or interest thereon,
such Benefitted Lender shall purchase for cash from the other Lenders a
participating interest in such portion of each such other Lender's Principal
Debt owing to it, or shall provide such other Lenders with the benefits of any
such collateral, or the proceeds thereof, as shall be necessary to cause such
Benefitted Lender to share the excess payment or benefits of such collateral or
proceeds ratably with all Lenders; provided, however, that if all or any portion
of such excess payment or benefits is thereafter recovered from such Benefitted
Lender, then such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest.
Borrower agrees that any Lender so purchasing a participation from a Lender
pursuant to this Section may, to the fullest extent permitted by law, exercise
all of its Rights of payment (including the Right of setoff) with respect to
such participation as fully as if such Person were the direct creditor of
Borrower in the amount of such participation.
3.13 Booking Borrowings. To the extent permitted by applicable law, any
Lender may make, carry, or transfer its Borrowings at, to, or for the account of
any of its branch offices or the office of any of its Affiliates. However, no
Affiliate is entitled to receive any greater payment under Section 3.14 than the
transferor Lender would have been entitled to receive with respect to those
Borrowings, and a transfer may not be made if, as a direct result of it, Section
3.14 or 3.15 would apply to any of the Obligation. If any of the conditions of
Sections 3.14, 3.15, or 3.16 ever apply to a Lender, then such Lender shall, to
the extent possible, carry or transfer its Borrowings at, to, or for the account
of any of its branch offices or the office or branch of any of its Affiliates so
long as the transfer is consistent with the other provisions of this Section,
does not create any burden or adverse circumstance for such Lender that would
not otherwise exist, and eliminates or ameliorates the conditions of Sections
3.14, 3.15, or 3.16 as applicable.
3.14 Increased Costs and Reduced Return.
(a) Change in Laws. If, after the date hereof, the adoption of any
applicable Governmental Requirement, or any change in any applicable
Governmental Requirement, or any change in the interpretation or administration
thereof by any Governmental Authority charged with the interpretation or
administration thereof, or compliance by any Lender (or its Applicable Lending
Office) with any
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request or directive (whether or not having the force of law) of any such
Governmental Authority:
(i) shall subject such Lender (or its Applicable Lending
Office) to any tax, duty, or other charge with respect to any
Eurodollar Borrowing, its Note, or its obligation to make Eurodollar
Borrowings, or change the basis of taxation of any amounts payable to
such Lender (or its Applicable Lending Office) under this Agreement or
its Note in respect of any Eurodollar Borrowings (other than taxes
imposed on the overall net income of such Lender by the jurisdiction in
which such Lender has its principal office or such Applicable Lending
Office);
(ii) shall impose, modify, or deem applicable any reserve,
special deposit, assessment, or similar requirement (other than the
Reserve Requirement utilized in the determination of the Adjusted
Eurodollar Rate) relating to any extensions of credit or other assets
of, or any deposits with or other liabilities or commitments of, such
Lender (or its Applicable Lending Office), including the Commitment of
such Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable Lending
Office) or the London interbank market any other condition affecting
this Agreement or its Note or any of such extensions of credit or
liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, Converting into, Continuing, or
maintaining any Eurodollar Borrowings or to reduce any sum received or
receivable by such Lender (or its Applicable Lending Office) under this
Agreement or its Note with respect to any Eurodollar Borrowings, then Borrower
shall pay to such Lender on demand such amount or amounts as such Lender
reasonably determines will compensate such Lender for such increased cost or
reduction. If any Lender requests compensation by Borrower under this Section
3.14, then Borrower may, by notice to such Lender (with a copy to Agent),
suspend the obligation of such Lender to make or Continue Eurodollar Borrowings,
or Convert all Eurodollar Borrowings into Base Rate Borrowings, until the event
or condition giving rise to such request ceases to be in effect (in which case
the provisions of Section 3.17 shall be applicable); provided that such
suspension shall not affect the Right of such Lender to receive the compensation
so requested.
(b) Capital Adequacy. If, after the date hereof, any Lender shall have
determined that the adoption of any applicable Governmental Requirement
regarding capital adequacy or any change therein or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof, or any request or directive regarding
capital adequacy (whether or not having the force of law) of any such
Governmental Authority, has or would
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have the effect of reducing the rate of return on the capital of such Lender or
any corporation controlling such Lender as a consequence of such Lender's
obligations hereunder to a level below that which such Lender or such
corporation could have achieved but for such adoption, change, request, or
directive (taking into consideration its policies with respect to capital
adequacy), then from time to time upon demand Borrower shall pay to such Lender
such additional amount or amounts as will compensate such Lender for such
reduction.
(c) Notice. Each Lender shall promptly notify Borrower and Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Lender to compensation pursuant to this Section and will designate
a different Applicable Lending Office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the judgment of
such Lender, be otherwise disadvantageous to it. Any Lender claiming
compensation under this Section shall furnish to Borrower and Agent a statement
setting forth the additional amount or amounts to be paid to it hereunder which
shall be conclusive in the absence of manifest error. In determining such
amount, such Lender may use any reasonable averaging and attribution methods.
3.15 Limitation on Types of Borrowings. If on or prior to the first
(1st) day of any Interest Period for any Eurodollar Borrowing:
(a) Agent determines (which determination shall be conclusive) that by
reason of circumstances affecting the relevant market, adequate and reasonable
means do not exist for ascertaining the Eurodollar Rate for such Interest
Period; or
(b) the Required Lenders determine (which determination shall be
conclusive) and notify Agent that the Adjusted Eurodollar Rate will not
adequately and fairly reflect the cost to Lenders of funding Eurodollar
Borrowings for such Interest Period;
then Agent shall give Borrower prompt notice thereof specifying the relevant
amounts or periods, and so long as such condition remains in effect, Lenders
shall be under no obligation to make additional Eurodollar Borrowings, Continue
any Eurodollar Borrowings, or to Convert any Base Rate Borrowings to Eurodollar
Borrowings and Borrower shall, on the last day(s) of the then-current Interest
Period(s) for the outstanding Eurodollar Borrowings, either prepay such
Borrowings or Convert such Borrowings into Base Rate Borrowings in accordance
with the terms of this Agreement.
3.16 Illegality. Notwithstanding any other provision of this Agreement,
in the event that it becomes unlawful for any Lender or its Applicable Lending
Office to make, maintain, or fund Eurodollar Borrowings hereunder, then such
Lender shall promptly notify Agent and Borrower thereof and such Lender's
obligation to make or Continue Eurodollar Borrowings and to Convert Base Rate
Borrowings into
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Eurodollar Borrowings shall be suspended until such time as such Lender may
again make, maintain, and fund Eurodollar Borrowings (in which case the
provisions of Section 3.17 shall be applicable).
3.17 Treatment of Affected Loans. If the obligation of any Lender to
make or Continue Eurodollar Borrowings or to Convert Base Rate Borrowings into
Eurodollar Borrowings shall be suspended pursuant to Sections 3.14, 3.15, or
3.16, such Lender's Eurodollar Borrowings shall be automatically Converted into
Base Rate Borrowings on the last day(s) of the then current Interest Period(s)
for all Eurodollar Borrowings (or, in the case of a Conversion required by
Section 3.16, on such earlier date as such Lender may specify to Borrower with a
copy to Agent) and, unless and until such Lender gives notice as provided below
that the circumstances specified in Sections 3.14, 3.15, or 3.16 that gave rise
to such Conversion no longer exist:
(a) to the extent that such Lender's Eurodollar Borrowings have been so
Converted, all payments and prepayments of principal that would otherwise be
applied to such Lender's Eurodollar Borrowings shall be applied instead to its
Base Rate Borrowings; and
(b) all Borrowings that would otherwise be made or Continued by such
Lender as Eurodollar Borrowings shall be made or Continued instead as Base Rate
Borrowings, and all Borrowings of such Lender that would otherwise be Converted
into Eurodollar Borrowings shall be Converted instead into (or shall remain as)
Base Rate Borrowings.
If such Lender gives notice to Borrower (with a copy to Agent) that the
circumstances specified in Sections 3.14, 3.15, or 3.16 that gave rise to the
Conversion of such Lender's Eurodollar Borrowings pursuant to this Section 3.17
no longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Eurodollar Borrowings made by other Lenders are
outstanding, such Lender's Base Rate Borrowings shall be automatically
Converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding Eurodollar Borrowings, to the extent necessary so that, after
giving effect thereto, all Eurodollar Borrowings held by Lenders are held Pro
Rata (as to principal amounts, Types, and Interest Periods).
3.18 Compensation. Upon the request of any Lender, Borrower shall pay
to such Lender such amount or amounts as shall be sufficient (in the reasonable
opinion of such Lender) to compensate it for any loss, cost, or expense (herein
called a "Funding Loss") incurred by it as a result of:
(a) any payment, prepayment, or Conversion of a Eurodollar Borrowing
for any reason (including, without limitation, the acceleration of the
Obligation pursuant to Section 11.1) on a date other than the last day of the
Interest Period for such Borrowing; or
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(b) any failure by Borrower for any reason (including, without
limitation, the failure of any condition precedent specified in Section 5 to be
satisfied) to borrow, Convert, Continue, or prepay a Eurodollar Borrowing on the
date for such borrowing, Conversion, Continuation, or prepayment specified in
the relevant Borrowing Notice.
A Funding Loss shall include, without limitation, an amount equal to the excess,
if any, of (i) the amount of interest which otherwise would have accrued on the
principal amount so paid, Converted, or not borrowed, Converted, or Continued
for the period from the date of such payment, Conversion, or failure to borrow,
Convert, or Continue to the last day of the Interest Period for such Eurodollar
Borrowing (or, in the case of a failure to borrow, Convert, or Continue, the
Interest Period for such Eurodollar Borrowing which would have commenced on the
date specified for such Borrowing) at the applicable rate of interest for such
Eurodollar Borrowing provided for in this Agreement over (ii) the interest
component of the amount such Lender would have bid in the London interbank
market for Dollar deposits of leading banks and amounts comparable to such
principal amount and with maturities comparable to such period.
3.19 Taxes.
(a) Any and all payments by Borrower to or for the account of any
Lender or Agent hereunder or under any other Loan Document shall be made free
and clear of and without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each Lender and
Agent, taxes imposed on its income, net receipts, gross income, gross receipts,
and franchise taxes imposed on it, by the jurisdiction under the laws of which
such Lender (or its Applicable Lending Office) or Agent (as the case may be) is
organized or any political subdivision thereof (all such non-excluded taxes,
duties, levies, imposts, deductions, charges, withholdings, and liabilities
being hereinafter referred to as "Taxes"). If Borrower shall be required by law
to deduct any Taxes from or in respect of any sum payable under this Agreement
or any other Loan Document to any Lender or Agent, then (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
3.19) such Lender or Agent receives an amount equal to the sum it would have
received had no such deductions been made, (ii) Borrower shall make such
deductions, (iii) Borrower shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law, and
(iv) Borrower shall furnish to Agent, at its address referred to in Section
13.3, the original or a certified copy of a receipt evidencing payment thereof.
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(b) In addition, Borrower agrees to pay any and all present or future
stamp or documentary taxes and any other excise or property taxes or charges or
similar levies which arise from any payment made under this Agreement or any
other Loan Document or from the execution or delivery of, or otherwise with
respect to, this Agreement or any other Loan Document (hereinafter referred to
as "Other Taxes").
(c) Borrower agrees to indemnify each Lender and Agent for the full
amount of Taxes and Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this Section 3.19) paid by such Lender or Agent (as the case may be) and any
liability (including penalties, interest, and expenses) arising therefrom or
with respect thereto.
(d) Each Lender organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Lender listed on the signature pages hereof and on
or prior to the date on which it becomes a Lender in the case of each other
Lender, and from time to time thereafter if requested in writing by Borrower or
Agent (but only so long as such Lender remains lawfully able to do so), shall
provide Borrower and Agent with (i) Internal Revenue Service Form 1001 or 4224,
as appropriate, or any successor form prescribed by the Internal Revenue
Service, certifying that such Lender is entitled to benefits under an income tax
treaty to which the United States is a party which reduces the rate of
withholding tax on payments of interest or certifying that the income receivable
pursuant to this Agreement is effectively connected with the conduct of a trade
or business in the United States, (ii) Internal Revenue Service Form W-8 or W-9,
as appropriate, or any successor form prescribed by the Internal Revenue
Service, and (iii) any other form or certificate required by any taxing
authority (including any certificate required by Sections 871(h) and 881(c) of
the Code), certifying that such Lender is entitled to an exemption from or a
reduced rate of tax on payments pursuant to this Agreement or any of the other
Loan Documents.
(e) For any period with respect to which a Lender has failed to provide
Borrower and Agent with the appropriate form pursuant to Section 3.19(d) (unless
such failure is due to a change in treaty, law, or regulation occurring
subsequent to the date on which a form originally was required to be provided),
such Lender shall not be entitled to indemnification under Section 3.19(a) or
(b) with respect to Taxes imposed by the United States; provided, however, that
should a Lender, which is otherwise exempt from or subject to a reduced rate of
withholding tax, become subject to Taxes because of its failure to deliver a
form required hereunder, at such Lender's expense, Borrower shall take such
steps as such Lender shall reasonably request to assist such Lender to recover
such Taxes.
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(f) If Borrower is required to pay additional amounts to or for the
account of any Lender pursuant to this Section 3.19, then such Lender will agree
to use reasonable efforts to change the jurisdiction of its Applicable Lending
Office so as to eliminate or reduce any such additional payment which may
thereafter accrue if such change, in the judgment of such Lender, is not
otherwise disadvantageous to such Lender.
(g) Without prejudice to the survival of any other agreement of
Borrower hereunder, the agreements and obligations of Borrower contained in this
Section 3.19 shall survive the termination of the Total Commitments and the
payment in full of the Notes.
3.20 Fees.
(a) Treatment of Fees. The fees described in this Section 3.20 (i) are
not compensation for the use, detention, or forbearance of money, (ii) are in
addition to, and not in lieu of, interest and expenses otherwise described in
this Agreement, (iii) are payable in accordance with Section 3.1(b), (iv) are
non-refundable, (v) to the fullest extent permitted by applicable law, bear
interest, if not paid when due, at the Default Rate, and (vi) are calculated on
the basis of actual number of days (including the first day but excluding the
last day) elapsed, but computed as if each calendar year consisted of 360 days
and 30-day months, unless computation would result in an interest rate in excess
of the Maximum Rate in which event the computation is made on the basis of
actual days elapsed and a year of 365 or 366 days, as the case may be. The fees
described in this Section 3.20 are in all events subject to the provisions of
Section 3.8.
(b) Agent Fees. Borrower shall pay to Agent, the fees specified in the
letter agreement between Agent and Borrower, which fee shall be for the account
of Agent and for the account of Lenders as shall be agreed between Agent and
each Lender.
(c) Lenders' Fees. Borrower shall pay to Agent, for the ratable account
of Lenders, a quarterly unused fee (prorated for partial quarters) equal to the
sum of the amounts obtained by multiplying the average Unused Commitment times
the applicable percentage set forth below:
Unused Commitment Applicable Percentage
----------------- ---------------------
Greater than or equal to $75,000,000 .25%
Less than $75,000,000 .20%
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Such commitment fee shall accrue commencing on the Closing Date, and shall be
due and payable on the first day of each January, April, July, and October
during the term hereof, commencing on April 1, 1999, and on the Termination
Date, based upon the Unused Commitment for each day during the quarter ending on
such date. Solely for purposes of this Section 3.20(c), "ratable" means, for any
calculation period, with respect to any Lender, the proportion that (A) the
average daily Unused Commitment of such Lender during the period bears to (B)
the aggregate amount of the average daily Unused Commitment of all Lenders
during the period.
(d) LC Fees. As an inducement for the issuance (including, without
limitation, the extension) of each LC, Borrower agrees to pay to Agent:
(i) For the ratable account of each Lender, on the first day
of each calendar month, an issuance fee, payable monthly in arrears,
equal to the greater of (A) the product of (A) the average face amount
of such LC during each applicable monthly period times (B) the
Applicable Margin for Eurodollar Borrowings minus .125%; and
(ii) For the account of Issuing Bank, payable on the date of
issuance, an issuance fee, the product of (A) the face amount of such
LC times (B) .125% per annum.
3.21 Loan Documents. Borrower shall pay and perform, or cause to be
paid and performed, the indebtedness, obligations, and duties of each Subsidiary
Guarantor under each Mortgage and each Assignment of Leases and Rents. Borrower
hereby irrevocably and unconditionally agrees: (i) that it is jointly and
severally liable to the Credit Parties for the full and prompt payment of the
indebtedness of each Subsidiary Guarantor to the Credit Parties and the
performance by each Subsidiary Guarantor of its obligations and duties under the
applicable Mortgage and the Assignment of Leases and Rents; and (ii) has a
primary obligation to indemnify each Credit Party on demand from and against any
loss (excluding losses arising out of the fraud, gross negligence, or willful
misconduct of such Credit Party) incurred by such Credit Party as a result of
any of the obligations of any one or more Subsidiary Guarantors being or
becoming void, voidable, unenforceable, or ineffective for any reason
whatsoever, whether or not known to any Credit Party or any Person, the amount
of such loss (excluding losses arising out of the fraud, gross negligence, or
willful misconduct of such Credit Party) being the amount which the Credit
Parties would otherwise have been entitled to recover from any one or more
Subsidiary Guarantors.
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SECTION 4
BORROWING BASE
4.1 Calculation of Borrowing Base.
(a) The "Individual Borrowing Base" for any Borrowing Base Property
shall be, as of any date, the lesser of:
(i) sixty percent (60%) of the Appraised Value; and
(ii) the lesser of: (A) Adjusted NOI of such Borrowing Base
Property divided by the product of (x) the Fixed Constant, and (y) 1.5;
and (B) Adjusted NOI of such Borrowing Base Property divided by the
product of (aa) the Variable Constant, and (bb) 1.5.
(b) The "Borrowing Base" shall be, as of any date, the sum of the
Individual Borrowing Bases for each of the Borrowing Base Properties.
4.2 Admission of Qualified Properties Into the Borrowing Base.
(a) Request for Admission Into Borrowing Base. Borrower shall provide
Agent (with copies for each of Lenders) with a written request for a Property to
be admitted into the Borrowing Base. Such request shall be accompanied by
information regarding such Property (collectively, the "Property Information"),
including, without limitation, the following:
(i) a general description of the Property's location, market,
and amenities;
(ii) a property description;
(iii) purchase information (including any contracts of sale
and closing statements);
(iv) original and two (2) copies of a recent survey with
appropriate certifications to Agent, for the benefit of Lenders, and
one (1) copy for each of the other Lenders;
(v) a Phase I environmental assessment and, if requested by
Agent based upon issues identified in the Phase I assessment,
additional environmental assessments;
(vi) copies of title insurance and a mortgagee commitment of
title insurance, with copies of all underlying title documents, in
which a title company acceptable to Agent commits to ensure Agent's
proposed first lien, for the benefit of Lenders, under a deed of trust
or mortgage;
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(vii) operating statements as necessary to determine the
Appraised Value of the Property, if required by Agent;
(viii) engineering reports (including, without limitation, a
structural engineering report);
(ix) evidence of insurance, including, without limitation,
hazard insurance;
(x) copies of all tenant leases, if any;
(xi) copies of all recent appraisals, if any;
(xii) a Required Appraisal;
(xiii) a current, accurate rent roll in a format acceptable to
Agent;
(xiv) history of the operation of the Property as may be
reasonably requested by Agent;
(xv) lease abstracts for each lease of the Property;
(xvi) three year projected capital expenditures; and
(xvii) such other information reasonably requested by Agent as
shall be necessary to determine whether such Property is a Qualified
Property.
(b) Qualified Properties. In order for a Property to be eligible for
inclusion in the Borrowing Base (a "Qualified Property"), such Property shall
have the following characteristics:
(i) Borrower or a Subsidiary Guarantor shall have good and
indefeasible fee simple title to such Property, free and clear of all
Liens (except for Permitted Liens);
(ii) all Property Information shall be acceptable to Agent;
(iii) if the Phase I environmental assessment indicates a
material defect, then (A) the cost to repair such defect shall not be
in excess of twenty percent (20%) of the cost of acquiring the
Property, (B) the defect must be clearly defined in the Phase I, or if
necessary, the Phase II, environmental report and an acceptable
remedial budget must be attached thereto, and (C) a Borrower must
provide satisfactory evidence that it has funds to mitigate such
defect;
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(iv) if the structural engineering report indicates a material
defect, then (A) the cost to repair such defect shall not be in excess
of twenty percent (20%) of the cost of acquiring the Property, (B) the
defect must be clearly defined in the structural engineering report and
an acceptable remedial budget must be attached thereto, and (C) a
Borrower must provide satisfactory evidence that it has funds to
mitigate such defect);
(v) no Material Title Defects shall exist;
(vi) such Property, if admitted to the Borrowing Base, shall
account for no more than fifteen percent (15%) of the Borrowing Base;
(vii) the admission of such Property will not cause the NRA or
the Adjusted NOI of the Borrowing Base Properties in any one state
(except Ohio) to exceed twenty-five percent (25%) of the NRA or
Adjusted NOI with respect to all Borrowing Base Properties in all
states; provided that no Property in Ohio not listed as an Initial
Property or a Second Property shall be eligible for inclusion as a
Borrowing Base Property unless, following such addition to the
Borrowing Base, the foregoing test shall also be met with respect to
Ohio;
(viii) the admission of such Property will not cause the
leases that could reasonably be expected to contribute in excess of
twenty-five percent (25%) of the annual aggregate NRA for all Borrowing
Base Properties to expire in any one year;
(ix) such Property shall be at least eighty percent (80%)
leased and occupied by the tenants named in the applicable leases;
(x) no more than sixty percent (60%) of the tenant leases for
such Property (which percentage shall be calculated based upon rent
contributed by each such lease) shall expire prior to the date two (2)
years after such Property becomes a Borrowing Base Property; or
(xi) the inclusion of the Property into the Borrowing Base
shall not breach any obligation of an Obligor under any other third
party agreements.
(c) Approval. Each Property that is a Qualified Property shall be
subject to the approval of Agent for admission to the Borrowing Base.
Notwithstanding the foregoing sentence, Required Lenders shall have the Right to
exclude a Property that is a Qualified Property from the Borrowing Base, if
Required Lenders, in their sole discretion, determine that such Qualified
Property shall not be included in the Borrowing Base. If Borrower requests that
a Property that is not a
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Qualified Property be placed in the Borrowing Base and if Agent approves such
Property, then such Property may be admitted to the Borrowing Base upon the
approval of Required Lenders. Agent shall provide Borrower with written notice
of whether a Property is approved for admission into the Borrowing Base within
ten (10) Business Days after Agent's receipt of the applicable Required
Appraisal.
(d) Collateral Documents. A Property shall not be admitted into the
Borrowing Base until Borrower or the appropriate Subsidiary Guarantor shall have
executed and delivered to the Agent, for the ratable benefit of the Lenders, the
Collateral Documents covering such Property, and the Agent shall have a
perfected first priority Lien in such Property, for the ratable benefit of the
Lenders.
(e) Other Requirements Respecting the Borrowing Base. During the term
hereof:
(i) once six (6) Properties have been admitted into the
Borrowing Base, at least six (6) Borrowing Base Properties shall be in
the Borrowing Base;
(ii) once six (6) Properties have been admitted into the
Borrowing Base, the Adjusted NOI of all Borrowing Base Properties
divided by 9.5% shall not be less than $25,000,000;
(iii) the percentage of Borrowing Base Properties that are
office Properties shall not exceed twenty percent (20%) of the net
rentable area of the Borrowing Base Properties;
(iv) the percentage of Borrowing Base Properties that are not
industrial, light industrial, or office Properties shall not exceed ten
percent (10%) of the net rentable area of the Borrowing Base
Properties; and
(v) the principal balance of the Obligation shall not be less
than $1.00, in each case, unless otherwise consented to by Required
Lenders.
(f) Computation of Adjusted Net Operating Income. Borrower shall
deliver to Agent quarterly computations of Adjusted NOI with the Borrowing Base
Report required pursuant to Section 7.1(c). Agent shall notify Borrower in
writing of any additional adjustments to Adjusted NOI required by Agent and
corresponding adjustments to the Borrowing Base (if any). If a Property is
admitted into the Borrowing Base prior to the last day of any fiscal quarter
during the term of this Agreement, then Agent shall notify Borrower and Lenders
in writing of any changes to the Borrowing Base as a result of the admission of
such Property into the Borrowing Base.
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(g) Certain Events With Respect to Borrowing Base Properties. If any
Borrowing Base Property that was a Qualified Property at the time of its
admission into the Borrowing Base no longer satisfies the requirements set forth
in Section 4.2(b), then Required Lenders shall have the right in their sole
discretion at any time and from time to time to notify Borrower that, effective
upon the giving of such notice, and for so long as such event or condition
exists, such Borrowing Base Property shall no longer be considered a Borrowing
Base Property for purposes of determining the Borrowing Base. If Agent delivers
a notice with respect to a Borrowing Base Property as set forth in this SECTION,
then at such time as such Borrowing Base Property is no longer subject to any of
the conditions described above, Borrower may give Agent written notice thereof
(together with reasonably detailed evidence of the cure of such condition) and
such Borrowing Base Property shall, effective with the delivery by Borrower of
the next Borrowing Base Report, be considered a Borrowing Base Property for
purposes of calculating the Borrowing Base until such time as any of the
conditions set forth above apply thereto.
(h) Initial Borrowing Base Properties. As of the Closing Date, the
Properties listed on Schedule 4.2 (collectively, the "Initial Borrowing Base
Properties") are Qualified Properties, have been admitted into the Borrowing
Base, and are Borrowing Base Properties as of the Closing Date.
(i) Second Properties. On or before the date that is thirty (30) days
after the Closing Date, all Property Information regarding the Properties listed
on Schedule 4.2(i) (collectively, the "Second Properties") shall be submitted
pursuant to Section 4.2(a). On or before the date that is ninety (90) days after
the Closing Date, the Second Properties that have been approved for admission
into the Borrowing Base shall be admitted into the Borrowing Base (collectively,
the "Second Borrowing Base Properties").
4.3 Liens on Borrowing Base Properties. As more fully described in the
Collateral Documents, Borrower shall, and shall cause each Obligor to, grant to
Agent, for the benefit of Credit Parties, as security for the payment and
performance of the Obligation, a valid, enforceable, perfected, first priority
and (except for Permitted Liens) only Lien in and to each Borrowing Base
Property.
4.4 Collateral Documents. The Liens described in Section 4.3 shall be
granted pursuant to, and more fully described in, the Collateral Documents.
4.5 Leases.
(a) Unless Agent shall give Borrower written notice pursuant to Section
4.5(b), Borrower may (without the prior consent of Agent) execute leases
covering all or any portion of a Borrowing Base
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Property after the date of this Agreement so long as such leases (i) are on
forms that are customary and consistent with industrial or light industrial
properties, and (ii) have provisions that provide for the same basic terms as
Sections 5.1.2, 12.1, and 13.2 in the form of the Approved Lease Form. Borrower
may (without the prior consent of Agent) enter into renewal, extension, or
expansion agreements (which agreements shall be customary and consistent with
industrial, light industrial, or office properties) with tenants under leases
existing as of the date of admission of such Borrowing Base Property covering
all or any portion of a Borrowing Base Property; provided, however, that if
Agent shall determine, after an annual review of leasing activities by Borrower,
that Borrower has engaged in significant leasing activities with respect to any
Borrowing Base Property wherein the same basic terms as Sections 5.1.2, 12.1,
and 13.2 in the Approved Lease Form have not been included, which in the sole
discretion of Agent results in a Material Adverse Effect on the value of the
Borrowing Base Property as Collateral hereunder, then Agent may, in its sole
discretion, notify Borrower on or before October 1 of each year during the term
of this Agreement that its has elected to remove such Borrowing Base Property
from the Borrowing Base (a "Removal Notice"). If Agent shall have delivered a
Removal Notice to Borrower, then Borrower may, on or before the immediately
admission into the Borrowing Base, or (b) if necessary, prepay the excess of the
Total Principal Debt over the Borrowing Base. Notwithstanding the foregoing,
Borrower may (without the prior consent of Agent) execute agreements covering a
Borrowing Base Property pursuant to renewal, extension, or expansion options set
forth in leases existing as of the date of admission into the Borrowing Base,
provided that the terms and conditions of such renewal agreements do not
materially differ from the terms and conditions of the leases renewed or
extended thereby. If Agent delivers a Removal Notice, then at such time as such
Borrowing Base Property is no longer subject to any of the conditions described
above, Borrower may give Agent written notice thereof (together with reasonably
detailed evidence of the cure of such condition) and such Borrowing Base
Property shall, effective with the delivery by Borrower of the next Borrowing
Base Report, be reinstated as a Borrowing Base Property.
(b) If Agent shall have given Borrower written notice (which notice may
be delivered in Agent's sole discretion), then unless otherwise consented to by
Agent in writing, all leases covering all or any portion of a Borrowing Base
Property entered into after the date of such notice (i) shall be in
substantially the form of the Approved Lease Form, (ii) shall have no material
changes to Sections 5.1.2, 12.1, and 13.2 in the Approved Lease Form, (iii)
shall be for terms not less than three (3) years, and (iv) may include other
provisions specifically approved in writing by Agent or in other lease
guidelines agreed to by Agent in writing from time to time.
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(c) Unless otherwise consented to by Agent in writing, all leases
covering all or any portion of a Borrowing Base Property entered into after the
date of this Agreement shall (i) be to third parties under market terms and,
except as provided in (b) above, for primary terms not less than three (3)
years, (ii) provide for uses and percentages that are consistent with Section
8.5, (iii) not provide for uses of the premises that would materially and
adversely affect the fair market value of the Borrowing Base Property or its
ability to qualify for permanent financing, and (iv) not include tenant
self-help remedies or provide for Agent's or any subsequent mortgagee's
non-disturbance of any tenant's occupancy.
(d) Borrower shall send to Agent copies of all leases (and all
renewals, extension, or modifications thereof) covering all or any portion of a
Borrowing Base Property entered into after the date of this Agreement within
thirty (30) days after the last day of each fiscal quarter immediately following
the execution thereof.
4.6 Releases of Collateral. Agent shall have no obligation to release
any Collateral without a written request from Borrower, together with a
Borrowing Base Report and a Compliance Certificate as of the date of such
request. Agent shall not release any Collateral unless, after giving effect to
any such release (a) no Default or Potential Default exists, (b) the Borrowing
Base exceeds the Obligation as of the date of such release, and (c) unless
waived by Required Lenders, continue to satisfy all of the items and
requirements set forth in Section 4.2(b) and Section 4.2(e). Agent shall not be
required to partially release a portion of a Borrowing Base Property pursuant to
this Section.
4.7 Appraisals. From time to time, Agent may obtain, at its option and
at Borrower's expense but not more often than one (1) time during any calendar
year unless a Default exists, a Material Adverse Event has occurred, or an
appraisal is required more often under any Governmental Requirement, an
appraisal of a Borrowing Base Property or any part thereof prepared in
accordance with written instructions from Agent by a third-party appraiser
engaged directly by Agent. Each such appraiser and appraisal shall be
satisfactory to Agent.
SECTION 5
CONDITIONS PRECEDENT
5.1 Conditions to Initial Borrowing. The obligations of Lenders to make
the initial Borrowing and of Issuing Bank to issue the initial LC is subject to
satisfaction of the following conditions precedent on or before the Closing
Date:
(a) Borrower Documents. Borrower shall deliver or cause to be delivered
to Agent the following, each, unless otherwise noted, dated as of the Closing
Date:
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(i) Certified copies of its Declaration of Trust, together
with a good standing certificate, if available, from the Secretary of
State of the State of Texas and each other state in which it is
qualified to do business and a certificate or other evidence of good
standing as to payment of any applicable franchise or similar taxes
from the appropriate taxing authority of each of such states, each
dated a recent date prior to the Closing Date;
(ii) An Officer's Certificate of Borrower certifying (A) its
Constituent Documents, (B) resolutions of its trustees approving and
authorizing the execution, delivery, and performance of this Agreement
and the other Loan Documents, certified as of the Closing Date as being
in full force and effect without modification or amendment, and (C)
signatures and incumbency of its officers executing this Agreement and
the other Loan Documents;
(iii) Executed originals of this Agreement, the Notes, and the
other Loan Documents to be executed by Borrower; and
(iv) Such other documents as any Agent may reasonably request.
(b) Opinions of Counsel. The Credit Parties and their respective
counsel shall have received originally executed copies of a favorable written
opinions of counsel for Borrower and/or Obligors, in form and substance
reasonably satisfactory to Agent and its counsel, dated as of the Closing Date,
and setting forth substantially the matters in the opinions designated in
Exhibit F-1 and Exhibit F-2 and as to such other matters as any Agent, acting on
behalf of the Credit Parties, may reasonably request.
(c) Fees. Borrower shall have paid to Agent, for distribution (as
appropriate) to the Credit Parties, the fees payable on the Closing Date
referred to in Section 3.20.
(d) Borrowing Base Report. Borrower shall have delivered an Borrowing
Base Report dated as of the Closing Date.
(e) Completion of Proceedings. All corporate, trust, and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by any Agent, acting on behalf of Lenders, and its counsel shall be
satisfactory in form and substance to Agent and its counsel, and Agent and its
counsel shall have received all such counterpart originals or certified copies
of such documents as Agent may reasonably request.
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(f) No Material Adverse Event. No Material Adverse Event has occurred
since September 30, 1998.
(g) Initial Borrowing Base Properties. The Initial Borrowing Base
Properties shall be admitted to the Borrowing Base, subject to the terms and
conditions of this Credit Agreement.
(h) Subsidiary Guarantor Documents. Borrower shall deliver or cause to
be delivered to Agent the following regarding the Subsidiary Guarantors, each,
unless otherwise noted, dated as of the Closing Date:
(i) if a partnership or limited partnership, certified copies
of each Subsidiary Guarantor's certificate of partnership, together
with a good standing certificate from the applicable jurisdiction of
formation and each other state in which it is qualified to do business,
and a certificate or other evidence of good standing as to payment of
any applicable franchise or similar taxes from the appropriate taxing
authority of each of such states, each dated a recent date prior to the
Closing Date;
(ii) if a partnership or limited partnership, certified copies
of each Subsidiary Guarantor's general partner's certificate of
incorporation, together with a good standing certificate from such
general partner's jurisdiction of incorporation and each other state in
which it is qualified to do business, and, to the extent generally
available, a certificate or other evidence of good standing as to
payment of any applicable franchise or similar taxes from the
appropriate taxing authority of each of such states, each dated a
recent date prior to the Closing Date;
(iii) if a corporation, certified copies of each Subsidiary
Guarantor's certificate of incorporation, together with a good standing
certificate from such Subsidiary Guarantor's jurisdiction of
incorporation and each other state in which it is qualified to do
business, and, to the extent generally available, a certificate or
other evidence of good standing as to payment of any applicable
franchise or similar taxes from the appropriate taxing authority of
each of such states, each dated a recent date prior to the Closing
Date;
(iv) if a partnership or limited partnership, an Officer's
Certificate of its general partner certifying (A) its Constituent
Documents, (B) resolutions of its Board of Directors approving and
authorizing the execution, delivery, and performance of the Loan
Documents to which it is a party, certified as of the Closing Date as
being in full force and effect without modification or amendment, (C)
signatures and incumbency of its officers executing the Loan Documents
to which it is a party, and (D) the Constituent Documents of the
applicable Subsidiary Guarantor;
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(v) if a corporation, an Officer's Certificate of the
Subsidiary Guarantor certifying (A) its Constituent Documents, (B)
resolutions of its Board of Directors approving and authorizing the
execution, delivery, and performance of the Loan Documents to which it
is a party, certified as of the Closing Date as being in full force and
effect without modification or amendment, (C) signatures and incumbency
of its officers executing the Loan Documents to which it is a party,
and (D) the Constituent Documents of such Subsidiary Guarantor;
(vi) Executed originals of this Agreement, the Notes, and the
other Loan Documents to be executed by the Subsidiary Guarantor; and
(vii) Such other documents as any Agent may reasonably
request.
5.2 Conditions to all Borrowings. The obligations of each Lender on
each Borrowing Date to make all Borrowings (including the initial Borrowing) and
Issuing Bank to issue all LCs (including the initial LC) are subject to the
following conditions precedent:
(a) Notice of Borrowing; LC Request. Agent shall have received, (i) in
the case of a Borrowing, in accordance with the provisions of Section 2.2, an
originally executed Borrowing Request, and (b) in the case of an LC, in
accordance with Section 2.3, an LC Request.
(b) Representations and Warranties; Performance of Agreements. The
representations and warranties in Loan Documents are true, correct, and complete
in all material respects (unless they speak to a specific date or are based on
facts which have changed by transactions expressly contemplated or permitted by
this Agreement).
(c) No Default. No Potential Default, Default, Non-Compliance Event, or
Material Adverse Event exits or would be caused by the making of such Borrowing.
(d) No Injunction or Restraining Order. No order, judgment, or decree
of any Governmental Authority shall purport to enjoin or restrain such Lender
from making the Borrowing to be made by it.
(e) No Violation. The making of the Borrowing shall not violate any
Governmental Requirement, including, without limitation, Regulation T,
Regulation U, or Regulation X of the Board of Governors of the Federal Reserve
System.
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5.3 Conditions Generally. Each condition precedent in this Agreement is
material to the transactions contemplated by this Agreement, and time is of the
essence with respect to each condition precedent. Lenders may fund any Borrowing
and Issuing Bank may issue any LC without all conditions being satisfied, but,
to the extent permitted by Governmental Requirements, such funding shall not be
deemed to be a waiver of the requirement that each condition precedent be
satisfied as a prerequisite for any subsequent funding or issuance, unless
Lenders specifically waive each item in writing.
SECTION 6
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to the Credit Parties as follows:
6.1 Purpose of Credit Facility. Borrower shall use proceeds of the
Borrowings made and any LCs issued hereunder (i) to acquire industrial and light
industrial and suburban office Properties, (ii) for capital improvements for the
Properties, and (iii) for working capital requirements (but excluding the
repurchase of any Stock of any Company). Borrower is not engaged principally, or
as one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying any "margin stock" within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System, as
amended. No part of the proceeds of any Borrowing or any LC shall be used,
directly or indirectly, for a purpose that violates any Governmental
Requirement, including the provisions of Regulation U.
6.2 Existence, Good Standing, Authority and Compliance. Each Company is
duly formed, validly existing and in good standing under the Governmental
Requirements of the jurisdiction in which it is incorporated or formed as
identified on Schedule 6.2 (as supplemented from time to time). Each Company (a)
is duly qualified to transact business and is in good standing as a foreign
trust, corporation, partnership, limited liability company, or other entity in
each jurisdiction where the nature and extent of its business and properties
require due qualification and good standing, which jurisdictions are identified
on Schedule 6.2 (as supplemented from time to time to reflect changes as a
result of transactions permitted by the Loan Documents), (b) possesses all
requisite authority, permits, and power to conduct its business as is now being,
or is contemplated by this Agreement to be, conducted, and (c) is in compliance
with all applicable Governmental Requirements.
6.3 Affiliates. Borrower has no Consolidated Affiliates or
Unconsolidated Affiliates except as disclosed on Schedule 6.2 (as supplemented
from time to time to reflect changes as a result of transactions permitted by
the Loan Documents).
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6.4 Authorization and Contravention. The execution and delivery by each
Obligor of each Loan Document or related document to which it is a party, and
the performance by it of its obligations thereunder, (a) are within its trust,
corporate, limited liability company, or partnership power, (b) have been duly
authorized by all necessary trust, corporate, limited liability company, or
partnership action of such Person, (c) require no action by or filing with any
Governmental Authority, (d) do not violate any provision of its Constituent
Documents, (e) do not violate any provision of any Governmental Requirement or
order of any Governmental Authority applicable to it, (f) do not violate any
material agreements to which it is a party, or (g) do not result in the creation
or imposition of any Lien on any asset of any Company, other than pursuant to
the Loan Documents.
6.5 Binding Effect. Upon execution and delivery by all parties thereto,
each Loan Document to which it is a party shall constitute a legal and binding
obligation of each Obligor, enforceable against such Obligor in accordance with
its terms, subject to applicable Debtor Relief Laws and general principles of
equity.
6.6 Financial Statements; Fiscal Year. The Current Financials were
prepared in accordance with GAAP and present fairly, in all material respects,
the consolidated financial condition, results of operations, and cash flows of
the Companies as of, and for the portion of the fiscal year ending on the date
or dates thereof (subject only to normal audit adjustments). All material
liabilities of the Companies as of the date or dates of the Current Financials
are reflected therein or in the notes thereto. Except for transactions directly
related to, or specifically contemplated by, the Loan Documents or disclosed in
the Current Financials, no subsequent material adverse changes have occurred in
the consolidated financial condition of the Companies from that shown in the
Current Financials. The fiscal year of each Company ends on December 31.
6.7 Litigation. Except as disclosed on Schedule 6.7, no Company is
subject to, nor is any Responsible Officer of any Company aware of the threat
of, any Litigation that, if adversely determined, could result in a Material
Adverse Event. No outstanding and unpaid final and non-appealable judgments
against any Company exist which could result in a Material Adverse Event.
6.8 Taxes.
(a) All Tax returns of each Company required to be filed have been
filed (or extensions have been granted) before delinquency, and all Taxes
imposed upon each Company that are due and payable have been paid before
delinquency or are being contested in good faith by appropriate proceedings
diligently conducted and for which reserves in accordance with GAAP or otherwise
reasonably acceptable to Agent have been provided.
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(b) As of the date hereof, no United States federal income tax returns
of the "affiliated group" (as defined in the Code) of which any Company is a
member have been examined and closed. The members of such affiliated group have
filed all United States Federal income tax returns and all other material tax
returns which are required to be filed by them and have paid all taxes due
pursuant to such returns or pursuant to any assessment received by or any of
them (except for taxes being contested in good faith by appropriate proceedings
diligently conducted and for which reserves in accordance with GAAP or otherwise
acceptable to Agent have been provided). The charges, accruals, and reserves on
the books of the Companies in respect of taxes or other governmental charges
are, in the opinion of the Companies, adequate.
(c) Borrower qualifies as a REIT.
6.9 Environmental Matters. Except as disclosed on Schedule 6.9, (a) no
environmental condition or circumstance exists that materially and adversely
affects any Company's Properties or operations, (b) no Company has received any
report of any Company's violation of any Environmental Law that has not been
remedied, (c) no Company knows that any Company is under any obligation to
remedy any violation of any Environmental Law, or (d) no facility of any Company
is or has been used for storage, treatment, or disposal of any Hazardous
Substance. Each Company has taken prudent steps to determine that its Properties
and operations do not violate any Environmental Law.
6.10 Employee Plans. Except where occurrence or existence could not
result in a Material Adverse Event, (a) no Employee Plan has incurred an
"accumulated funding deficiency" (as defined in Section 302 of ERISA or Section
412 of the Code), (b) no Company has incurred liability under ERISA to the PBGC
in connection with any Employee Plan (other than required insurance premiums,
all of which have been paid), (c) no Company has withdrawn in whole or in part
from participation in a Multi-employer Plan, (d) no Company has engaged in any
"prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of
the Code), and (e) no "reportable event" (as defined in Section 4043 of ERISA)
has occurred, excluding events for which the notice requirement is waived under
applicable PBGC regulations.
6.11 Properties; Liens. Each Company has good and marketable title to
all of its Properties (notwithstanding the foregoing, for Properties in Texas,
each Company shall have good and indefeasible title) reflected in the Current
Financials (except for any Property that is obsolete or that has been disposed
in the ordinary course of business or, after the date of this Agreement, as
otherwise permitted by Section 8.7 or Section 8.8). Except for Permitted Liens,
no Lien
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exists on any Borrowing Base Property, and the execution, delivery, performance,
or observance of the Loan Documents shall not require or result in the creation
of any Lien on any Borrowing Base Property.
6.12 Locations. Each Company's chief executive office is located at the
address set forth on Schedule 6.2 (as supplemented from time to time). Each
Company's books and records are located at its chief executive office.
6.13 Government Regulations. No Company is subject to regulation under
the Investment Company Act of 1940, as amended, or the Public Utility Holding
Company Act of 1935, as amended.
6.14 Transactions With Affiliates. Except as disclosed on Schedule 6.14
(as supplemented from time to time if the disclosures are approved by Agent), no
Company is a party to a material transaction with any of its Affiliates, other
than transactions in the ordinary course of business and upon fair and
reasonable terms not materially less favorable than it could obtain or could
become entitled to in an arm's-length transaction with a Person that was not its
Affiliate.
6.15 Insurance. Each Company maintains with financially sound,
responsible, and reputable insurance companies or associations (or, as to
workers' compensation or similar insurance, with an insurance fund or by
self-insurance authorized by the jurisdictions in which it operates) insurance
concerning its properties and businesses against casualties and contingencies
and of types and in amounts (and with co-insurance and deductibles) as is
customary in the case of similar businesses.
6.16 Labor Matters. No actual or, to the knowledge of any Responsible
Officer of any Company, threatened strikes, labor disputes, slow downs,
walkouts, or other concerted interruptions of operations by the employees of any
Company exist. All payments due from any Company for employee health and welfare
insurance have been paid or accrued as a liability on its books.
6.17 Solvency. On each Borrowing Date, each Company is, and after
giving effect to the requested Borrowing will be, Solvent.
6.18 Full Disclosure. Each material fact or condition relating to the
financial condition or business of the Companies which could result in a
Material Adverse Event has been disclosed to Agent. All information previously
furnished, furnished on the date of this Agreement, and furnished in the future,
by any Company to Agent in connection with the Loan Documents (a) was, is, and
will be, true and accurate in all material respects or based on good faith
estimates on the date the information is stated or certified, and (b) did not,
does not, and will not, fail to state any material fact the existence of
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which or the omission of which could result in a Material Adverse Event
6.19 Exemption From ERISA; Plan Assets. Borrower is a "real estate
operating company" within the meaning of 29 C.F.R. Section 2510.3-101(e) (or any
successor regulation) and the assets of the Companies would not be deemed "plan
assets" as defined in 29 C.F.R. Section 2510.3-101(a)(1) (or any successor
regulation) of any Employee Plan or Multi-employer Plan.
6.20 Year 2000 Compliance. As of the date of any request for any
Borrowing, as of the date of any renewal, extension or modification of this
Agreement, and at all times during the term of this Agreement:
(a) All devices, systems, machinery, information technology, computer
software and hardware, and other date sensitive technology (jointly and
severally the "Systems") necessary for Obligors to carry on their business as
may be presently conducted and as contemplated to be conducted in the future are
Year 2000 Compliant or will be Year 2000 Compliant within a period of time
calculated to result in no material disruption of any of Obligors' business
operations. "Year 2000 Compliant" means that the Systems are designed to be used
prior to, during, and after the Gregorian calendar year 2000 A.D. and will
operate during each such time period without error relating to date data,
specifically including any error relating to, or the product of, date data which
represents or references different centuries or more than one century.
(b) Obligors have: (i) undertaken a detailed inventory, review, and
assessment of all areas within their business and operations that could be
adversely affected by the failure of Obligors to be Year 2000 Compliant on a
timely basis; (ii) developed a detailed plan and time line for becoming Year
2000 Compliant on a timely basis, and (iii) to date, implemented that plan in
accordance with that timetable in all material respects.
(c) Obligors have made written inquiry of each of its key suppliers,
vendors, and customers, and has obtained in writing confirmations from all such
persons, as to whether such persons have initiated programs to become Year 2000
Compliant and on the basis of such confirmations, Obligors reasonably believe
that all such persons will be or become so compliant. For purposes hereof, "key
suppliers, vendors, and customers" refers to those suppliers, vendors, and
customers of Obligors whose business failure would, with reasonable probability,
result in a material adverse change in the business, properties, condition
(financial or otherwise), or prospects of Obligors. For purposes of this
paragraph, Agent confirms to Obligors that it has initiated a corporate-wide
Year 2000 program with respect to its lending activities.
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(d) The fair market value of all Collateral is not and shall not be
less than currently anticipated or subject to substantial deterioration in value
because of the failure of such Collateral to be Year 2000 Compliant.
6.21 DDR Indebtedness. The aggregate outstanding Indebtedness to DDR of
the Companies as of the Closing Date is $12,100,000 plus interest (collectively,
the "Existing DDR Indebtedness").
6.22 Ownership and Indebtedness. The Consolidated Affiliates listed on
Schedule 6.22 constitute all of Borrower's Consolidated Affiliates as of the
Closing Date and are the owners of the respective Properties listed on Schedule
6.22. Each Consolidated Affiliate except DDR Office Flex II, LLC is indebted to
the respective lender shown on Schedule 6.22 pursuant to Permitted Conduit Debt
which prohibits such Consolidated Affiliate from executing the Subsidiary
Guaranty.
6.23 Ownership of Consolidated Affiliates. Borrower, directly or
indirectly, owns the applicable ownership interest in each Consolidated
Affiliate as shown on Schedule 6.22.
6.24 DDR Equity. As of January 14, 1999, DDR has contributed not less
than $81,000,000 of equity to Borrower.
SECTION 7
AFFIRMATIVE COVENANTS
So long as Lenders are committed to fund any Borrowings or fund or
issue any LCs under this Agreement and until the Obligation is paid in full,
Borrower covenants and agrees as follows:
7.1 Items to be Furnished. Borrower shall cause the following to be
furnished to Agent (with sufficient copies for each Lender):
(a) Annual Financial Statements. Promptly after preparation, and no
later than ninety (90) days after the last day of each fiscal year of the
Companies, consolidated Financial Statements of the Companies showing the
consolidated financial condition and results of operations of the Companies as
of, and for the year ended on, that last day, accompanied by: (A) the
unqualified opinion of the firm of an accounting firm of nationally-recognized
independent certified public accountants, based on an audit using generally
accepted auditing standards, that the Financial Statements of the Companies were
prepared in accordance with GAAP and present fairly, in all material respects,
the consolidated financial condition and results of operations of the Companies
and (B) a Compliance Certificate.
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(b) Periodic Financial Statements. Promptly after preparation, and no
later than forty-five (45) days after the last day of each fiscal quarter of the
Companies: (i) Financial Statements of the Companies showing the consolidated
financial condition and results of operations of the Companies for the fiscal
quarter and for the period from the beginning of the current fiscal year to the
last day of the fiscal quarter; and (ii) a Compliance Certificate.
(c) Borrowing Base Report. Promptly after preparation, and no later
than forty-five (45) days after the end of each fiscal quarter of Borrower and
Subsidiary Guarantor, a Borrowing Base Report certified by a Responsible
Officer, setting forth in reasonable detail the calculations required to
establish the Individual Borrowing Base for each Borrowing Base Property and the
Borrowing Base (the "Borrowing Base Report") as of the last day of such quarter,
all in reasonable detail and satisfactory to the Agent; provided, however, that
any change in the Borrowing Base reflected in such Borrowing Base Report shall
not become effective until Agent notifies Borrower and the Lenders in writing.
(d) Other Reports.
(i) Promptly upon its becoming available, and no later than
fifteen (15) days after the filing or receipt thereof, each regular or
periodic report and any registration statement or prospectus in respect
thereof filed by any Borrower with, or received by any Borrower in
connection therewith from, any securities exchange or the Securities
and Exchange Commission, or any successor agency thereof, including,
without limitation, each Form 10-K, 10-Q, and S-8 filed with the
Securities and Exchange Commission.
(ii) Promptly after the mailing or delivery thereof, copies of
all material reports or other information from any Borrower to holders
of its Stock.
(e) Borrowing Base Property and Other Property Information.
(i) Promptly after the preparation thereof, and no later than
forty-five (45) days after the last day of each fiscal quarter,
quarterly operating statements for each of the Borrowing Base
Properties with rent rolls and leasing status reports for each of the
Borrowing Base Properties.
(ii) Promptly after the preparation thereof, and no later than
the last day of November of the preceding calendar year, capital
expenditure budgets for each of the Borrowing Base Properties.
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(iii) Promptly after the preparation thereof, and no later
than forty-five (45) days after the last day of each fiscal year, a
summary detailing the rent revenues, expenses, Adjusted NOI, for each
of the Properties owned by the Companies as of and for the period then
ended and for the corresponding period in the prior fiscal year.
(f) Notices. Notice, promptly after a Responsible Officer of any
Borrower knows of (i) the existence and status of any Litigation that, if
determined adversely to any Company, could result in a Material Adverse Event,
(ii) any change in any material fact or circumstance represented or warranted by
any Company in any Loan Document which could result in a Material Adverse Event,
(iii) the receipt by any Company of notice of any violation or alleged violation
of ERISA or any Environmental Law, or (iv) a Default or Potential Default,
specifying the nature thereof and what action Borrower has taken, are taking, or
propose to take.
(g) Change in Control. Promptly upon any Change in Control, notice of
such event together with a description of the transaction giving rise thereto.
(h) Other Information. Promptly upon reasonable request by any Agent,
information (not otherwise required to be furnished under the Loan Documents)
respecting the business affairs, assets, and liabilities of the Companies
(including, without limitation, cash flow information, asset business plans,
market information, and tax returns) and opinions, certifications, and documents
in addition to those mentioned in this Agreement.
7.2 Use of Proceeds. Borrower shall use the proceeds of Borrowings only
for the purposes represented in this Agreement.
7.3 Books and Records. Borrower shall, and shall cause each Company to,
maintain books, records, and accounts necessary to prepare all Financial
Statements in accordance with GAAP.
7.4 Inspections. Upon reasonable notice and during normal business
hours, Borrower shall, and shall cause each Company to, allow Agent (or its
Representatives) to inspect any of their respective properties (subject to the
inspection rights in any tenant leases), to review reports, files, and other
records and to make and take away copies with Borrower's permission, such
permission not to be unreasonably withheld), and to discuss in the presence of a
Borrower or such other Company any of its affairs, conditions, and finances with
its other creditors, directors, officers, employees, or representatives from
time to time, during reasonable business hours.
7.5 Taxes. Borrower shall, and shall cause each Company to, promptly
pay prior to delinquency any and all Taxes, other than Taxes that are being
contested in good faith by lawful proceedings
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diligently conducted, against which reserves or other provisions required by
GAAP have been made, and in respect of which levy and execution of any Lien have
been, and continue to be, stayed.
7.6 Payment of Obligations. Borrower shall, and shall cause each
Company to, promptly pay (or renew and extend) all of their respective
obligations as they become due (unless any such obligations are being contested
in good faith by appropriate proceedings and against which reserves or other
provisions required by GAAP have been made).
7.7 Expenses. Borrower shall promptly pay following demand:
(a) all reasonable costs, fees, and expenses paid or incurred by Agent
in connection with the arrangement, syndication, and negotiation of the loan
evidenced by this Agreement and the other Loan Documents and the negotiation,
preparation, delivery, and execution of the Loan Documents and any related
amendment, waiver, or consent (including in each case the reasonable fees and
expenses of any Agent's counsel);
(b) all reasonable costs, fees, and expenses paid or incurred by Agent
in connection with review and addition of Properties for inclusion in the
Borrowing Base, including, without limitation, appraisals, architectural
inspections, environmental consultants, legal fees and expenses, and title,
escrow, and recording fees;
(c) all costs, fees, and expenses of Agent and, after a Default,
Lenders incurred by any Agent or, after a Default, any Lender in connection with
the enforcement of the obligations of Borrower arising under the Loan Documents
or the exercise of any Rights arising under the Loan Documents (including
reasonable attorneys' fees, expenses, and costs paid or incurred in connection
with any workout or restructure and any action taken in connection with any
Debtor Relief Laws).
All of such costs, fees, and expenses shall be a part of the Obligation and
shall bear interest, if not paid within five (5) days following demand, at the
Default Rate until repaid. Without prejudice to the survival of any other
agreement of Borrower hereunder, the agreements and obligations of Borrower
contained in this Section shall survive the payment in full of the Total
Principal Debt and all other amounts payable under this Agreement.
7.8 Maintenance of Existence, Assets, and Business. Each Company shall
(a) maintain its trust, partnership, limited liability company, or corporate
existence in good standing in its state of organization or formation, and (b)
maintain (i) its authority to transact business in good standing in all other
states, (ii) all licenses, permits, franchises, and Governmental Requirements
necessary
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for its business, and (iii) all of its material assets that are useful in and
necessary to its business in good working order and condition (ordinary wear and
tear excepted) and make all necessary repairs and replacements.
7.9 Insurance. Borrower shall, and shall cause each Company to,
maintain with financially sound, responsible, and reputable insurance companies
or associations (or, as to workers' compensation or similar insurance, with an
insurance fund or by self-insurance authorized by the jurisdictions in which it
operates) insurance reasonably acceptable to Agent concerning its properties and
businesses against casualties and contingencies and of types and in amounts (and
with co-insurance and deductibles) as is customary in the case of similar
businesses. At any Agent's request, Borrower shall, and shall cause each Company
to, deliver to Agent evidence of insurance for each policy of insurance and
evidence of payment of all premiums.
7.10 Preservation and Protection of Rights. Borrower shall, and shall
cause each other Company to, perform the acts and duly authorize, execute,
acknowledge, deliver, file, and record any additional writings as any Agent may
reasonably deem necessary or appropriate to preserve and protect the Rights of
the Credit Parties under any Loan Document.
7.11 Environmental laws. Borrower shall, and shall cause each Company
to, (a) operate and manage its businesses and otherwise conduct its affairs in
compliance with all Environmental Laws, (b) promptly deliver to Agent a copy of
any written notice received from any Governmental Authority alleging that any
Company is not in compliance with any Environmental Law, and (c) promptly
deliver to Agent a copy of any written notice received from any Governmental
Authority alleging that any Company has any potential environmental Liability.
7.12 INDEMNIFICATION.
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(a) AS USED IN THIS SECTION: (i) "INDEMNITOR" MEANS BORROWER; (ii)
"INDEMNITEE" MEANS EACH CREDIT PARTY, EACH PRESENT AND FUTURE AFFILIATE OF EACH
CREDIT PARTY, EACH PRESENT AND FUTURE REPRESENTATIVE OF EACH CREDIT PARTY OR ANY
OF SUCH AFFILIATES, AND EACH PRESENT AND FUTURE SUCCESSOR AND ASSIGN OF EACH
CREDIT PARTY OR ANY OF SUCH AFFILIATES OR REPRESENTATIVES; AND (iii)
"INDEMNIFIED LIABILITIES" MEANS ALL PRESENT AND FUTURE, KNOWN AND UNKNOWN, FIXED
AND CONTINGENT, ADMINISTRATIVE, INVESTIGATIVE, JUDICIAL, AND OTHER CLAIMS,
DEMANDS, ACTIONS, CAUSES OF ACTION, INVESTIGATIONS, SUITS, PROCEEDINGS, AMOUNTS
PAID IN SETTLEMENT, DAMAGES, JUDGMENTS, PENALTIES, COURT COSTS, LIABILITIES, AND
OBLIGATIONS -- AND ALL PRESENT AND FUTURE COSTS, EXPENSES, AND DISBURSEMENTS
(INCLUDING, WITHOUT LIMITATION, ALL REASONABLE ATTORNEYS' FEES AND EXPENSES
WHETHER OR NOT SUIT OR OTHER PROCEEDING EXISTS OR ANY INDEMNITEE IS PARTY TO ANY
SUIT OR OTHER PROCEEDING) IN ANY WAY RELATED TO ANY OF THE FOREGOING -- THAT MAY
AT ANY TIME BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST ANY INDEMNITEE AND
IN ANY WAY RELATING TO OR ARISING OUT OF ANY (A) LOAN DOCUMENT, TRANSACTION
CONTEMPLATED BY ANY LOAN DOCUMENT, OR ANY PROPERTY, (B) ENVIRONMENTAL LIABILITY
IN ANY WAY RELATED TO ANY COMPANY, ANY PROPERTY, OR ANY ACT, OMISSION, STATUS,
OWNERSHIP, OR OTHER RELATIONSHIP, CONDITION, OR CIRCUMSTANCE CONTEMPLATED BY,
CREATED UNDER, OR ARISING PURSUANT TO OR IN CONNECTION WITH ANY LOAN DOCUMENT,
OR (C) ANY INDEMNITEE'S SOLE OR CONCURRENT ORDINARY NEGLIGENCE. AS USED IN THIS
SECTION, "ENVIRONMENTAL LIABILITY" MEANS ANY AND ALL LOSSES, CLAIMS, COST
RECOVERY ACTIONS, ADMINISTRATIVE ORDERS OR PROCEEDINGS, DAMAGES, AND LIABILITIES
TO WHICH ANY SUCH PERSON MAY BECOME SUBJECT (I) UNDER ANY ENVIRONMENTAL LAW
APPLICABLE TO ANY OBLIGOR OR ANY OF ITS PROPERTIES, INCLUDING WITHOUT LIMITATION
THE TREATMENT OR DISPOSAL OF HAZARDOUS SUBSTANCES ON ANY OF ITS PROPERTIES AND
RESULTING FROM THE FACT THAT AGENT OR LENDERS ARE A PARTY TO ANY LOAN DOCUMENT,
(II) AS A RESULT OF THE BREACH OR NON-COMPLIANCE BY ANY OBLIGOR WITH ANY
ENVIRONMENTAL LAW APPLICABLE TO SUCH OBLIGOR, (III) DUE TO PAST OWNERSHIP BY ANY
OBLIGOR OF ANY OF ITS PROPERTIES OR PAST ACTIVITY ON ANY OF ITS PROPERTIES THAT,
THOUGH LAWFUL AND FULLY PERMISSIBLE AT THE TIME, COULD RESULT IN PRESENT
LIABILITY, (IV) THE PRESENCE, USE, RELEASE, STORAGE, TREATMENT OR DISPOSAL OF
HAZARDOUS SUBSTANCES ON OR AT ANY OF THE PROPERTIES OWNED OR OPERATED BY ANY
OBLIGOR, OR (V) ANY OTHER ENVIRONMENTAL, HEALTH OR SAFETY CONDITION IN
CONNECTION WITH THE LOAN DOCUMENTS.
(b) EACH INDEMNITOR SHALL JOINTLY AND SEVERALLY INDEMNIFY EACH
INDEMNITEE FROM AND AGAINST, PROTECT AND DEFEND EACH INDEMNITEE FROM AND
AGAINST, HOLD EACH INDEMNITEE HARMLESS FROM AND AGAINST, AND ON DEMAND PAY OR
REIMBURSE EACH INDEMNITEE FOR, ALL INDEMNIFIED LIABILITIES.
(c) THE FOREGOING PROVISIONS (i) ARE NOT LIMITED IN AMOUNT EVEN IF THAT
AMOUNT EXCEEDS THE OBLIGATION, (ii) INCLUDE, WITHOUT LIMITATION, REASONABLE FEES
AND EXPENSES OF ATTORNEYS AND OTHER COSTS AND EXPENSES OF LITIGATION OR
PREPARING FOR LITIGATION AND DAMAGES OR INJURY TO PERSONS, PROPERTY, OR NATURAL
RESOURCES ARISING UNDER ANY STATUTORY OR COMMON LAW, PUNITIVE DAMAGES, FINES,
AND OTHER PENALTIES, AND (iii) ARE NOT AFFECTED BY THE SOURCE OR ORIGIN OF ANY
HAZARDOUS SUBSTANCE, AND (iv) ARE NOT AFFECTED BY ANY INDEMNITEE'S
INVESTIGATION, ACTUAL OR CONSTRUCTIVE KNOWLEDGE, COURSE OF DEALING, OR WAIVER.
(d) NO INDEMNITEE IS ENTITLED TO BE INDEMNIFIED UNDER THE LOAN
DOCUMENTS FOR ITS OWN FRAUD, GROSS NEGLIGENCE, OR WILLFUL MISCONDUCT.
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(e) THE PROVISIONS OF AND INDEMNIFICATION AND OTHER UNDERTAKINGS UNDER
THIS SECTION SURVIVE THE SATISFACTION OF THE OBLIGATION AND THE FORECLOSURE,
RELEASE, AND TERMINATION OF THE LOAN DOCUMENTS.
7.13 REIT Status. At all times, Borrower (including its organization
and method of operations and those of its Consolidated Affiliates) shall qualify
as a REIT.
7.14 ERISA Exemptions. At all times, Borrower shall qualify as a "real
estate operating company" under the 29 C.F.R. Section 2510.3-101(e) (or any
successor regulation) or other appropriate exemption such that its assets shall
not be deemed "plan assets" as defined in 29 C.F.R. Section 2510.3-101(a)(1) (or
any successor regulation) of any Employee Plan or Multi-employer Plan.
7.15 Listed Company. The common Stock of Borrower shall at all times be
listed for trading and be traded on the New York Stock Exchange, the American
Stock Exchange, or the NASDAQ Stock Market.
7.16 Properties.
(a) Borrower shall cause all of the Companies' Properties to be
operated, maintained, and managed at all times in a professional manner
(including all marketing, advertising, and promotional programs). Borrower shall
keep in effect (or cause to be kept in effect) at all times all permits and
contractual arrangements as may be necessary to meet the standards of operation
described in the foregoing sentence.
(b) Borrower shall cause construction, renovation, and rehabilitation
work with respect to all of the Companies' Properties to be performed in a good
and workmanlike manner substantially in accordance with all Governmental
Requirements and restrictions affecting such Properties.
7.17 Quarterly Distributions. All Consolidated Affiliates shall
distribute all Funds Available for Distribution to Borrower at least quarterly.
7.18 Year 2000 Compliance. Borrower shall, and shall cause each Obligor
to:
(a) Furnish such additional information, statements and other reports
with respect to Obligor's activities, course of action and progress towards
becoming Year 2000 Complaint as Bank One may request from time to time;
(b) In the event of any change in circumstances that causes or will
likely cause Obligor's representations and warranties with
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respect to its being or becoming Year 2000 Compliant to no longer be true
(hereinafter, referred to as a "Change in Circumstances") then Obligor shall
promptly, and in any event within ten (10) days of receipt of information
regarding a Change in Circumstances, provide Agent with written notice (the "Y2K
NOTICE") that describes in reasonable detail the Change in Circumstances and how
such Change in Circumstances caused or will likely cause Obligor's
representations and warranties with respect to being or becoming Year 2000
Compliant to no longer be true. Obligor shall, within ten (10) days of a
request, provide Agent with any additional information Agent requests of Obligor
in connection with the Y2K Notice or a Change in Circumstances; and
(c) Provide Agent access during business hours to, and permit Agent to
examine, copy, or make excerpts from, any and all books, records and documents
in the possession of Obligor and relating to whether such Obligor is Year 2000
Compliant, and to inspect and test any of the Properties and Systems of Obligor
to determine if they are Year 2000 Compliant in an integrated environment.
7.19 Repayment of Certain Unsecured Note. With the proceeds of the
initial advance under this Agreement, Borrower shall, contemporaneously with
Closing, repay all Existing DDR Debt and provide satisfactory evidence of such
repayment to Agent within two (2) Business Days thereafter.
7.20 Subordination of Indebtedness. Prior to incurring any Indebtedness
to DDR other than the Existing DDR Indebtedness, Borrower shall cause DDR to
subordinate such Indebtedness in favor of DDR by Borrower and its Consolidated
Affiliates to the Obligation by instrument satisfactory to Agent in form and
substance.
7.21 Subsidiary Guaranty. Upon the first to occur of, (i) for each
Existing Subsidiary Guarantor, the Closing Date, and (ii) for each Consolidated
Affiliate created subsequent to the Closing Date, the date of formation of such
Consolidated Affiliate, Borrower shall cause each Subsidiary Guarantor to
guarantee the Obligation pursuant to the Subsidiary Guaranty; provided that no
Existing Excluded Subsidiary shall be required to execute the Subsidiary
Guaranty as long as the Existing Debt of such Existing Excluded Subsidiary or
any Permitted Conduit Debt of such Existing Excluded Subsidiary entered into to
refinance such Existing Debt prohibits such Existing Excluded Subsidiary from
executing the Subsidiary Guaranty.
7.22 Ownership of Consolidated Affiliates. Without the prior written
consent of Agent, Borrower shall not create or permit to be created any
Consolidated Affiliate (except for the Existing Consolidated Affiliates) unless
either (a) Borrower is the sole legal and beneficial owner of all ownership
interests in such Consolidated Affiliates, or (b) such Consolidated Affiliate is
a Subsidiary Guarantor.
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SECTION 8
NEGATIVE COVENANTS
So long as Lenders are committed to fund any Borrowings or fund or
issue any LCs under this Agreement and until the Obligation is paid in full,
Borrower covenants and agrees as follows:
8.1 Payment of Obligations. Borrower shall not, and shall not permit
any Company to, voluntarily prepay principal of, or interest on, any Liabilities
other than the Obligation, if a Default has occurred and is continuing at the
time of such voluntary prepayment.
8.2 Employee Plans. Borrower shall not, and shall not permit any
Company to, permit any of the events or circumstances described in Section 6.10
to exist or occur.
8.3 Transactions With Affiliates. Except as disclosed on Schedule 6.14
(as supplemented from time to time to reflect changes as a result of
transactions permitted by this Agreement or approved by Required Lenders),
Borrower shall not, and shall not permit any Company to, enter into any material
transaction with any of its Affiliates, other than transactions in the ordinary
course of business and upon fair and reasonable terms not materially less
favorable than it could obtain or could become entitled to in an arm's-length
transaction with a Person that was not its Affiliate.
8.4 Compliance With Governmental Requirements and Documents. Borrower
shall not, and shall not permit any Company to, (a) violate the provisions of
any Governmental Requirements applicable to it or of any material agreement to
which it is a party, (b) violate the provisions of its Constituent Documents, or
(c) repeal, replace, or amend any provision of its Constituent Documents, in
each case where any of the foregoing could result in a Material Adverse Event.
8.5 Loans, Advances, and Investments. Borrower shall not permit the
Companies to have or make any investments in:
(a) Unimproved land exceeding in the aggregate five percent (5%) of
Total Consolidated Value; or
(b) Joint Venture Categories exceeding in the aggregate five percent
(5%) of Total Consolidated Value; or
(c) The Marketable Securities of Persons (including corporations,
partnerships, joint ventures, and similar entities) that
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are not Consolidated Affiliates exceeding in the aggregate five percent (5%) of
Total Consolidated Value; or
(d) Properties other than industrial, light industrial, or office
Properties exceeding in the aggregate ten percent (10%) of Total Consolidated
Value;
(e) Office Properties exceeding in the aggregate twenty percent (20%)
of Total Consolidated Value;
(f) The investments described in Clauses (a) through (c) above
exceeding in the aggregate ten percent (10%) of Total Consolidated Value; or
(g) Properties under construction or development in an amount with
exceeds ten percent (10%) of Total Consolidated Value.
8.6 Dividends and Distributions. Borrower shall not, and shall not
permit any Company to, declare, make or pay any Distribution, other than
Permitted Distributions. Borrower shall not, and shall not permit any Company
to, enter into or permit to exist any arrangement or agreement (other than this
Agreement) that prohibits it from paying Distributions to the holders of its
Stock.
8.7 Sale of Assets. Borrower shall not, and shall not permit any
Company to, sell, assign, lease, transfer, or otherwise dispose of any of its
assets or any interest therein, other than sales of assets not to exceed in the
aggregate fifteen percent (15%) of Total Consolidated Value in a fiscal year of
the Companies.
8.8 Mergers and Dissolutions. Borrower shall not, and shall not permit
any Company to, merge or consolidate with any other Person or liquidate, wind
up, or dissolve (or suffer any liquidation or dissolution).
8.9 Assignment. Borrower shall not, and shall not permit any Company
to, assign or transfer any of its Rights, duties, or obligations under any of
the Loan Documents.
8.10 Fiscal Year and Accounting Methods. Borrower shall not, and shall
not permit any Company to, change its fiscal year or its method of accounting
(other than changes required or allowed by GAAP).
8.11 New Businesses. Borrower shall not, and shall not permit any
Company to, engage in any type of business except the types of businesses in
which they are presently engaged and any other reasonably related business.
8.12 Government Regulations. Borrower shall not, and shall not permit
any Company to, conduct its business in a way that it becomes
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regulated under the Investment Company Act of 1940, as amended, or the Public
Utility Holding Company Act of 1935, as amended.
8.13 Interest Rate Agreements. Borrower shall not permit, as of any
date, the amount of Indebtedness that is not either subject to a fixed interest
rate or hedged pursuant to an Interest Rate Agreement acceptable to Agent
("Variable Rate Debt") to exceed the lesser of $160,000,000 or fifty percent
(50%) of all Indebtedness.
8.14 Indebtedness. The Companies shall not create, incur, assume,
guarantee, or suffer to exist any Liabilities, other than (a) the Obligation,
(b) trade payables created in the ordinary course of business, (c) endorsements
of negotiable instruments in the ordinary course of business, (d) contingent
Liabilities covered by reserves or insurance, (e) equipment leases incurred in
the ordinary course of business, (f) Interest Rate Agreements in the ordinary
course of business, (g) Non-Recourse Debt secured by Properties other than the
Borrowing Base Properties, (h) Permitted Conduit Debt, (i) with respect to
Indebtedness to DDR only, Indebtedness with a principal amount in excess of
$10,000,000. For at least thirty (30) consecutive days of any twelve (12) month
period, all Indebtedness of any Company in favor of DDR must be repaid. The
principal of the Prudential Debt shall be repaid and reduced according to the
following chart within the following specified time periods:
Within this number of months
after the Closing Date: Amount of principal to be repaid
----------------------- --------------------------------
Nine (9) months Fifty percent (50%)
Twelve (12) months Seventy five percent (75%)
Eighteen (18) months One hundred percent (100%)
8.15 Book Value. Borrower shall not permit any Consolidated Affiliate
that is not a Subsidiary Guarantor to acquire any Property if, following such
acquisition, the total number of Properties owned by Borrower's Consolidated
Affiliates (but excluding the Existing Excluded Subsidiaries) exceeds five
percent (5%) of the Properties owned directly by Borrower or any Consolidated
Affiliates that are Subsidiary Guarantors as of such date, which percentage
shall be calculated based on the cost of such Properties.
8.16 Pledge. Neither Borrower nor any Consolidated Affiliate of
Borrower shall pledge any of its respective interests in any Consolidated
Affiliate of Borrower except to secure Permitted Conduit Debt of such
Consolidated Affiliate of Borrower.
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SECTION 9
FINANCIAL COVENANTS
So long as Lenders are committed to fund Borrowings or fund or issue
any LCs under this Agreement and until the Obligation is paid and performed in
full, Borrower covenants and agrees that Borrower shall not directly or
indirectly permit:
9.1 Total Indebtedness to Total Consolidated Value Ratio. As of the
last day of any fiscal quarter, the Total Indebtedness to Total Consolidated
Value Ratio to exceed sixty-five percent (65%).
9.2 Debt Service Ratio. As of the last day of any fiscal quarter, the
ratio of (a) EBITDA to (b) Debt Service in each case for the Companies on a
consolidated basis and for the twelve (12) month period ending on the date of
determination to be less than 1.25 to 1.0.
9.3 Interest Coverage Ratio. As of the last day of any fiscal quarter,
the ratio of (a) EBITDA, to (b) Interest Expense, in each case for the
Companies, on a consolidated basis and for the twelve (12) month period ending
on the date of determination, to be less than 1.5 to 1.0.
9.4 Minimum Tangible Net Worth. As of the last day of any fiscal
quarter, Tangible Net Worth to be less than the sum of (a) $200,000,000, and (b)
fifty percent (50%) of the amount of Net Proceeds of any Equity Issuances
subsequent to the Closing Date.
SECTION 10
DEFAULT
10.1 Events of Default. The term "Default" means the occurrence of any
one or more of the following events:
(a) Payment of Obligation. The failure of any Obligor to pay any
principal of or any interest on the Obligation when it becomes due and payable
under the Loan Documents.
(b) Covenants. The failure of any Obligor to punctually and properly
perform, observe, and comply with:
(i) any covenant or agreement contained in Section 7.1,
Section 4, or Section 9; or
(ii) any other covenant or agreement contained in any Loan
Document (other than the covenants to pay the principal of and interest
on the Obligation and the covenants in Clause (i) preceding) and if
such failure is susceptible to being cured within the appropriate time,
then such failure shall continue for
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thirty (30) days after the earlier to occur of the date (A) any Obligor
knows of, or (B) any Obligor receives notice from Agent of, such
failure.
(c) Debtor Relief. Any Company (i) is not Solvent, (ii) fails to pay
its Liabilities generally as they become due, (iii) voluntarily seeks, consents
to, or acquiesces in the benefit of any Debtor Relief Law, (iv) becomes a party
to or is made the subject of any proceeding provided for by any Debtor Relief
Law, other than as a creditor or claimant, that could suspend or otherwise
adversely affect the Rights of any Credit Party granted in the Loan Documents
(unless, if the proceeding is involuntary, the applicable petition is dismissed
within sixty (60) days after its filing), or (v) conceals, removes, or permits
to be concealed or removed, any part of its property, with intent to hinder,
delay or defraud its creditors or any of them, or makes or suffers a transfer of
any of its property which may be fraudulent under any bankruptcy, fraudulent
conveyance or similar law; or makes any transfer of its property to or for the
benefit of a creditor at a time when other creditors similarly situated have not
been paid; or suffers or permits, while insolvent, any creditor to obtain a lien
upon any of its property through legal proceedings which are not vacated and
such lien discharged prior to enforcement thereof and in any event within ninety
(90) days from the date thereof.
(d) Judgments and Attachments. Any Company fails, within sixty (60)
days after entry, to pay, bond, or otherwise discharge any judgment or order for
the payment of money in excess of $5,000,000 (individually or collectively) or
any warrant of attachment, sequestration or similar proceeding against any
Company's assets having a value (individually or collectively) of $5,000,000
which is neither (i) stayed on appeal nor (ii) diligently contested in good
faith by appropriate proceedings and adequate reserves have been set aside on
its books in accordance with GAAP.
(e) Government Action.
(i) A final non-appealable order is issued by any Governmental
Authority (including the United States Justice Department) requiring
any Company to divest all or a substantial portion of its assets under
any antitrust, restraint of trade, unfair competition, industry
regulation, or similar Governmental Requirements, or
(ii) Any Governmental Authority seizes or otherwise
appropriates, or takes custody or control of, all or any substantial
portion of the assets of any Company, other than through condemnation
proceeding.
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(f) Misrepresentation. Any material representation or warranty made by
any Company contained in any Loan Document at any time proves to have been
incorrect in any material respect when made.
(g) Default Under Other Agreements.
(i) Any Company shall fail to make any payment in respect of
any Indebtedness when due or within any applicable grace period, if
any; or
(ii) A default shall occur in respect of any credit agreement,
note, mortgage, indenture, or other agreement or document evidencing,
securing, or otherwise relating to any Indebtedness of any Company
(other than a failure to make any payment when due in respect of any
such Indebtedness) and such default shall continue for more than the
period of grace, if any, specified therein or otherwise granted by the
lender thereof; or
(iii) A default shall occur under any other Loan Document
which is not cured within the applicable cure period, if any, expressly
granted therein.
(h) Validity and Enforceability of Loan Documents. Any Loan Document at
any time after its execution and delivery ceases to be in full force and effect
in any material respect or is declared by a Governmental Authority to be null
and void or its validity or enforceability is contested by any Company, or any
Company denies that it has any further liability or obligations under any Loan
Document to which it is a party; or the liens, rights, interests, mortgages or
security interests of Agent in any Borrowing Base Property become unenforceable
in whole or in part, or cease to be of the priority herein required, or the
validity or enforceability thereof, in whole or in part, shall be challenged or
denied by any Obligor.
(i) Management Changes. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall cease
to be active in the management of the Trust and a replacement satisfactory to
Agent is not appointed within 120 days of such cessation.
(j) Change in Control. A Change in Control shall occur.
(k) Plan Assets. The assets of any Company at any time constitute
assets, within the meaning of ERISA, the Code, and the respective regulations
promulgated thereunder, of any Employee Plan or Multi-employer Plan.
(l) Transfer of Borrowing Base Property. Any sale, lease, conveyance,
assignment, pledge, encumbrance, or transfer of all or any part of any Borrowing
Base Property or any interest therein, voluntarily or involuntarily, whether by
operation of law or
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otherwise, except: (i) sales or transfers of items of the Accessories (as
defined in the Mortgage) which have become obsolete or worn beyond practical use
and which have been replaced by adequate substitutes, owned by the applicable
Obligor, having a value equal to or greater than the replaced items when new;
and (ii) the grant, in the ordinary course of business, of a leasehold interest
in a part of the Improvements (as defined in the Mortgage) to a tenant for
occupancy, not containing a right or option to purchase and not in contravention
of any provision of this Agreement or of any other Loan Document. Agent may, in
its sole discretion, waive a default under this paragraph, but it shall have no
obligation to do so, and any waiver may be conditioned upon such one or more of
the following (if any) which Agent may require: the grantee's integrity,
reputation, character, creditworthiness and management ability being
satisfactory to Agent in its sole judgment and grantee executing, prior to such
sale or transfer, a written assumption agreement containing such terms as Agent
may require, a principal paydown on the Note, an increase in the rate of
interest payable under the Note, a transfer fee, a modification of the term of
the Note, and any other modification of the Loan Documents which Holder may
require.
(m) Grant of Easement, Etc. Without the prior written consent of Agent,
any Obligor grants any easement or dedication, files any plat, condominium
declaration, or restriction, or otherwise encumbers any Borrowing Base Property,
or seeks or permits any zoning reclassification or variance, unless such action
is expressly permitted by the Loan Documents or does not affect any Borrowing
Base Property.
(n) Abandonment. Any Obligor abandons any Borrowing Base Property.
(o) Default Under Other Lien. A default or event of default occurs
under any lien, security interest or assignment covering any Borrowing Base
Property or any part thereof (whether or not Agent has consented, and without
hereby implying Agent's consent, to any such lien, security interest or
assignment not created hereunder), or the holder of any such lien, security
interest or assignment declares a default or institutes foreclosure or other
proceedings for the enforcement of its remedies thereunder.
(p) Destruction. Any Borrowing Base Property is so demolished,
destroyed or damaged that, in the reasonable opinion of Agent, it cannot be
restored or rebuilt with available funds to a profitable condition within a
reasonable period of time and in any event prior to the final maturity date of
the Note.
(q) Condemnation. (i) Any governmental authority shall require, or
commence any proceeding for, the demolition of any building or structure
comprising a part of any Borrowing Base
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Property, or (ii) there is commenced any proceeding to condemn or otherwise take
pursuant to the power of eminent domain, or a contract for sale or a conveyance
in lieu of such a taking is executed which provides for the transfer of, a
material portion of any Borrowing Base Property, including but not limited to
the taking (or transfer in lieu thereof) of any portion which would result in
the blockage or substantial impairment of access or utility service to the
Improvements (as defined in the Mortgage) or which would cause any Borrowing
Base Property to fail to comply with any Governmental Requirement.
(r) Liquidation, Etc. The liquidation, termination, dissolution,
merger, consolidation or failure to maintain good standing in the applicable
state of its formation and the state in which its Property is located of any
Company.
10.2 Notice and Cure. If any provision of this Agreement or any other
Loan Document provides for Agent to give to Borrowers any notice regarding a
Default or Potential Default, then if Agent shall fail to give such notice to
Borrowers as provided, the sole and exclusive remedy of Borrowers for such
failure shall be to seek appropriate equitable relief to enforce the agreement
to give such notice and to have any acceleration of the maturity of the Note and
the Obligation postponed or revoked and foreclosure proceedings in connection
therewith delayed or terminated pending or upon the curing of such Default in
the manner and during the period of time permitted by such agreement, if any,
and Borrowers shall have no right to damages or any other type of relief not
herein specifically set out against Agent, all of which damages or other relief
are hereby waived by Borrowers. Nothing herein or in any other Loan Document
shall operate or be construed to add on or make cumulative any cure or grace
periods specified in any of the Loan Documents.
SECTION 11
RIGHTS AND REMEDIES
11.1 Remedies Upon Default.
(a) Debtor Relief. If a Default (i) occurs under Section 10.3(c) or
(ii) occurs and is continuing under Section 10.3(a), (b) or (d), the commitment
to extend credit under this Agreement automatically terminates and the entire
unpaid balance of the Obligation automatically becomes due and payable without
any action of any kind whatsoever.
(b) Other Defaults. If a Default occurs and is continuing, subject to
the terms of Section 13.9(b), then Agent, upon the request of the Required
Lenders, may do any one or more of the following: (i) if the maturity of the
Obligation has not already been accelerated under Section 11.1(a), then declare
the entire unpaid balance of all
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or any part of the Obligation immediately due and payable, whereupon it is due
and payable; (ii) terminate the commitments of Lenders to extend credit under
this Agreement; (iii) reduce any claim to judgment; and (iv) exercise any and
all other legal or equitable Rights afforded by the Loan Documents, or by the
Governmental Requirements of the State of Texas, or any other applicable
jurisdiction.
11.2 Waivers. To the extent permitted by applicable law, each Company
waives presentment and demand for payment, protest, notice of intention to
accelerate, notice of acceleration, and notice of protest and nonpayment, and
agrees that its liability with respect to all or any part of the Obligation is
not affected by any renewal or extension in the time of payment of all or any
part of the Obligation, by any indulgence, or by any release or change in any
security for the payment of all or any part of the Obligation.
11.3 Performance by Agent. If any covenant, duty, or agreement of any
Obligor is not performed in accordance with the terms of the Loan Documents,
Agent may, while a Default exists, at its option, perform, or attempt to perform
that covenant, duty, or agreement on behalf of such Obligor (and any amount
expended by Agent in its performance or attempted performance is payable by to
Agent on demand, becomes part of the Obligation, and bears interest at the
Default Rate from the date of Agent's expenditure until paid). However, neither
Agent nor any Lender assumes or shall have, except by its express written
consent, any liability or responsibility for the performance of any covenant,
duty, or agreement of such Obligor.
11.4 Not in Control. None of the covenants or other provisions
contained in any Loan Document shall, or shall be deemed to, give Agent or
Lenders the Right to exercise control over the assets (including real Property),
affairs, or management of any Company.
11.5 Course of Dealing. The acceptance by Agent or any Lender of any
partial payment on the Obligation shall not be deemed to be a waiver of any
Default then existing. No waiver by any Credit Party of any Default shall be
deemed to be a waiver of any other then-existing or subsequent Default. No delay
or omission by any Credit Party in exercising any Right under the Loan Documents
will impair that Right or be construed as a waiver thereof or any acquiescence
therein, nor will any single or partial exercise of any Right preclude other or
further exercise thereof or the exercise of any other Right under the Loan
Documents or otherwise.
11.6 Cumulative Rights. All Rights available to the Credit Parties
under the Loan Documents are cumulative of and in addition to all other Rights
granted to the Credit Parties at law or in equity, whether or not the Obligation
is due and payable and whether or not
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Agent or Lenders have instituted any suit for collection, foreclosure, or other
action in connection with the Loan Documents.
11.7 Application of Proceeds. Any and all proceeds ever received by any
Credit Party from the exercise of any Rights pertaining to the Obligation shall
be applied to the Obligation according to Section 3.11.
11.8 Certain Proceedings. Borrower shall promptly execute and deliver,
or cause the execution and delivery of, all applications, certificates,
instruments, and all other documents and papers any Agent reasonably requests in
connection with the obtaining of any consent, approval, registration,
qualification, permit, license, or authorization of any Governmental Authority
or other Person necessary or appropriate for the effective exercise of any
Rights under the Loan Documents. Because Borrower agrees that Agent's and
Lenders' remedies at law for failure of Borrower to comply with the provisions
of this paragraph would be inadequate and that failure would not be adequately
compensable in damages, Borrower agrees that the covenants of this Section 11.8
may be specifically enforced.
SECTION 12
AGENT AND LENDERS
12.1 Agent.
(a) Appointment. Each Lender appoints Agent (including, without
limitation, each successor Agent in accordance with this Section 12) as its
nominee and agent to act in its name and on its behalf (and Agent and each such
successor accepts that appointment): (i) to act as its nominee and on its behalf
in and under all Loan Documents; (ii) to arrange the means whereby its funds are
to be made available to Borrower under the Loan Documents; (iii) to take any
action that it properly requests under the Loan Documents (subject to the
concurrence of other Lenders as may be required under the Loan Documents); (iv)
to receive all documents and items to be furnished to it under the Loan
Documents; (v) to be the secured party, mortgagee, beneficiary, recipient, and
similar party in respect of any collateral, for the benefit of Lenders; (vi) to
promptly distribute to it all Financial Statements, Borrowing Base Reports,
notices received hereunder, and other items specifically required to be
delivered to it hereunder, and, upon request, such other material information,
requests, documents, and items received under the Loan Documents; (vii) to
promptly distribute to it its ratable part of each payment or prepayment
(whether voluntary, as proceeds of collateral upon or after foreclosure, as
proceeds of insurance thereon, or otherwise) in accordance with the terms of the
Loan Documents; and (viii) to deliver to the appropriate Persons requests,
demands, approvals, and consents received from it. However, Agent may not be
required to take any
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action that exposes it to personal liability or that is contrary to any Loan
Document or applicable Governmental Requirement.
(b) Successor. Agent may assign all of its Rights and obligations as
Agent under the Loan Documents to any of its Affiliates, which Affiliate shall
then be the successor Agent under the Loan Documents. Agent may also voluntarily
resign by giving thirty (30) days' prior written notice to Borrower and Lenders,
and shall resign upon the request of the Required Lenders for cause (i.e., Agent
is continuing to fail to perform its responsibilities as Agent under the Loan
Documents). If the initial or any successor Agent ever ceases to be a party to
this Agreement or if the initial or any successor Agent ever resigns (whether
voluntarily or at the request of the Required Lenders), then the Required
Lenders shall (which, if no Default or Potential Default exists, is subject to
Borrower's approval that may not be unreasonably withheld) appoint the successor
Agent from among Lenders (other than the resigning Agent). If the Required
Lenders fail to appoint a successor Agent within thirty (30) days after the
resigning Agent has given notice of resignation or the Required Lenders have
removed the resigning Agent, then the resigning Agent may, on behalf of Lenders,
appoint a successor Agent (which, if no Default or Potential Default exists, is
subject to Borrower's approval that may not be unreasonably withheld), which
must be a commercial bank having a combined capital and surplus of at least
$1,000,000,000 (as shown on its most recently published statement of condition)
and whose debt obligations (or whose parent's debt obligations) are rated not
less than Baa1 by ▇▇▇▇▇'▇ or BBB+ by S&P. Upon its acceptance of appointment as
successor Agent, the successor Agent succeeds to and becomes vested with all of
the Rights of the prior Agent, and the prior Agent is discharged from its duties
and obligations of Agent under the Loan Documents, and each Lender shall execute
the documents that any Lender, the resigning or removed Agent, or the successor
Agent reasonably request to reflect the change. After any Agent's resignation or
removal as Agent under the Loan Documents, the provisions of this Section inure
to its benefit as to any actions taken or not taken by it while it was Agent
under the Loan Documents. If Borrower fails to respond to any written request
for any consent required in this Section 12.1(b) within five (5) Business Days
after the date that Borrower receives such request, then Borrower shall be
deemed to have given its consent to such request.
(c) Rights as Lender. Agent, in its capacity as a Lender, has the same
Rights under the Loan Documents as any other Lender and may exercise those
Rights as if it were not acting as Agent. The term "Lender," unless the context
otherwise indicates, includes Agent. Agent's resignation or removal does not
impair or otherwise affect any Rights that it has or may have in its capacity as
an individual Lender. Lenders and Borrower agree that Agent is not a fiduciary
for Lenders or for Borrower but are simply acting in the capacities described in
this Agreement to alleviate administrative burdens for
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Borrower and Lenders, that Agent has no duties or responsibilities to Lenders or
Borrower except those expressly set forth in the Loan Documents, and that Agent
in its capacity as a Lender has the same Rights as any other Lender.
(d) Other Activities. Any Credit Party may now or in the future be
engaged in one or more loan, letter of credit, leasing, or other financing
transactions with Borrower or another Company, act as trustee or depositary for
Borrower or another Company, or otherwise be engaged in other transactions with
Borrower (collectively, the "Other Activities") not the subject of the Loan
Documents. Without limiting the Rights of Lenders specifically set forth in the
Loan Documents, no Credit Party is responsible to account to the other Credit
Parties for those other activities, and no Credit Party shall have any interest
in any other Credit Party's activities, any present or future guaranties by or
for the account of Borrower that are not contemplated by or included in the Loan
Documents, any present or future offset exercised by any Credit Party in respect
of those other activities, any present or future Property taken as security for
any of those other activities, or any Property now or hereafter in any Credit
Party's possession or control that may be or become security for the obligations
of Borrower arising under the Loan Documents by reason of the general
description of indebtedness secured or of Property contained in any other
agreements, documents, or instruments related to any of those other activities
(but, if any payments in respect of those guaranties or that Property or the
proceeds thereof is applied by any Credit Party to reduce the Obligation, then
each Lender is entitled to share ratably in the application as provided in the
Loan Documents).
12.2 Expenses. Should Agent commence any proceeding or in any way seek
to enforce its Rights under the Loan Documents, irrespective of whether as a
result thereof Agent shall acquire title to any collateral, either through
foreclosure, deed in lieu of foreclosure, or otherwise, each Lender, upon demand
therefor from time to time, shall contribute its share (based on its Pro Rata
Share) of the reasonable costs and/or expenses of any such enforcement or
acquisition, including, but not limited to, fees of receivers or trustees, court
costs, title company charges, filing and recording fees, appraisers' fees and
fees and expenses of attorneys to the extent not otherwise reimbursed by
Borrower. Without limiting the generality of the foregoing, each Lender shall
contribute its share (based on its Pro Rata Share) of all reasonable costs and
expenses incurred by Agent (including reasonable attorneys' fees and expenses)
if Agent employs counsel for advice or other representation (whether or not any
suit has been or shall be filed) with respect to any collateral or any part
thereof, or any of the Loan Documents, or the attempt to enforce any Lien in any
of the collateral, or to enforce any Rights of Agent or any of Borrower's or any
other Company's obligations under any of the Loan Documents, but not with
respect to
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any dispute between Agent and any other Lender(s). Any loss of principal and
interest resulting from any Default shall be shared by Lenders in accordance
with their respective Pro Rata Share. It is understood and agreed that if Agent
determines that it is necessary to engage counsel for Lenders from and after the
occurrence of a Potential Default or Default, then said counsel shall be
selected by Agent and written notice of the same shall be delivered to Lenders.
12.3 Proportionate Absorption of Losses. Except as otherwise provided
in the Loan Documents, nothing in the Loan Documents gives any Lender any
advantage over any other Lender insofar as the Obligation is concerned or
relieves any Lender from ratably absorbing any losses sustained with respect to
the Obligation (except to the extent unilateral actions or inactions by any
Lender result in Borrower or any other Company on the Obligation having any
credit, allowance, setoff, defense, or counterclaim solely with respect to all
or any part of that Lender's Pro Rata Share of the Obligation).
12.4 Delegation of Duties; Reliance. Lenders may perform any of their
duties or exercise any of their Rights under the Loan Documents by or through
Agent, and Lenders and Agent may perform any of their duties or exercise any of
their Rights under the Loan Documents by or through their respective
Representatives. Agent, Lenders, and their respective Representatives (a) are
entitled to rely upon (and shall be protected in relying upon) any written or
oral statement believed by it or them to be genuine and correct and to have been
signed or made by the proper Person and, with respect to legal matters, upon
opinion of counsel selected by Agent or that Lender (but nothing in this clause
(a) permits Agent to rely on (i) oral statements if a writing is required by
this Agreement or (ii) any other writing if a specific writing is required by
this Agreement), (b) are entitled to deem and treat each Lender as the owner and
holder of its portion of the Obligation for all purposes until written notice of
the assignment or transfer is given to and received by Agent (and any request,
authorization, consent, or approval of any Lender is conclusive and binding on
each subsequent holder, assignee, or transferee of or Participant in that
Lender's portion of the Obligation until that notice is given and received), (c)
are not deemed to have notice of the occurrence of a Default unless a
Responsible Officer of Agent, who handles matters associated with the Loan
Documents and transactions thereunder, has actual knowledge or Agent has been
notified by a Lender or Borrower, and (d) are entitled to consult with legal
counsel (including counsel for Borrower), independent accountants, and other
experts selected by Agent and are not liable for any action taken or not taken
in good faith by it in accordance with the advice of counsel, accountants, or
experts.
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12.5 Limitation of Agent's Liability.
(a) Exculpation. No Agent nor any of their Affiliates or
Representatives will be liable for any action taken or omitted to be taken by it
or them under the Loan Documents in good faith and believed by it or them to be
within the discretion or power conferred upon it or them by the Loan Documents
or be responsible for the consequences of any error of judgment (except for
fraud, gross negligence, or willful misconduct), and no Agent nor any of its
Affiliates or Representatives has a fiduciary relationship with any Lender by
virtue of the Loan Documents (but nothing in this Agreement negates the
obligation of Agent to account for funds received by it for the account of any
Lender).
(b) Indemnity. Unless indemnified to its satisfaction against loss,
cost, liability, and expense, Agent shall not be compelled to do any act under
the Loan Documents or to take any action toward the execution or enforcement of
the powers thereby created or to prosecute or defend any suit in respect of the
Loan Documents. If Agent requests instructions from Lenders, or the Required
Lenders, as the case may be, with respect to any act or action in connection
with any Loan Document, then Agent is entitled to refrain (without incurring any
liability to any Person by so refraining) from that act or action unless and
until it has received instructions. In no event, however, may Agent or any of
its Representatives be required to take any action that it or they determine
could incur for it or them criminal or onerous civil liability. Without limiting
the generality of the foregoing, no Lender has any Right of action against Agent
as a result of Agent's acting or refraining from acting under this Agreement in
accordance with instructions of the Required Lenders.
(c) Reliance. Agent is not responsible to any Lender or any Participant
for, and each Lender represents and warrants that it has not relied upon Agent
in respect of, (i) the creditworthiness of any Company and the risks involved to
that Lender, (ii) the effectiveness, enforceability, genuineness, validity, or
the due execution of any Loan Document (except by Agent), (iii) any
representation, warranty, document, certificate, report, or statement made
therein (except by Agent) or furnished thereunder or in connection therewith,
(iv) the adequacy of any collateral now or hereafter securing the Obligation or
the existence, priority, or perfection of any Lien now or hereafter granted or
purported to be granted on any collateral under any Loan Document, or (v)
observation of or compliance with any of the terms, covenants, or conditions of
any Loan Document on the part of any Company. EACH LENDER AGREES TO INDEMNIFY
AGENT AND ITS REPRESENTATIVES AND HOLD THEM HARMLESS FROM AND AGAINST (BUT
LIMITED TO SUCH LENDER'S PRO RATA SHARE OF) ANY AND ALL LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS,
REASONABLE EXPENSES, AND REASONABLE DISBURSEMENTS OF ANY KIND OR NATURE
WHATSOEVER THAT MAY BE IMPOSED ON, ASSERTED AGAINST, OR INCURRED BY THEM IN ANY
WAY RELATING TO OR ARISING OUT OF THE LOAN DOCUMENTS OR ANY ACTION TAKEN OR
OMITTED BY THEM UNDER THE LOAN DOCUMENTS IF AGENT AND ITS REPRESENTATIVES ARE
NOT REIMBURSED FOR SUCH AMOUNTS BY ANY COMPANY. ALTHOUGH AGENT AND ITS
REPRESENTATIVES HAVE THE RIGHT
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TO BE INDEMNIFIED UNDER THIS AGREEMENT FOR ITS OR THEIR OWN ORDINARY NEGLIGENCE,
AGENT AND ITS REPRESENTATIVES DO NOT HAVE THE RIGHT TO BE INDEMNIFIED UNDER THIS
AGREEMENT FOR ITS OR THEIR OWN FRAUD, GROSS NEGLIGENCE, OR WILLFUL MISCONDUCT.
12.6 Default. While a Default exists, Lenders agree to promptly confer
in order that the Required Lenders or Lenders, as the case may be, may agree
upon a course of action for the enforcement of the Rights of Lenders. Agent is
entitled to act or refrain from taking any action (without incurring any
liability to any Person for so acting or refraining) unless and until it has
received instructions from the Required Lenders. In actions with respect to any
Company's Property, Agent is acting for the ratable benefit of each Lender.
12.7 Limitation of Liability. No Lender or any Participant will incur
any liability to any other Lender or Participant except for acts or omissions in
bad faith, and neither Agent nor any Lender or Participant will incur any
liability to any other Person for any act or omission of any other Lender or any
Participant.
12.8 Relationship of Lenders. The Loan Documents do not create a
partnership or joint venture among the Credit Parties.
12.9 Benefits of Agreement. None of the provisions of this Section
inure to the benefit of any Company or any other Person except the Credit
Parties. Therefore, no Company nor any other Person is responsible or liable
for, entitled to rely upon, or entitled to raise as a defense -- in any manner
whatsoever -- the failure of any Credit Party to comply with these provisions.
12.10 Approval of Lenders.
(a) All communications from Agent to Lenders requesting Lenders'
determination, consent, approval, or disapproval (i) shall be given in the form
of a written notice to each Lender, (ii) shall be accompanied by a description
of the matter or thing as to which such determination, approval, consent, or
disapproval is requested, or shall advise each Lender where such matter or thing
may be inspected, or shall otherwise describe the matter or issue to be
resolved, (iii) shall include, if reasonably requested by a Lender and to the
extent not previously provided to such Lender, written materials and a summary
of all oral information provided to Agent by Borrower in respect of the matter
or issue to be resolved, and (iv) shall include Agent's recommended course of
action or determination in respect thereof. Each Lender shall reply promptly,
but in any event (x) within thirty (30) days (or such lesser period as may be
required under the Loan Documents for Agent to respond) for those matters
requiring the consent by all Lenders, and (y) within fifteen (15) Business Days
(or such lesser period as may be required under the Loan Documents for Agent to
respond) for those matters requiring the consent by Required Lenders, in each
instance, after receipt of the request therefore by Agent (in either event, the
"Lender Reply Period").
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(b) Unless a Lender shall give written notice to Agent that it objects
to the recommendation or determination of Agent within the Lender Reply Period,
such Lender shall be deemed to have approved of or consented to such
recommendation or determination.
12.11 Collateral Matters.
(a) Each Lender authorizes and directs Agent to enter into the Loan
Documents and agrees that any action taken by Agent concerning any Collateral
(with the consent or at the request of Required Lenders) in accordance with any
Loan Document, that Agent's exercise (with the consent or at the request of
Required Lenders) of powers concerning the Collateral in any Loan Document, and
that all other reasonably incidental powers are authorized and binding upon all
Lenders.
(b) Agent is authorized on behalf of all Lenders, without the necessity
of any notice to or further consent from any Lender, from time-to-time before a
Default or Potential Default, to take any action with respect to any Collateral
or Loan Documents related to Collateral that may be necessary to perfect and
maintain Agent's Liens in the Collateral including, without limitation, making
Protective Advances; provided, however, Agent shall not, without the consent of
Required Lenders, make any Protective Advances during any one (1) calendar year
in excess of the sum of (i) amounts expended to pay real estate taxes,
assessments, and governmental charges or levies imposed upon the Collateral,
(ii) amounts expended to pay insurance premiums for policies of insurance
related to the Collateral, and (iii) $250,000.00.
(c) Except to use the same standard of care that it ordinarily uses for
collateral for its sole benefit, Agent has no obligation whatsoever to any
Lender or to any other Person to assure that the Collateral exists or is owned
by any Company or is cared for, protected, or insured or has been encumbered or
that Agent's Liens have been properly or sufficiently or lawfully created,
perfected, protected, or enforced or are entitled to any particular priority.
(d) Agent shall exercise the same care and prudent judgment with
respect to the Collateral and the Loan Documents as it normally and customarily
exercises in respect of similar collateral and security documents.
(e) Lenders irrevocably authorize Agent, at its option and in its
discretion, to release any Liens upon any Collateral (i) in accordance with
Section 4.5, (ii) constituting property being disposed of as permitted under any
Loan Document, or (iii) if approved,
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authorized, or ratified in writing by the Required Lenders. Upon request by
Agent at any time, Lenders shall confirm in writing the Agent's authority to
release particular types or items of Collateral under this Clause (e).
(f) In the event that all or any portion of the Collateral is acquired
by Agent as the result of a foreclosure or the acceptance of a deed or
assignment in lieu of foreclosure, or is retained in satisfaction of all or any
part of the Obligation, title to any such Collateral or any portion thereof
shall be held in the name of the Agent or a nominee or subsidiary of Agent
(which in any case is authorized to do business in the state in which such
Collateral is located), as agent, for the ratable benefit of Agent and Lenders.
Agent shall prepare a recommended course of action for such Collateral (the
"Post-Foreclosure Plan"), which shall be subject to the approval of Required
Lenders, or shall take such action as directed by the Required Lenders. Agent
shall manage, operate, repair, administer, complete, construct, restore or
otherwise deal with the Collateral acquired and administer all transactions
relating thereto, including, without limitation, employing a management agent
and other agents, contractors and employees, including agents of the sale of
such Collateral, and the collecting of rents and other sums from such Collateral
and paying the expenses of such Collateral. Upon demand therefor from time to
time, each Lender will contribute its share (based on its Pro Rata Part) of all
reasonable costs and expenses incurred by Agent pursuant to the Post-Foreclosure
Plan in connection with the construction, operation, management, maintenance,
leasing and sale of such Collateral. In addition, Agent shall render or cause to
be rendered by the managing agent, to each of the Lenders, monthly, an income
and expense statement for such Collateral, and each of the Lenders shall
promptly contribute its Pro Rata Part of any operating loss for such Collateral,
and such other expenses and operating reserves as Agent shall deem reasonably
necessary pursuant to and in accordance with the Post-Foreclosure Plan. To the
extent there is net operating income from such Collateral, Agent shall, in
accordance with the Post-Foreclosure Plan, determine the amount and timing of
distributions to the Lenders. All such distributions shall be made to the
Lenders in accordance with their respective Pro Rata Parts. The Lenders
acknowledge that if title to any Collateral is obtained by Agent or its nominee,
such Collateral will not be held as a permanent investment but will be
liquidated as soon as practicable. Agent shall undertake to sell such
Collateral, at such price and upon such terms and conditions as the Required
Lenders shall reasonably determine to be most advantageous. Any purchase money
mortgage or deed of trust taken in connection with the disposition of such
Collateral in accordance with the immediately preceding sentence shall name
Agent, as agent for the Lenders, as the beneficiary or mortgagee. In such case,
Agent and the Lenders shall enter into an agreement with respect to such
purchase money mortgage defining the rights of the Lenders in the same Pro Rata
Parts as provided hereunder, which agreement shall
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be in all material respects similar to this Agreement insofar as this Agreement
is appropriate or applicable.
SECTION 13
MISCELLANEOUS
13.1 Headings. The headings, captions and arrangements used in any of
the Loan Documents are, unless specified otherwise, for convenience only and
shall not be deemed to limit, amplify, or modify the terms of the Loan
Documents, nor affect the meaning thereof.
13.2 Nonbusiness Days; Time. Any payment or action that is due under
any Loan Document on a non-Business Day may be delayed until the next-succeeding
Business Day (but interest shall continue to accrue on any applicable payment
until payment is in fact made) unless the payment concerns a Eurodollar
Borrowing, in which case if the next-succeeding Business Day is in the next
calendar month, then such payment shall be made on the next-preceding Business
Day.
13.3 Communications. Unless otherwise specifically provided, whenever
any Loan Document requires or permits any consent, approval, notice, request,
demand, or other communication from one party to another, communication must be
in writing (which may be by telex or telecopy) to be effective and shall be
deemed to have been given (a) if by telex, when transmitted to the appropriate
telex number and the appropriate answer back is received, (b) if by telecopy,
when transmitted to the appropriate telecopy number (and all communications sent
by telecopy must be confirmed promptly thereafter by telephone; but any
requirement in this parenthetical shall not affect the date when the telecopy
shall be deemed to have been delivered), (c) if by mail, on the fifth (5th)
Business Day after it is enclosed in an envelope and properly addressed,
stamped, sealed, certified mail, return receipt requested, and deposited in the
appropriate official postal service, or (d) if by any other means, when actually
delivered; provided that service of a notice in connection with a foreclosure
that is given in accordance with applicable state law shall be effective if
given in accordance with such applicable state law. Until changed by notice
pursuant to this Agreement, the address (and telecopy number) for each party to
a Loan Document is set forth on Schedule 1.
13.4 Form and Number of Documents. The form, substance, and number of
counterparts of each writing to be furnished under this Agreement must be
satisfactory to Agent and its counsel.
13.5 Survival. All covenants, agreements, undertakings,
representations, and warranties made in any of the Loan Documents survive all
closings under the Loan Documents and, except as otherwise indicated, are not
affected by any investigation made by any party.
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13.6 Governing Law. Except as expressly provided in a Loan Document,
the Governmental Requirements (other than conflict-of-laws provisions) of the
▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ of America govern the Rights and duties
of the parties to the Loan Documents and the validity, construction,
enforcement, and interpretation of the Loan Documents.
13.7 Invalid Provisions. Any provision in any Loan Document held to be
illegal, invalid, or unenforceable is fully severable; the appropriate Loan
Document shall be construed and enforced as if that provision had never been
included; and the remaining provisions shall remain in full force and effect and
shall not be affected by the severed provision. Agent, Lenders, and Borrower
agrees to negotiate, in good faith, the terms of a replacement provision as
similar to the severed provision as may be possible and be legal, valid and
enforceable. However, if the provision held to be illegal, invalid, or
unenforceable is a material part of this Agreement, such invalid, illegal, or
unenforceable provision shall be, to the extent permitted by applicable law,
replaced by a clause or provision judicially construed and interpreted to be as
similar in substance and content to the original terms of such illegal, invalid,
or unenforceable clause or provision as the context thereof would reasonably
allow, so that such clause or provision would thereafter be legal, valid, and
enforceable.
13.8 Venue; Service of Process; Jury Trial. EACH PARTY TO ANY LOAN
DOCUMENT, IN EACH CASE FOR ITSELF, ITS SUCCESSORS AND ASSIGNS (AND IN THE CASE
OF BORROWER, FOR EACH OF ITS CONSOLIDATED AFFILIATES), (a) IRREVOCABLY SUBMITS
TO THE NONEXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS OF THE STATE OF
TEXAS, (b) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
LITIGATION ARISING OUT OF OR IN CONNECTION WITH THE LOAN DOCUMENTS AND THE
OBLIGATION BROUGHT IN DISTRICT COURTS OF DALLAS COUNTY, TEXAS, OR IN THE UNITED
STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS, DALLAS DIVISION, (c)
IRREVOCABLY WAIVES ANY CLAIMS THAT ANY LITIGATION BROUGHT IN ANY OF THE
AFOREMENTIONED COURTS HAS BEEN BROUGHT IN AN INCONVENIENT FORUM, (d) IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THOSE COURTS IN ANY LITIGATION
BY THE MAILING OF COPIES THEREOF BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED,
POSTAGE PREPAID, BY HAND-DELIVERY, OR BY DELIVERY BY A NATIONALLY RECOGNIZED
COURIER SERVICE, AND SERVICE SHALL BE DEEMED COMPLETE UPON DELIVERY OF THE LEGAL
PROCESS AT ITS ADDRESS SET FORTH IN THIS AGREEMENT, (e) IRREVOCABLY AGREES THAT
ANY LEGAL PROCEEDING AGAINST ANY PARTY TO ANY LOAN DOCUMENT ARISING OUT OF OR IN
CONNECTION WITH THE LOAN DOCUMENTS OR THE OBLIGATION MAY BE BROUGHT IN ONE OF
THE AFOREMENTIONED COURTS, AND (f) VOLUNTARILY, KNOWINGLY, IRREVOCABLY, AND
UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW, ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF ANY LOAN DOCUMENT. The scope of each of
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the foregoing waivers is intended to be all-encompassing of any and all disputes
that may be filed in any court and that relate to the subject matter of this
transaction, including contract claims, tort claims, breach of duty claims, and
all other common law and statutory claims. Borrower (for itself and on behalf of
each of its Consolidated Affiliates) acknowledges that these waivers are a
material inducement to each Credit Party's agreement to enter into a business
relationship, that each Credit Party has already relied on these waivers in
entering into this Agreement, and that each Credit Party will continue to rely
on each of these waivers in related future dealings. Borrower (for itself and on
behalf of each of its Consolidated Affiliates) further warrants and represents
that it has reviewed these waivers with its legal counsel, and that it knowingly
and voluntarily agrees to each waiver following consultation with legal counsel.
THE WAIVERS IN THIS SECTION 13.8 ARE IRREVOCABLE, MEANING THAT THEY MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND THESE WAIVERS SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, SUPPLEMENTS, OR REPLACEMENTS TO OR OF THIS OR ANY OTHER
LOAN DOCUMENT. In the event of Litigation, this Agreement may be filed as a
written consent to a trial by the court.
13.9 Amendments, Consents, Conflicts, and Waivers.
(a) Required Lenders. Unless otherwise specifically provided, the
provisions of this Agreement may be amended, modified, or waived, only by an
instrument in writing executed by Borrower and the Required Lenders and
supplemented only by documents delivered or to be delivered in accordance with
the express terms of this Agreement.
(b) All Lenders. Except as specifically otherwise provided in this
Section 13.9, any amendment to or consent or waiver under this Agreement or any
Loan Document that purports to accomplish any of the following must be by an
instrument in writing executed by Borrower and executed (or approved, as the
case may be) by each Lender (other than any Defaulting Lender): (i) extends the
Maturity Date or the Termination Date; (ii) extends the due date or decreases
the amount of any scheduled payment or amortization of the Obligation or any
fees or other amounts payable hereunder beyond the date specified in the Loan
Documents; (iii) decreases any rate or amount of interest, fees, principal, or
other sums payable to the Credit Parties under this Agreement (except such
reductions as are contemplated by this Agreement); (iv) changes the definition
of "Adjusted NOI," "Change in Control," "Commitment," "Eligible Assignee,"
"Total Consolidated Value," "Pro Rata," "Pro Rata Share," "Required Lenders,"
"Qualified Property," "Total Commitment," or "Total Indebtedness to Total
Consolidated Value Ratio;" or (v) increases any one or more Lenders' Commitment;
(vi) waives compliance with, amends, or fully or partially releases (or waives
the requirement of) any guaranty, or any collateral, except to the extent
expressly required by the Loan Documents; (vii) permits Borrower to assign any
of its Rights
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hereunder; (viii) amends Section 4.1; (ix) change the percentage of the
Commitments or of the unpaid principal amount of the Notes, or the number of
Lenders, which shall be required for Lenders or any of them to take any action
under this Section or any other provision of this Agreement; or (x) changes this
Section 13.9(b) or any other matter specifically requiring the consent of all
Lenders under this Agreement.
(c) Agent or Issuing Bank. Any amendment or supplement to, or waiver or
consent under, any Loan Document that purports to accomplish any of the
following must be by a writing executed by Borrower and executed (or approved in
writing, as the case may be) by the affected Agent or Issuing Bank, as the case
may be (in addition to the Required Lenders or all Lenders, as the case may be,
as required by this Section 13.9): (i) extends the due date for, decreases the
amount or rate of calculation of, or waives the late or non-payment of, any fees
payable to Agent or Issuing Bank under any Loan Document, except, in each case,
any adjustments or reductions that are contemplated by any Loan Document; (ii)
increases Agent's or Issuing Bank's, as the case may be, obligations beyond its
commitments under any Loan Document; or (iii) changes this Clause (c) or any
other matter specifically requiring the consent of Agent or Issuing Bank, as the
case may be, under any Loan Document.
(d) LCS. Any LC may be renewed, extended, amended, replaced, or
canceled consistent with the terms of this Agreement by a writing executed by
Issuing Bank and Borrower if such writing is first approved in writing by Agent.
(e) Conflicts. Any conflict or ambiguity between the terms and
provisions of this Agreement and terms and provisions in any other Loan Document
is controlled by the terms and provisions of this Agreement.
(f) Course of Dealing. No course of dealing or any failure or delay by
any Credit Party or any of its Representatives with respect to exercising any
Right of any Credit Party under this Agreement operates as a waiver thereof. A
waiver must be in writing and signed by the Required Lenders or Lenders, as
appropriate, to be effective, and a waiver will be effective only in the
specific instance and for the specific purpose for which it is given.
13.10 Multiple Counterparts. Any Loan Document may be executed in a
number of identical counterparts, each of which shall be deemed an original for
all purposes and all of which constitute, collectively, one agreement; but, in
making proof of thereof, it shall not be necessary to produce or account for
more than one counterpart. Each Lender need not execute the same counterpart of
this Agreement so long as identical counterparts are executed by Borrower and
each Credit Party. This Agreement shall become effective when counterparts
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of this Agreement have been executed and delivered to Agent by each Credit Party
and Borrower, or, in the case only of Lenders, when Agent has received
telecopied, telexed, or other evidence satisfactory to it that each Lender has
executed and is delivering to Agent a counterpart of this Agreement.
13.11 Assignments and Participations.
(a) Assignments. Each Lender may assign to one or more Eligible
Assignees all or a portion of its Rights and obligations under this Agreement
(including, without limitation, all or a portion of its Borrowings, its Note,
and its Commitment); provided, however, that:
(i) each such assignment shall be to an Eligible Assignee;
(ii) except in the case of an assignment to an Affiliate of
such Lender to another Lender or an assignment of all of a Lender's
Rights and obligations under this Agreement, any such partial
assignment shall be in an amount at least equal to $5,000,000 or a
greater integral multiple of $1,000,000;
(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 Agreement and the Note; and
(iv) the parties to such assignment shall execute and deliver
to Agent for its acceptance an Assignment and Acceptance (herein so
called) in the form of Exhibit I, together with any Note subject to
such assignment and a processing fee of $3,500.
Upon execution, delivery, and acceptance of such Assignment and Acceptance, 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 Agreement. Upon the
consummation of any assignment pursuant to this Section, the assignor, Agent,
and Borrower shall make appropriate arrangements so that, if required, new Notes
are issued to the assignor and the assignee. If the assignee is not incorporated
under the laws of the United States of America or a state thereof, it shall
deliver to Borrower and Agent certification as to exemption from deduction or
withholding of Taxes in accordance with Section 3.19.
(b) Register. Agent shall maintain at its address referred to in
Section 13.3, a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses of Lenders
and the Commitment of, and principal amount of the Borrowings owing to, each
Lender from time to time (the
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"Register"). The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and Borrower and the Credit Parties may treat
each Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
Borrower or any Credit Party at any reasonable time and from time to time upon
reasonable prior notice.
(c) Acceptance of Assignment. Upon its receipt of an Assignment and
Acceptance executed by the parties thereto, together with any Note subject to
such assignment and payment of the processing fee, Agent shall, if such
Assignment and Acceptance has been completed and is in substantially the form of
Exhibit I, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register, and (iii) give prompt notice
thereof to the parties thereto.
(d) Participations. Each Lender may sell participations to one or more
Persons in all or a portion of its Rights and obligations under this Agreement
(including all or a portion of its Commitment and its Borrowings); provided,
however, that (i) such Lender's obligations under this 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 yield protection provisions contained in Section
3.14 and the Right of setoff contained in Section 3.12, and (iv) Borrower shall
continue to deal solely and directly with such Lender in connection with such
Lender's Rights and obligations under this Agreement, and such Lender shall
retain the sole Right to enforce the obligations of Borrower relating to its
Borrowings and its Note and to approve any amendment, modification, or waiver of
any provision of this Agreement (other than amendments, modifications, or
waivers decreasing the amount of principal of or the rate at which interest is
payable on such Borrowings or Note, waiving or decreasing any fees payable to
such Lender, extending any scheduled principal payment date or date fixed for
the payment of interest on such Borrowings or Note, or extending its
Commitment).
(e) Collateral Assignments. Notwithstanding any other provision set
forth in this Agreement, any Lender may at any time assign and pledge all or any
portion of its Borrowings and its Note 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.
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(f) Information. Any Lender may furnish any information concerning the
Companies in the possession of such Lender from time to time to assignees and
participants (including prospective assignees and participants).
13.12 Discharge Only Upon Payment in Full; Reinstatement in Certain
Circumstances. Borrower's obligations under the Loan Documents remain in full
force and effect until the Total Commitment is terminated and the Obligation is
paid in full (except for provisions under the Loan Documents which by their
terms expressly survive payment of the Obligation and termination of the Loan
Documents). If at any time any payment of the principal of or interest on any
Note or any other amount payable by Borrower or any other obligor on the
Obligation under any Loan Document is rescinded or must be restored or returned
upon the insolvency, bankruptcy, or reorganization of Borrower or otherwise,
then the obligations of Borrower under the Loan Documents with respect to that
payment shall be reinstated as though the payment had been due but not made at
that time.
13.13 Initial and Subsequent Lenders.
(a) Initial Lenders. The Lenders on the Closing Date shall be the
Lender set forth on Schedule 1 attached hereto on the Closing Date.
(b) Subsequent Lenders. After the Closing Date, Agent may, from time to
time, admit additional Lenders hereunder (each a "Subsequent Lender"), or, at
the request of any Lender, increase the Commitment of such Lender (each an
"Increasing Lender"), subject to the following conditions:
(i) Each Subsequent Lender is an Eligible Assignee;
(ii) Borrower executes (A) a new Note payable to the order of
the Subsequent Lender, or (B) a replacement Note payable to the order
of an Increasing Lender;
(iii) Borrower pays all fees described in this Agreement and
any fee letter(s);
(iv) Each Subsequent Lender executes a signature page to this
Agreement;
(v) After giving effect the admission of any Subsequent Lender
or the increase in the Commitment of any Increasing Lender, the Total
Commitment does not exceed $150,000,000; and
(vi) No admission of any Subsequent Lender shall increase the
Commitment of any existing Lender.
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Borrower shall pay any commitment fees required by a Subsequent Lender in
connection with the admission of such Subsequent Lender. After the admission of
any Subsequent Lender or the increase in the Commitment of any Increasing
Lender, Agent shall provide to each Lender a new Schedule 1 to this Agreement.
Agent shall use reasonable efforts, but shall not be obligated, to obtain
Subsequent Lenders or Increasing Lenders. Borrower agrees to indemnify and
defend Agent and its directors, officers, agents, attorneys, employees and
affiliates from, and hold each of them harmless against, any and all losses,
liabilities, claims, damages or expenses incurred by them or any of them,
arising out of or by reason of any investigation, litigation or other proceeding
brought or threatened relating to any loan made or proposed to be made to any
Obligor in connection with the matters herein referred to (including, without
limitation, any use made or proposed to be made by any Obligor of the
Borrowings), or any commitment or proposed commitment relating to the
Borrowings, including, without limitation, amounts paid in settlement, court
costs, and fees and disbursements of counsel incurred in connection with any
such investigation, litigation or other proceeding, but excluding any such
losses, liabilities, claims, damages or expenses incurred solely by reason of
the fraud, gross negligence, or willful misconduct of Agent.
13.14 ENTIRETY. THIS AGREEMENT AND THE OTHER WRITTEN LOAN DOCUMENTS
(EACH AS AMENDED IN WRITING FROM TIME TO TIME) EXECUTED BY BORROWER AND/OR ANY
CREDIT PARTY REPRESENT THE FINAL AGREEMENT AMONG BORROWER AND THE CREDIT PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE
PARTIES.
[Remainder of Page Intentionally Left Blank;
Signature Page Follows.]
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SIGNATURE PAGE TO CREDIT AGREEMENT BETWEEN
AMERICAN INDUSTRIAL PROPERTIES REIT,
BANK ONE, TEXAS, N.A., AS AGENT,
AND THE LENDERS DEFINED THEREIN
EXECUTED as of the day and year first mentioned.
BORROWER:
AMERICAN INDUSTRIAL PROPERTIES REIT,
a Texas real estate investment trust,
as a Borrower
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
Title: Senior Vice President
-----------------------------
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SIGNATURE PAGE TO CREDIT AGREEMENT BETWEEN
AMERICAN INDUSTRIAL PROPERTIES REIT,
BANK ONE, TEXAS, N.A., AS AGENT,
AND THE LENDERS DEFINED THEREIN
AGENT:
BANK ONE, TEXAS, N.A.,
a national banking association
By: /s/ ▇▇▇▇ ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
----------------------------------
Title: Vice President
---------------------------------
LENDERS:
BANK ONE, TEXAS, N.A.,
a national banking association
By: /s/ ▇▇▇▇ ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
----------------------------------
Title: Vice President
---------------------------------
Credit Agreement Page 87
