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EXHIBIT 10(k)(1)
U.S. $150,000,000
SECOND AMENDED AND RESTATED
REVOLVING CREDIT LOAN AGREEMENT
Dated as of December 30 , 1998
between
▇▇▇▇▇ EQUITY, INC.
as Borrower
and
FIRST UNION NATIONAL BANK, AS ADMINISTRATIVE AGENT AND
ARRANGER
AMSOUTH BANK, AS SYNDICATION AGENT,
AND
THE LENDERS
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS.......................................................1
SECTION 1.1 Certain Defined Terms.........................................................1
SECTION 1.2 Accounting Terms.............................................................14
ARTICLE 2 AMOUNT AND TERMS OF ADVANCES..........................................................14
SECTION 2.1 Advances.....................................................................14
(a) Advances.....................................................................14
(b) Letter of Credit.............................................................14
(c) Terms of Letters of Credit...................................................15
(d) Requests for Issuance of Letter of Credit....................................15
(e) Reimbursement Obligations....................................................15
(f) Effect of Letters of Credit on Commitments...................................15
(g) Agent's Duties Regarding Letters of Credit;
Unconditional Nature of Reimbursement Obligation.............................16
(h) Amendments, Etc..............................................................17
(i) Lenders' Participation in Letters of Credit..................................17
(j) Information to Lenders.......................................................17
SECTION 2.2 Making Advances..............................................................17
SECTION 2.3 Swing Line Advances..........................................................19
SECTION 2.4 Fees.........................................................................21
SECTION 2.5 Repayment of Advances; Prepayments...........................................21
SECTION 2.6 Interest Rate; Default Rate..................................................23
SECTION 2.7 Payments and Computations....................................................23
SECTION 2.8 Evidence of Indebtedness.....................................................24
SECTION 2.9 Prior LIBOR Advances.........................................................24
SECTION 2.10 Advances Under Prior Loan Agreement..........................................24
SECTION 2.11 Increase to Loan Amount......................................................24
ARTICLE III CONDITIONS OF LENDING AND FINANCIAL COVENANTS.........................................25
SECTION 3.1 Conditions Precedent to Advances and Financial
Covenants....................................................................25
SECTION 3.2 Conditions Precedent to Certain Advances.....................................27
SECTION 3.3 Eligible Borrowing Base......................................................28
ARTICLE IV ADDITION, SUBSTITUTION AND RELEASE OF
COLLATERAL............................................................................29
SECTION 4.1 General Right to Add, Substitute or Release Collateral.......................29
SECTION 4.2 Requirements for Release of Collateral.......................................30
SECTION 4.3 Requirements for Addition or Substitution of Collateral......................30
SECTION 4.4 Lenders' Approval of Addition or Substitution of
Collateral...................................................................33
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ARTICLE V CERTAIN MATTERS CONCERNING THE COLLATERAL.............................................34
SECTION 5.1 Inspections..................................................................34
SECTION 5.2 Appraisals...................................................................34
SECTION 5.3 Insurance....................................................................34
SECTION 5.4 Taxes and Assessments........................................................35
SECTION 5.5 Tax and Insurance Deposits...................................................35
SECTION 5.6 Tax Service Contract; Annual Tax Searches....................................36
SECTION 5.7 Due on Sale..................................................................36
SECTION 5.8 Loss and Restoration following Casualty or
Condemnation.................................................................36
ARTICLE VI REPRESENTATIONS AND WARRANTIES........................................................37
SECTION 6.1 Representations and Warranties of Borrower...................................37
ARTICLE VII COVENANTS OF BORROWER.................................................................39
SECTION 7.1 Affirmative Covenants........................................................39
(a) Costs and Expenses...........................................................40
(b) Rent Roll....................................................................40
(c) Compliance with Governmental Requirements....................................40
(d) Preservation of Corporate Existence..........................................40
(e) Preservation and Maintenance of Collateral...................................41
(f) Reporting Requirements.......................................................41
(g) Notice of Failure to Perform.................................................42
SECTION 7.2 Negative Covenants...........................................................42
(a) Use of Loan Proceeds.........................................................42
(b) Structural Alterations.......................................................42
(c) Change in Nature of Business.................................................42
(d) Transactions with Subsidiaries...............................................42
ARTICLE VIII DEFAULT...............................................................................42
SECTION 8.1 Events of Default............................................................42
SECTION 8.2 Remedies following an Event of Default.......................................44
SECTION 8.3 Default Interest.............................................................44
SECTION 8.4 Remedies Cumulative..........................................................44
ARTICLE IX THE AGENT.............................................................................45
SECTION 9.1 Appointment, Powers and Immunities...........................................45
SECTION 9.2 Reliance.....................................................................46
SECTION 9.3 Defaults.....................................................................47
SECTION 9.4 Rights as a Lender...........................................................47
SECTION 9.5 Indemnification..............................................................47
SECTION 9.6 Non-Reliance on Agent and Other Lenders......................................48
SECTION 9.7 Failure to Act...............................................................48
SECTION 9.8 Resignation of Agent.........................................................48
SECTION 9.9 No Partnership...............................................................49
SECTION 9.10 Collateral...................................................................49
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ARTICLE X OBLIGATIONS AND RIGHTS OF THE LENDERS.................................................49
SECTION 10.1 Custody of Loan Documents....................................................49
SECTION 10.2 Account Records..............................................................50
SECTION 10.3 Collections of Payments......................................................50
SECTION 10.4 Standard of Care.............................................................50
SECTION 10.5 Payment; Set Offs and Banker's Liens.........................................50
SECTION 10.6 Selection and Adjustment of Interest Rates...................................50
SECTION 10.7 Disbursements for Protection of Collateral and Collection
and Enforcement of Obligations...............................................51
ARTICLE XI ENFORCEMENT OF THE LOAN...............................................................51
SECTION 11.2 Waiver of Default and Modification...........................................52
SECTION 11.3 Foreclosure or Exercise of Power of Sale.....................................52
SECTION 11.4 Disposition of Collateral After Foreclosure or Exercise of
Power of Sale................................................................52
ARTICLE XII ASSIGNMENTS...........................................................................53
SECTION 12.1 Survival; Parties Bound: Successors and Assigns..............................53
ARTICLE XIII MISCELLANEOUS.........................................................................54
SECTION 13.1 Prior Loan Agreement.........................................................54
SECTION 13.2 Amendments, Etc..............................................................54
SECTION 13.3 Indemnification and Limitation of Claims.....................................54
SECTION 13.4 Notices......................................................................55
SECTION 13.5 No Waiver; Remedies..........................................................56
SECTION 13.6 Binding Effect; Assignment...................................................56
SECTION 13.7 Governing Law; Jurisdiction and Venue........................................56
SECTION 13.8 Severability.................................................................57
SECTION 13.9 Headings.....................................................................57
SECTION 13.10 Counterparts.................................................................57
SECTION 13.11 WAIVER OF TRIAL BY JURY......................................................57
SECTION 13.12 Transfer of Collateral to Special Purpose Entity.............................57
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SECOND AMENDED AND RESTATED
REVOLVING CREDIT LOAN AGREEMENT
THIS SECOND AMENDED AND RESTATED REVOLVING CREDIT LOAN AGREEMENT (the
"Agreement") dated as of December 30, 1998, by and between ▇▇▇▇▇ EQUITY, INC., a
Florida corporation (the "Borrower"), and FIRST UNION NATIONAL BANK, a national
association, as Agent for the Lenders (as defined herein).
BACKGROUND
This Second Amended and Restated Revolving Credit Loan Agreement amends
and restates that certain Amended and Restated Revolving Credit Loan Agreement
dated December 29, 1997 by and among First Union National Bank of Florida, a
national association, ▇▇▇▇▇▇ Guaranty Trust Company of New York, a New York
banking corporation, AmSouth Bank, a state banking corporation, and Guaranty
Federal Bank, F.S.B., a federal savings bank, as lenders, and Borrower (the
"Prior Loan Agreement"). The covenants, terms and provisions of this Agreement
shall apply and shall govern the administration of the Loan and the making of
Advances from and after the date of execution of this Agreement.
IN CONSIDERATION of the mutual covenants herein contained, Borrower and
the Lenders agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1 Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Adjusted EBITDA" means EBITDA minus Replacement Reserves.
"Adjusted Net Operating Income" means the aggregate Net
Operating Income for all Properties included within the Collateral multiplied by
four (4) minus Replacement Reserves.
"Advance" means (i) any Principal Advance, and (ii) any
Letters of Credit issued by the Agent on behalf of the Lenders, in accordance
with the terms and provisions of Section 2.1(b) hereof.
"Affiliate" shall mean any Person controlling, controlled by
or under common control with any other Person. For purposes of this definition,
"control" (including "controlled by" and "under common control with") means the
possession, directly or
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indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities or
otherwise.
"Agent" means First Union National Bank, in its capacity as
administrative agent for the Lenders.
"Agent's Counsel" means LeBoeuf, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P.
"AmSouth" means AmSouth Bank, a state banking corporation.
"Appraisal" means an appraisal of a Property which is FIRREA
compliant.
"Assignment of Contracts" means each Assignment of Contracts,
Licenses and Permits dated the Closing Date or on any Collateral Change Date and
each Amendment to Assignment of Contracts, Licenses and Permits dated the
Closing Date or on any Collateral Change Date given by Borrower to the Agent for
the benefit of the Lenders assigning to the Lenders all of Borrower's interest
in all contracts, licenses, permits, approvals, warranties, guaranties, service
contracts, equipment leases, deposits and water and sewer rights relating to the
Collateral located in each State.
"Base Rate" means an annual rate of interest equivalent to the
interest rate (but not necessarily the best or lowest rate charged borrowing
customers of FUNB) published or announced by FUNB from time to time as its prime
rate, calculated on the basis of a 365 (or 366, if applicable) day year.
"Base Rate Advance" means any Advance bearing interest at the
Base Rate pursuant to Article II.
"Borrower" means, ▇▇▇▇▇ Equity, Inc., a Florida corporation
and any SPE (as defined herein) added as a Borrower pursuant to Section 13.12
from time to time.
"Borrowing Base" means those Properties owned by Borrower
which are encumbered by perfected first mortgage security interests and
assignment of rents and leases and are included as Collateral for the Borrower's
Obligations hereunder and under the Loan.
"Borrowing Base Value" means the aggregate Borrowing Base
Value for all Properties included within the Collateral, determined as follows:
(i) for those Properties listed on Exhibit A under the subset of "Existing
Properties Included Within Collateral", Borrowing Base Value shall mean the
Adjusted Net Operating Income of all such existing Properties included within
the Collateral determined as of the end of the last preceding quarter as
reported to the Agent in accordance with the requirements hereof, multiplied by
four and divided by the Capitalization Rate, (ii) for those Properties listed on
Exhibit A under the subset of "New Properties Included Within Collateral",
Borrowing Base Value shall mean the value set by the Appraisals for all such new
Properties delivered to Agent
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in connection with the execution of this Agreement and associated with all such
new Properties. From and after the end of the first quarter following execution
of this Agreement, Borrowing Base Value as to such new Properties shall mean
Adjusted Net Operating Income determined as of the end of the last preceding
quarter as reported to the Agent in accordance with the requirements hereof,
multiplied by four and divided by the Capitalization Rate, and (iii) for all
Properties added to Collateral in accordance with Article IV of this Agreement,
Borrowing Base Value shall be calculated according to the formula set forth in
subsection (ii) above with Adjusted Net Operating Income being used to determine
Borrowing Base Value from and after the end of the first quarter following the
addition of any such Properties or Collateral.
"Business Day" means a day of the year on which banks are not
required or authorized to close in Charlotte, North Carolina, and, if the
applicable Business Day relates to any LIBOR Advances, on which dealings are
carried on in the London interbank market and banks are open for business in
London, England.
"Capitalization Rate" means 9.75% per annum, as adjusted from
time to time upon approval of all of the Lenders and the Borrower.
"Cash Available for Distribution" means, with respect to a
given period, Borrower's Funds From Operations for the most recent four (4)
quarters, excluding all straight line rent leveling adjustments (reported in the
consolidated financial statements of the Borrower for purposes of GAAP) minus
Replacement Reserves and minus Scheduled Principal Payments on such Total Debt
for the most recent four (4) quarters, whether or not paid by Borrower
(excluding balloon payments).
"Citizens" means Citizens Bank of Rhode Island, a Rhode Island
financial institution.
"Closing Date" means December 30, 1998.
"Code" means the Internal Revenue Code, as amended, and
Regulations promulgated thereunder.
"Collateral" means the real property described on attached
Exhibit A, and all easements and appurtenances thereto, and all improvements,
furniture, fixtures and equipment, and related tangible and intangible personal
property owned or leased by Borrower located thereon, and such other real
property and easements and appurtenances thereto, and improvements, furniture,
fixtures and equipment, and related tangible and intangible personal property
owned or leased by Borrower located thereon, now or hereafter mortgaged,
assigned, granted or conveyed by Borrower to the Agent or a trustee for the
benefit of the Lenders as security for the payment and performance of the
Obligations, pursuant to the terms, covenants and conditions of this Agreement
and the other Loan Documents.
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"Collateral Change Date" means the effective date of any (i)
release of property from the Collateral, or (ii) addition of property to the
Collateral as additional Collateral or in substitution of property released or
to be released from the Collateral, as the case may be, pursuant to Article IV.
"Commitment" means the commitment of the Lenders' funds
pursuant to Article II hereof up to the Loan Amount.
"Compass" means Compass Bank, an Alabama banking corporation.
"Construction in Progress" means, the actual land acquisition
costs and construction costs expended for Properties in which construction has
begun but has not yet been completed. Such Property shall be reclassified from
Construction in Progress upon the completion of construction, as represented by
the issuance of a final certificate of occupancy, or its equivalent.
"Default" has the meaning set forth in Section 8.1.
"Default Rate" means a rate of interest equivalent to the then
applicable interest rate for each outstanding Advance at the time of a
particular Default, plus 4.00%, calculated on the basis of a 360 day year.
"Development in Progress" means the aggregate, good faith
estimated budgeted cost of construction (including land acquisition costs) for
Properties on which construction has begun but has not yet been completed. Such
Property shall be reclassified from Development in Progress upon the earlier of
(1) achieving executed leases in place for 85% of such Property or (2)
completion of construction, as represented by the issuance of a final
certificate of occupancy, or its equivalent.
"Due Diligence Package" shall mean the following information:
Appraisal; Phase I environmental site assessment; market information;
demographics; executed leases; copies of all contracts; permits and licenses
related thereto; rent roll; operating statement; an A.L.T.A. Standard Loan
Policy (or, with respect to any Texas property, a T.L.T.A. Standard Loan Policy)
of title insurance insuring the Security Deed and deleting the gap and standard
exceptions for encroachments and easements not shown by the public records,
matters of survey, mechanics and materialmen's liens and parties in possession,
together with copies of all documents listed as title exceptions therein; an
ALTA/ACSM survey meeting the Minimum Standards and Supplementary Requirements
for surveys on attached Exhibit D, and any other information reasonably
requested by the Agent.
"EBITDA" means, for any period of calculation and without
duplication, net income (loss) of Borrower (including any SPE under Section
13.12) for such period (determined in accordance with GAAP and excluding equity
net income or net losses of Subsidiaries and unconsolidated Affiliates) plus the
sum of the following amounts (but only
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to the extent included in determining net income (loss) for such period): (a)
depreciation and amortization expense of Borrower for such period plus (b)
Interest Expense of Borrower for such period plus (c) income tax expense of
Borrower in respect of such period plus (d) extraordinary losses of Borrower,
losses from the sale of assets of Borrower and losses resulting from forgiveness
of debt by Borrower, all for such period minus (e) extraordinary gains of
Borrower and gains from the sale of assets of Borrower for such period plus or
minus (f) the Borrower's pro rata share of EBITDA of unconsolidated Affiliates
(that are solely engaged in the investment of office real estate assets)
determined in a manner consistent with this definition of EBITDA plus (g)
deductions taken with respect to minority interest and (h) plus or minus an
adjustment to omit the non-cash effect of straight-lining of Rents. For purposes
of calculating "Adjusted EBITDA" for the financial covenants in Section
3.1(a)(iv) and Section 3.1(a)(v), EBITDA shall include the Borrower's pro rata
share of EBITDA from ▇▇▇▇▇ Realty Services, Inc., a Florida corporation.
"Eligible Assignees" means commercial banks, savings banks,
savings and loan associations or similar financial institutions, insurance
companies and mutual funds having total assets of $5,000,000,000 or more, and
which are generally engaged in lending of this type and in full compliance with
all FDIC Control Act requirements or other regulatory requirements.
"Eligible Land" means land owned by the Borrower and held for
development that meets all zoning requirements for the respective jurisdiction
and is situated within or adjacent to an existing office park or is located
within an existing Market.
"ERISA" means the Employment Retirement Income Security Act of
1974, as amended from time to time, and rules and regulations promulgated
thereunder.
"Event of Default" has the meaning set forth in Section 8.1.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided that (i) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (ii) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate quoted to the
Agent on such day on such transactions as determined by the Agent.
"Financial Covenants" has the meaning set forth in Section
3.1(a).
"Fixed Charges" means for the particular period of
calculation, the sum of Interest Expense (including accrued and capitalized
Interest Expense), Scheduled Principal Payments, and preferred stock dividends.
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"FUNB" means First Union National Bank, a national association
"Funding Date" means each date on which the Lenders make an
Advance, or, in the case of the continuation of an outstanding LIBOR Advance,
the next Business Day following the last day of the Interest Period applicable
to such outstanding LIBOR Advance.
"Funds from Operations" shall have the same meaning as that
contained in the most recently approved NAREIT definition as of July 9, 1998.
"GAAP" means generally accepted accounting principles
consistently applied.
"GFB" means Guaranty Federal Bank, F.S.B., a federal savings
bank.
"Governmental Requirements" means the requirements and
mandates of all governmental laws, statutes, rules, regulations, ordinances or
requirements, including, without limitation, regulations relating to protection
of the environment, building and construction, highway access, disability
access, asbestos, lead-based paint, zoning, land use and concurrency, and other
regulations, applicable to the ownership, development, use or operation of the
Collateral.
"Gross Asset Value" means the sum of the following and without
duplication: (a) the Borrower's (including any SPE under Section 13.12) Adjusted
EBITDA, Less Net Operating Income for the real property assets acquired during
the preceding quarter, for the most recent quarter multiplied by four and
divided by the Capitalization Rate, (b) unrestricted cash and cash equivalents,
(c) 100% of actual costs incurred in new Construction in Progress, restricted to
a maximum of 10% of Gross Asset Value, (d) acquisitions of real property assets
during the preceding quarter at their cost basis, (e) Eligible Land at its cost
basis, and (f) the Borrower's (including any SPE under Section 13.12) GAAP
investment value in ▇▇▇▇▇ Realty Services, Inc. restricted to a maximum value of
$1,500,000.
"Guarantor" means collectively, ▇▇▇▇▇ Real Estate Services,
Inc. and Southeast Properties Holding Corporation.
"Indemnification Agreement" means each Environmental
Indemnification Agreement dated the Closing Date or any Collateral Change Date
and each Amended and Restated Environmental Indemnification Agreement dated the
Closing Date or any Collateral Change Date given by Borrower to and in favor of
the Lenders with respect to the Collateral located in each State.
"Insurer" means American and Foreign Insurance Company, or
such other insurer selected by Borrower and approved by the Lenders and
otherwise authorized to
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transact business in each State and having an A.M. Best rating of "A-" or better
and an asset size rating of "IX" or better.
"Interest Period" means the 30-day, 60-day, 90-day or 180-day
period, as elected by Borrower pursuant to Section 2.2(a), for any LIBOR
Advance, commencing on the Funding Date of such LIBOR Advance, and ending on the
last date of such period elected by Borrower; provided, that the duration of any
Interest Period that begins prior to the Maturity Date but otherwise would end
after the Maturity Date shall end on the Maturity Date, and further provided,
that if the last day of such Interest Period would otherwise occur on a day that
is not a Business Day, then such last day shall be extended to the next
succeeding Business Day.
"Interest Expense" means the total consolidated interest
expense (including without limitation, capitalized interest expense and interest
expense attributable to capitalized lease obligations) with respect to any
indebtedness of Borrower and its unconsolidated Affiliates, and determined in
accordance with GAAP.
"▇▇▇▇▇ Net Square Feet" means the floor area unit measurement
utilized by Borrower in the ordinary course of its business in measuring the
floor area of an office building owned by Borrower for which Borrower ordinarily
would receive rent, as follows: (A) measurement is made from centerline of
corridor partitions and partitions separating tenants, (B) measurement is made
from centerline of glass or 3" into wall where no glass is present, for exterior
and permanent walls, and (C) no reduction in floor area is made for columns or
other projections .
"Late Charge" means an amount equivalent to the lesser of
5.00% of any scheduled payment amount or the maximum late charge permitted under
applicable laws of any State if the laws of such State are determined to govern
the Notes or this Loan Agreement.
"Leases" means any tenant leases now or hereafter in existence
in connection with the Collateral.
"Lease Assignment" means each Assignment of Leases and Rents,
and each Amended and Restated Assignment of Leases and Rents, whether
incorporated into any Security Deed or set forth in a separate document, dated
the Closing Date or any Collateral Change Date given by Borrower to and in favor
of the Agent for the benefit of the Lenders, assigning all of Borrower's
interest in the Leases and Rents relating to the Collateral located in each
State.
"Lenders" means collectively, FUNB, AmSouth, Citizens,
Compass, GFB, and their respective successors and assigns.
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"Lender's Commitment" means each Lender's proportionate share
of the Loan Amount up to which it has committed to make Advances hereunder as
set forth below:
LENDER'S COMMITMENT
LENDER LENDER COMMITMENT
FUNB $ 45,000,000.00
AmSouth $ 35,000,000.00
GFB $ 35,000,000.00
Citizens $ 20,000,000.00
Compass $ 15,000,000.00
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TOTAL $150,000,000.00
"Lenders' Counsel" means legal counsel engaged by the Lenders
from time to time in connection with the closing, administration, enforcement or
collection of the Loan.
"Lender's Percentage" means each Lender's proportionate
percentage of the Loan Amount committed to by each Lender as set forth below:
LENDER'S PROPORTIONATE PERCENTAGE INTEREST OF LOAN AMOUNT
LENDER LENDER
PERCENTAGE
First Union National Bank 30.0001%
AmSouth 23.3333%
GFB 23.3333%
Citizens 13.3333%
Compass 10.0000%
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TOTAL 100%
"Letter of Credit" has the meaning set forth in Section
2.1(b).
"Letter of Credit Documents" shall mean any and all documents
evidencing the issuance, acceptance, and drawings under a Letter of Credit.
"Letter of Credit Usage" means, at any time, the sum of (i)
the aggregate maximum amount available to be drawn under the Letters of Credit
then outstanding, assuming compliance with all requirements for drawing referred
to therein and herein, and (ii) the aggregate amount of the Borrower's unpaid
Obligations under this Agreement in respect of the Letters of Credit.
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"LIBOR" means the interest rate at which 30-day, 60-day,
90-day or 180-day deposits (as elected by Borrower) in United States dollars are
offered to prime banks in the London interbank market which appears on Reuters
Screen FRBD as of 11:00 A.M. (London time), 2 Business Days before the Funding
Date of any LIBOR Advance (or if not so reported, then as determined by FUNB
from another recognized source or interbank quotation) in an amount
approximately equal or comparable to such LIBOR Advance with a maturity equal to
such Interest Period, as adjusted for reserves by dividing that rate by 1.00
minus the Reserve Requirement, if any.
"LIBOR Advance" means any Advance bearing interest at a LIBOR
Interest Rate pursuant to Article II.
"LIBOR Interest Rate" means an annual rate of interest
calculated on the basis of a 360 day year which is equivalent to LIBOR (as
elected by Borrower) plus the applicable margin based upon ▇▇▇▇▇ Equity, Inc.'s
leverage based on the most recent quarter's Borrowing Compliance Certificate
measured on a quarterly basis in accordance with Section 3.1(a)(vi) hereunder
("Borrower's Leverage"). The applicable margins ("Applicable Margins") are as
follows:
(i) if Borrower's Leverage is equal to or less than
.30:1.00 the LIBOR Interest Rate shall equal LIBOR plus 1.30% per
annum;
(ii) if Borrower's Leverage is greater than .30:1.00 and
less than or equal to .45:1.00, the LIBOR Interest Rate shall equal
LIBOR plus 1.45% per annum; and
(iii) if Borrower's Leverage is greater than .45:1.00 and
less than or equal to .55:1.00 the LIBOR Interest Rate shall equal
LIBOR plus 1.60% per annum.
"Loan" means the revolving credit facility in an aggregate
amount up to the Loan Amount made available by the Lenders to Borrower in
accordance with the terms, covenants and conditions of this Agreement.
"Loan Amount" means $150,000,000.00 United States Dollars.
"Loan Documents" means this Agreement, the Notes, the Security
Deeds, the Lease Assignments, the Assignments of Contracts, the Indemnification
Agreements, the Guaranties, and any other instruments, documents, affidavits or
certificates given by Borrower to the Agent or any trustee for the benefit of
the Lenders in support of, or evidencing or securing, the Loan.
"Loan Term" means the term of the Loan, which shall commence
on the Closing Date and shall expire on the Maturity Date.
"Majority Lenders" means the Lenders with an aggregate amount
of at least sixty-six and 67/100 percent (66.67%) of the amount of the
Commitment then outstanding.
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"Maturity Date" means December 30, 2001.
"Maximum Swing Line Commitment" means a portion of the Loan
Amount equal to a maximum of $2,500,000.00 United States Dollars.
"Mortgage Debt Service" means the assumed principal and
interest payments on the principal outstanding under the Loan at such quarter
end when calculated on a 25 year amortization schedule and an interest rate
equal to the then prevailing ten year United States Treasury Note rate plus
1.75%. For purposes of this definition, at no time shall the interest rate be
less than 8.00% per annum.
"Net Income" means, for any period, Borrower's net income
determined in accordance with GAAP, adjusted to omit the straight line treatment
of rent.
"Net Operating Income" means, for any income producing
operating Property included in the Borrowing Base and for any given fiscal
quarter of the Borrower, the sum of the following (without duplication); (a)
Rents and other revenues received in the ordinary course of operating such
Property (including proceeds of rent loss insurance) minus (b) all expenses paid
or accrued related to the ownership, operation or maintenance of such Property,
including but not limited to taxes, assessments and the like, insurance,
utilities, payroll costs, maintenance, repair and landscaping expenses and
on-site marketing expenses, minus (c) property management fees, if any, paid or
accrued in respect of such Property during such period and plus or minus (d) an
adjustment to omit the straight-line treatment of Rents.
"Notice of Borrowing" means any written notice given by
Borrower to the Lenders from time to time requesting an Advance or continuing
any outstanding Advance for an additional Interest Period, if applicable,
specifying the requested Funding Date, the requested Interest Period, the
requested amount of such Advance, and the interest rate elected by Borrower for
such Advance.
"Notes" means collectively (i) the Substitution Revolving
Promissory Note dated as of the Closing Date made by Borrower payable to the
order of FUNB in the original principal amount of $45,000,000, (ii) the
Substitution Revolving Promissory Note dated as of the Closing Date made by
Borrower payable to the order of AmSouth in the original principal amount of
$35,000,000, (iii) the Substitution Revolving Promissory Note dated as of the
Closing Date made by Borrower payable to the order of GFB in the original
principal amount of $35,000,000, (iv) the Revolving Promissory Note dated as of
the Closing Date made by Borrower payable to the order of Citizens in the
original principal amount of $20,000,000, and (v) the Revolving Promissory Note
dated as of the Closing Date made by Borrower payable to the order of Compass in
the original principal amount of $15,000,000, together with any renewals,
modifications or extensions of any of the foregoing.
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"Obligations" means each and every payment and performance
covenant, condition or agreement of Borrower to or in favor of the Lenders, or
the Agent or any trustee for the benefit of the Lenders under the Loan
Documents, including, without limitation, Borrower's obligation to repay the
Advances, together with interest accrued thereon, in accordance with this
Agreement and the other Loan Documents.
"Person" means any individual, corporation, trust,
unincorporated organization, governmental authority or any other form of entity.
"Plan" means any plan defined in Section 4021(a) of ERISA in
respect of which Borrower or any Subsidiary is an "employer" or a "substantial
employer" as said terms are defined in Section 3(5) and 40041(a)(2),
respectively, of ERISA.
"Principal Advance" means any disbursement of principal out of
the available undisbursed Loan Amount by the Lenders to Borrower.
"Property" means any interest in any kind of property or
asset, whether real, leasehold, personal or mixed, tangible or intangible.
"REIT" means a Real Estate Investment Trust under ss.856-860
of the Code.
"Rents" means all rents, profits, issues, income and royalties
received from the Leases or otherwise in connection with the Collateral.
"Rent Roll" means a document, certified by Borrower to be
complete and correct, identifying all leases on any property that is or will
become Collateral, the identity of the tenants thereunder, the location and
floor area (both ▇▇▇▇▇ Net Square Feet and leased area) of the leased premises
thereunder, and the rent for the leased premises thereunder, and all other
information pertaining to such leases as the Lenders shall require.
"Replacement Reserves" means the greater of (1) an allowance
for a normal level of recurring capital expenditures and lease commissions equal
to (i) $1.25 per ▇▇▇▇▇ Net Square Feet per year, multiplied by (ii) the total
current ▇▇▇▇▇ Net Square Footage of all Properties owned by the Borrower with a
certificate of occupancy or its equivalent or (2) actual expenditures (excluding
new building, major renovation or rehabilitation and building acquisitions) and
lease commissions for the most recent four (4) quarters. For purposes of this
definition, the calculation of replacement reserves with respect to cash flow
coverage tests shall be based on the weighted average ▇▇▇▇▇ Net Square Footage
for the respective measurement period. Actual capital expenditures shall not
include costs associated with first generation space.
"Reportable Event" means any of the events set forth in
Section 4043(b) of ERISA.
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"Reserve Requirement" means the maximum percentage reserve
requirement, if any, applicable to FUNB or any other Lender (rounded to the next
higher 1/100 of 1% and expressed as a decimal) in effect for any day during the
Interest Period under the Federal Reserve Board's Regulation D for Eurocurrency
Liabilities as defined therein.
"Scheduled Principal Payments" means all regularly scheduled,
non-balloon payments of principal on Total Debt and capital leases, plus
Interest Expense incurred with respect to subordinated Total Debt.
"SEC" means the federal Securities and Exchange Commission.
"Security Agreement" means each Security Agreement and each
Amended and Restated Security Agreement, whether incorporated into any Security
Deed or set forth in a separate document, or any amendment or modification
thereto, dated the Closing Date or any Collateral Change Date given by Borrower
to and in favor of the Agent for the benefit of the Lenders, granting to the
Agent a first lien and security interest in that portion of the Collateral
located in each State that constitutes tangible and intangible personal
property.
"Security Deed" means each Deed to Secure Debt, Amended and
Restated Deed to Secure Debt, Deed of Trust, Amended and Restated Deed of Trust,
Assignment of Leases and Rents and Security Agreement, Mortgage, Assignment of
Leases and Rents and Security Agreement, Amended and Restated Mortgage and
Security Agreement, or any modification or amendment thereof, dated the Closing
Date or any Collateral Change Date given by Borrower to and in favor of the
Agent or a trustee for the benefit of the Lenders, granting to the Agent or such
trustee a first lien and security interest or absolute title interest in that
portion of the Collateral located in each State that constitutes real property,
easements and appurtenances thereto, and improvements and fixtures, and
sometimes incorporating a Security Agreement and/or Lease Assignment.
"Shareholders' Equity" means, at any date, Borrower's
stockholders' equity (determined on a book basis), less its Intangible Assets,
as determined as of such date. For purposes of this definition, "Intangible
Assets" means with respect to any such intangible assets, (i) the amount (to the
extent reflected in determining such stockholders' equity) of all write-ups
(other than write-ups resulting from foreign currency translations and write-ups
of assets of a going concern business made within 12 months after the
acquisition of such business) subsequent to December 31, 1996, in the book value
of any asset (other than real property assets) owned by Borrower, and (ii)
goodwill, patents, trademarks, service marks, trade names, anticipated future
benefit of tax loss carry forwards, copyrights, organization or developmental
expenses and other intangible assets.
"State" means each state in which the Collateral is located.
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"Stated Amount" means the stated amount of any Letter of
Credit issued hereunder.
"Subsidiary"means the corporations described on attached
Exhibit G, which corporations are wholly-owned subsidiaries of Borrower,
together with any other direct or indirect subsidiary of Borrower which falls
within the meaning of "significant subsidiary" for federal securities law
purposes (except for purposes of Section 6.1 wherein Subsidiary shall mean only
those Subsidiaries listed on attached Exhibit G).
"Summary Requirements" means the Summary Requirements for
Additions to Collateral Pool Properties attached as Exhibit B.
"Swing Line Advance" means an advance made by any Swing Line
Bank pursuant to Section 2.3.
"Swing Line Bank" means the Agent in its capacity as Swing
Line Bank hereunder or any successor thereto as provided herein.
"Swing Line Borrowing" means a borrowing consisting of a Swing
Line Advance made by the Swing Line Bank.
"Swing Line Note" means that certain Swing Line Promissory
Note of even date herewith in the amount of $2,500,000.00 from Borrower to Swing
Line Bank.
"Title Commitment" has the meaning set forth in Section
4.3(b).
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"Total Debt" means all obligations and liabilities of the
Borrower on a fully consolidated basis, determined in accordance with GAAP,
including capital leases, mortgage payables, notes payable, senior notes,
convertible debentures, subordinated debentures, and secured or unsecured debt
owed to banks or other financial institutions. Total Debt shall also include the
Borrower's: (a) obligations under all letters of credit including Letters of
Credit issued hereunder, (b) guarantees of indebtedness, (c) loans where the
Borrower is liable for debt as a general partner, and (d) the Borrower's pro
rata share of debt in unconsolidated Affiliates.
"Total Debt Service" means, for any period, an amount equal to
the sum of (i) Interest Expense (whether paid, accrued or capitalized) actually
payable by Borrower on its Total Debt, and (ii) Scheduled Principal Payments on
such Total Debt, whether or not paid by Borrower (excluding balloon payments).
"Title Insurer" means Lawyers Title Insurance Company, and its
authorized title agents in each State.
"Undeveloped Land" means Eligible Land and all other
separately divided undeveloped land held for either development or resale at its
cost.
"Unhedged Variable Rate Debt" means all Debt with a variable
rate of interest that is not contractually swapped into a fixed rate of interest
for a period in excess of one (1) year.
"Unused Fee" means a non-refundable fee determined in
accordance with the following Applicable Margins defined in the calculation of
LIBOR Interest Rate hereunder:
(i) if the Applicable Margin is 1.30% per annum,
then the applicable Unused Fee is .15% per annum;
(ii) if the Applicable Margin is 1.45% per annum,
then the applicable Unused Fee is .20% per annum; or
(iii) if the Applicable Margin is 1.60% per annum,
then the applicable Unused Fee is .20% per annum;
of the aggregate weighted average of each Lender's Commitment which is available
but undisbursed during the immediately preceding calendar quarter, based on the
difference between (a) such Lender's Commitment (or weighted average thereof
during such calendar quarter if such Lender's Commitment changes during such
calendar quarter), and (b) the weighted average of such Lender's Percentage of
outstanding Advances during such calendar quarter. For the purposes of
calculation of the Unused Fee, any Swing Line Advances will not reduce the
Unused Fee otherwise owed any Lender other than the
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Swing Line Bank, and each Lender's Commitment (except as reduced by outstanding
Advances) will continue to be considered available, notwithstanding any
limitations on Borrower's ability to borrow Advances hereunder.
SECTION 1.2 Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP, consistently applied,
except as otherwise stated herein.
ARTICLE 2
AMOUNT AND TERMS OF ADVANCES
SECTION 2.1 Advances.
(a) Advances. Subject to the terms and conditions of this
Agreement, each Lender severally agrees to make Advances prior to the Maturity
Date to the Borrower not to exceed each Lender's Commitment. Each such request
for an Advance by Borrower shall be deemed a request for an Advance from each
Lender equal to such Lender's Percentage of the aggregate amount so requested,
and such aggregate amount shall be in an amount at least equal to $1,000,000.00
and equal to an integral multiple of $500,000.00. Each principal repayment of
the Loan shall be deemed a repayment of each Lender's aggregate Advances equal
to such Lender's Percentage of the amount so repaid. The obligations of the
Lenders hereunder are several and not joint, and the preceding three sentences
will give rise to certain inappropriate results if special provisions are not
made to accommodate the failure of a Lender to fund an Advance as and when
required by this Agreement; therefore, notwithstanding anything herein to the
contrary, (A) no Lender shall be required to make Advances at any one time
outstanding in excess of such Lender's Percentage of the Commitment, and (B) if
a Lender fails to make an Advance as and when required hereunder (a "Defaulting
Lender") and Borrower subsequently makes a principal repayment of the Loan, such
principal repayment shall be divided among the remaining Lenders which are not
Defaulting Lenders ratably in accordance with their respective Lender's
Percentages until each Lender has its Lender's Percentage of all of the
outstanding Advances, and the balance of such principal repayment shall be
divided among all of the Lenders in accordance with their respective Lender's
Percentages. The Advances shall be evidenced by the Notes.
(b) Letter of Credit. Subject to the terms and conditions of
Section 2.1(a), each Lender severally agrees that it will participate with the
Agent in the issuance of one or more letters of credit by the Agent on behalf of
the Borrower during the period from and including the date of execution of this
Agreement to, but excluding, the date which is sixty (60) days prior to the
Maturity Date(each a "Letter of Credit"). Letter of Credit Usage shall not at
any time exceed ten percent (10%) of the Loan Amount (the "L/C Commitment
Amount"). All Letters of Credit shall be treated as Advances hereunder and
together with any Principal Advances outstanding at any time shall not in the
aggregate exceed the Loan Amount. A fee equivalent to ▇▇▇▇▇ Equity, Inc.'s then
current Applicable Margin (used in the
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calculation of the applicable LIBOR Interest Rate hereunder) in arrears for all
Letters of Credit will be due and payable at the end of each fiscal quarter of
▇▇▇▇▇ Equity, Inc., to the Agent for the account of the Lenders. Additionally,
Borrower shall also pay an issuance fee of .125% for each Letter of Credit,
which fee shall be due and payable to the Agent upon issuance thereof.
(c) Terms of Letters of Credit. At the time of issuance, the
amount, form, terms and conditions of each Letter of Credit, and of any drafts
or acceptances thereunder, shall be subject to approval by the Agent and the
Borrower. Notwithstanding the foregoing, in no event may the expiration date of
any Letter of Credit extend beyond the date 30 days prior to the Maturity Date,
and any Letter of Credit containing an automatic renewal provision shall also
contain a provision pursuant to which, notwithstanding any other provisions
thereof, if shall have a final expiration date no later than the date 30 days
prior to the Maturity Date.
(d) Requests for Issuance of Letter of Credit . The Borrower shall
give the Agent written notice (or telephonic notice promptly confirmed in
writing) no later than 9:00 a.m. two (2) Business Days prior to the requested
date of issuance of a Letter of Credit, such notice to describe in reasonable
detail the proposed terms of such Letter of Credit and shall set forth with
respect to such Letter of Credit (i) the proposed initial Stated Amount, (ii)
the beneficiary or beneficiaries, (iii) whether such Letter of Credit is a
commercial or standby letter of credit and (iv) the proposed expiration date.
The Borrower shall also execute and deliver such customary letter of credit
application forms as requested from time to time by the Agent. Provided the
Borrower has given the notice prescribed by this subsection and subject to the
other terms and conditions of this Agreement, including, without limitation, the
satisfaction of any applicable conditions precedent set forth in Article III or
any terms and conditions restricting Advances, the Agent shall issue the
requested Letter of Credit on the requested date of issuance. The Agent shall
promptly provide notice to the Lenders of the issuance of any Letter of Credit
issued hereunder, which notice shall set forth each Lender's Percentage of (1)
such Letter of Credit and (2) all Letters of Credit then outstanding. Upon the
written request of the Borrower, the Agent (x) shall make reasonable efforts to
deliver to the Borrower a copy of any Letter of Credit proposed to be issued
hereunder prior to the issuance thereof and (y) shall deliver to the Borrower a
copy of each issued Letter of Credit within a reasonable time after the date of
issuance thereof. To the extent any term of a Letter of Credit Document is
inconsistent with a term of any Loan Document, the term of such Loan Document
shall control.
(e) Reimbursement Obligations. Upon receipt by the Agent of the
proper documentation for the right to draw from the beneficiary of a Letter of
Credit of any demand for payment under such Letter of Credit, the Agent shall
promptly notify each of the Lenders of the amount of each Lender's Percentage
for such payment. Each Lender shall then promptly pay the Agent its Lender's
Percentage of the Stated Amount of such Letter of Credit in the same manner as
each Lender Percentage of any Advance hereunder is funded. The Agent shall then
pay the Stated Amount of such Letter of Credit to the beneficiary thereof, in
the same manner as all Advances hereunder are funded to the
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Borrower. All of the terms of this Agreement which pertain to the funding of
Advances hereunder shall apply to all Letters of Credit, unless specifically
herein stated to the contrary.
(f) Effect of Letters of Credit on Commitments. Upon the issuance
by the Agent of any Letter of Credit and until such Letter of Credit shall have
expired or been terminated, each Lender Commitment shall be reduced for all
purposes of this Agreement in an amount equal to such Lender's Percentage of the
Stated Amount of such Letter of Credit.
(g) Agent's Duties Regarding Letters of Credit; Unconditional
Nature of Reimbursement Obligation. In examining documents presented in
connection with drawings under Letters of Credit and making payments under such
Letters of Credit against such documents, the Agent shall use the same standard
of care as it uses in connection with examining documents presented in
connection with drawings under letters of credit in which it has not sold
participations and making payments under such letters of credit. The Borrower
assumes all risks of the acts and omissions of, or misuse of the Letters of
Credit by, the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, neither the Agent nor any of
the Lenders shall be responsible for (i) the form, validity, sufficiency,
accuracy, genuineness or legal effects of any document submitted by any party in
connection with the application for and issuance of or any drawing honored under
any Letter of Credit even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit, or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) failure of the beneficiary of any
Letter of Credit to comply fully with conditions required in order to draw upon
such Letter of Credit; (iv) errors, omissions, interruptions or delays in
transmission or delivery of any messages by others, whether by mail, cable,
telex, telecopy or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay by others in the
transmission or otherwise of any document required in order to make a drawing
under any Letter of Credit, or of the proceeds thereof; (vii) the misapplication
by the beneficiary of any such Letter of Credit, or the proceeds of any drawing
under such Letter of Credit; or (viii) any consequences arising from causes
beyond the control of the Agent or the Lenders. None of the above shall affect,
impair or prevent the vesting of any of the Agent's rights or powers hereunder.
Any action taken or omitted to be taken by the Agent under or in connection with
any Letter of Credit, if taken or omitted in the absence of gross negligence or
willful misconduct, shall not create against the Agent any liability to the
Borrower or any Lender. In this connection, the obligation of the Borrower to
reimburse the Agent for any drawing made under any Letter of Credit shall be
absolute, unconditional and irrevocable and shall be paid strictly in accordance
with the terms of this Agreement under all circumstances whatsoever, including
without limitation, the following circumstances: (A) any lack of validity or
enforceability of any Letter of Credit Document or any term or provisions
therein; (B) any amendment or waiver of or any consent to departure from all or
any of the Letter of Credit Documents; (C) the existence of any claim, set-off,
defense or other right which the Borrower may have at any time
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against the Agent, any Lender, any beneficiary of a Letter of Credit or any
other Person, whether in connection with this Agreement, the transactions
contemplated hereby or in the Letter of Credit Documents or any unrelated
transaction; (D) any breach of contract or dispute between the Borrower, the
Agent, any Lender or any other Person; (E) any demand, statement or any other
document presented under a Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein or made in
connection therewith being untrue or inaccurate in any respect whatsoever; (F)
any non-application or misapplication by the beneficiary of a Letter of Credit
of the proceeds of any drawing under such Letter of Credit; (G) payment by the
Agent under the Letter of Credit against presentation of a draft or certificate
which does not strictly comply with the terms of the Letter of Credit; and (H)
any other act, omission to act, delay or circumstance whatsoever that might, but
for the provisions of this Section, constitute a legal or equitable defense to
or discharge of the Borrower's reimbursement obligations.
(h) Amendments, Etc. The issuance by the Agent of any amendment,
supplement or other modification to any Letter of Credit shall be subject to the
same conditions applicable under this Agreement to the issuance of new Letters
of Credit (including, without limitation, that the request therefor be made
through the Agent), and no such amendment, supplement or other modification
shall be issued unless either (i) the respective Letter of Credit affected
thereby would have complied with such conditions had it originally been issued
hereunder in such amended, supplemented or modified form or (ii) the Majority
Lenders shall have consented thereto; provided, however, no such amendment,
supplement or modification shall result in the extension of the expiration date
of the Letter of Credit without the Majority Lenders' prior written consent.
(i) Lenders' Participation in Letters of Credit. Immediately upon
the issuance by the Agent of any Letter of Credit each Lender shall be deemed to
have irrevocably and unconditionally purchased and received from the Agent,
without recourse or warranty, an undivided interest and participation to the
extent of such Lender's Percentage of the liability of the Agent with respect to
such Letter of Credit and each Lender thereby shall absolutely, unconditionally
and irrevocably assume, as primary obligor and not as surety, and shall be
unconditionally obligated to the Agent to pay and discharge when due, such
Lender's Percentage of the Agent's liability under such Letter of Credit.
(j) Information to Lenders. Upon the request of any Lender from
time to time, the Agent shall deliver to such Lender information reasonably
requested by such Lender with respect to any Letter of Credit then outstanding.
Other than as set forth in this subsection or in the preceding subsection (d),
the Agent shall have no duty to notify the Lenders regarding the issuance or
other matters regarding Letters of Credit issued hereunder. The failure of the
Agent to perform its requirements under this subsection or such subsection (d)
shall not relieve any Lender from any of its obligations hereunder.
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SECTION 2.2 Making Advances.
(a) Each Advance shall be made (or continued for an additional
Interest Period, if applicable), following a Notice of Borrowing received by
Agent not later than 2:00 P.M. (Eastern Standard Time) on (i) in the case of a
LIBOR Advance, the 4th Business Day prior to, or (ii) in the case of a Base Rate
Advance, the 2nd Business Day prior to, the requested Funding Date (which
requested Funding Date must be a Business Day); provided, however, that:
(1) if Borrower fails to elect any particular interest
rate, or if the requested Funding Date is less than 4 Business Days
following such Notice of Borrowing, Borrower shall be deemed to have
elected the Base Rate; and
(2) Borrower shall have delivered to Agent the statements
referred to in Section 3.1(c) prior to or concurrently with the
applicable Notice of Borrowing described above.
(b) Each Notice of Borrowing shall be irrevocable and binding on
Borrower. Following any Notice of Borrowing, Borrower indemnifies and agrees to
hold the Lenders harmless from and against any loss, cost or expense incurred by
the Lenders as a result of any failure by Borrower to complete the borrowing
specified in such Notice of Borrowing (whether or not due to a failure to
fulfill on or before the date specified in such Notice of Borrowing the
applicable conditions set forth in Article III), such losses, costs and expenses
to include, without limitation, any loss (including loss of anticipated
profits), cost or expense incurred by reason of the liquidation or reemployment
of deposits or other funds acquired by the Lenders to fund the Advance, when
such Advance, as a result of such failure, is not made on the date requested for
such Advance.
(c) Subject to fulfillment of the applicable conditions set forth
in this Article II and Article III below, each Lender will make available its
Lender's Percentage of the Advance not later than 12:00 P.M. (Eastern Standard
Time) in the amount and on the Funding Date requested for such Advance in
same-day funds to the Agent at Agent's office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, by wire transfer of such Advance for the account of
Borrower. The Agent shall then make the Advance to the Borrower not later than
2:00 P.M. (Eastern Standard Time) in the amount and on the Funding Date
requested for such Advance in same day funds by intra-bank transfer to
Borrower's account maintained at FUNB, or by wire transfer to such other account
as Borrower shall so direct by written notice to FUNB.
(d) LIBOR Advances shall be subject to the following additional
conditions:
(1) if, at any time, (A) a Lender shall determine that,
by reasons of circumstances affecting foreign exchange and interbank
markets generally, LIBOR deposits in the applicable amounts are not
being offered to the Lender, or (B) the introduction of or any change
in or in the interpretation (including reversals) of any law or
regulation makes it unlawful, or any central bank or governmental
authority asserts that it is unlawful, for any Lender to obtain funds
in the London interbank
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market to fund or maintain a LIBOR Advance or otherwise to perform its
obligations hereunder with respect to any such Advance, then such
Lender's obligation to make or maintain any LIBOR Advance, and the
right of Borrower to select any LIBOR Interest Rate, shall be suspended
until the circumstances causing such suspension no longer exist, and
the applicable LIBOR Interest Rate for any outstanding LIBOR Advance
shall immediately be converted to the Base Rate for such LIBOR Advance
for the remainder of the Interest Period;
(2) LIBOR Advances may be repaid or prepaid only on the
last Business Day of the Interest Period applicable to such Advance.
Borrower may elect to maintain any outstanding LIBOR Advance for an
additional Interest Period by delivering a Notice of Borrowing to Agent
making such election within the time period required for such notices
as set forth in this Section 2.2. If any LIBOR Advance is not repaid or
prepaid on the last Business Day of the Interest Period, and Borrower
has not otherwise timely delivered a Notice of Borrowing electing to
continue such LIBOR Advance for an additional Interest Period elected
by Borrower in such Notice of Borrowing, Borrower will be deemed to
have elected to maintain such Advance outstanding as a Base Rate
Advance. If, as a result of a payment made by Borrower due to
acceleration of the maturity of the Notes pursuant to Section 8.2 or
due to any other reason, the Lenders receive payment of any principal
amount of any LIBOR Advance on a day other than the last day of the
Interest Period for such LIBOR Advance, or Borrower fails to make any
payment of principal outstanding under any LIBOR Advance when due under
the Notes, Borrower shall pay to Agent on demand that amount, if any,
required to compensate the Lenders, as reasonably calculated by each
Lender, for additional losses, costs or expenses which the Lenders may
incur as a result of such payment or nonpayment, including, without
limitation, any loss (including loss of anticipated profits), cost or
expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by the Lenders to fund or maintain
such LIBOR Advance.
SECTION 2.3 Swing Line Advances.
(a) Swing Line Loans. Subject to the terms and conditions hereof,
the Swing Line Bank agrees to make Swing Line Advances to Borrower from the date
hereof to the Business Day preceding the Maturity Date in an aggregate principal
amount at any one time outstanding up to, but not exceeding, the amount of the
Maximum Swing Line Commitment. If at any time the aggregate principal amount of
the Swing Line Borrowings outstanding at such time exceeds the Maximum Swing
Line Commitment in effect at such time, Borrower shall immediately pay the Swing
Line Bank the amount of such excess. Subject to the terms and conditions of this
Agreement, Borrower may borrow, repay and reborrow Swing Line Advances
hereunder. Swing Line Borrowing shall not constitute usage of any Lender's
Commitment, except from the Swing Line Bank.
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(b) Procedure for Borrowing Swing Line Loans. The Borrower shall
give the Agent and the Swing Line Bank notice pursuant to a Notice of Swing Line
Borrowing in the form shown on attached Exhibit C (a "Notice of Swing Line
Borrowing") delivered to the Swing Line Bank no later than 9:00 a.m. on the
proposed date of such borrowing, provided that Borrower shall have given
telephonic notice to the Swing Line Bank no later than 9:00 a.m. of the proposed
date of borrowing. Any such telephonic notice shall include all information to
be specified in a written Notice of Swing Line Borrowing. Not later than 11:00
a.m. on the date of the requested Swing Line Advance and subject to satisfaction
of the applicable conditions set forth in Article III, for all Advances
hereunder, the Swing Line Bank will make the proceeds of such Swing Line Advance
available to Borrower, in immediately available funds, at the account specified
by Borrower in the Notice of Swing Line Borrowing.
(c) Interest. All Swing Line Borrowings shall bear interest at a
per annum rate equal to (i) the Base Rate as in effect from time to time, or
(ii) at such other rate or rates as Borrower and the Swing Line Bank may agree
from time to time in writing. Interest payable on Swing Line Borrowings is
solely for the account of the Swing Line Bank. All accrued and unpaid interest
on Swing Line Borrowings shall be payable on the dates and in the manner
provided in Section 2.5, with respect to interest on Base Rate Advances (except
as the Swing Line Bank and Borrower may otherwise agree in writing in connection
with any particular Swing Line Advance).
(d) Swing Line Borrowing Amounts, Etc. Each Swing Line Borrowing
shall be in the minimum amount of $500,000 and integral multiples of $100,000 in
excess thereof or such other minimum amounts agreed to by the Swing Line Bank
and Borrower. Any voluntary prepayment of a Swing Line Borrowing must be in
integral multiples of $100,000 or the aggregate principal amount of all
outstanding Swing Line Borrowings (or such other minimum amounts upon which the
Swing Line Bank and Borrower may agree) and in connection with any such
prepayment, Borrower must give the Swing Line Bank prior written notice thereof
no later than 10:00 a.m. one Business Day prior to the date of such prepayment.
The Swing Line Borrowing shall, in addition to this Agreement, be evidenced by
the Swing Line Note.
(e) Repayment and Participations of Swing Line Borrowing. The
Borrower agrees to repay each Swing Line Advance within one Business Day of
demand therefor by the Swing Line Bank and in any event, within five (5)
Business Days after the date such Swing Line Advance was made. Notwithstanding
the foregoing, Borrower shall repay the entire outstanding principal amount of,
and all accrued but unpaid interest on, all Swing Line Borrowings on the
Maturity Date (or such earlier date as the Swing Line Bank and Borrower may
agree in writing). In lieu of demanding from Borrower repayment of any
outstanding Swing Line Borrowings, the Swing Line Bank may, on behalf of
Borrower (which hereby irrevocably directs the Swing Line Bank to act on its
behalf), request a borrowing of a Base Rate Advance from the Lenders in an
amount equal to the principal balance of such Swing Line Borrowing. Each Lender
will make available to the Agent for the account of the Swing Line Bank, in
immediately available funds not later than 9:00 a.m.
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on the proposed date of such borrowing, the proceeds of the Base Rate Advance to
be made by such Lender, in the amount of each Lender's Percentage of such Base
Rate Advance. The Agent shall apply such proceeds to repay such Swing Line
Borrowing. If the Lenders are prohibited from making Advances required to be
made under this subsection for any reason whatsoever, including without
limitation, the occurrence of any of the Defaults or Events of Default described
in Section 8.1, each Lender shall purchase from the Swing Line Bank, without
recourse or warranty, an undivided interest and participation to the extent of
such Lender's Percentage of such Swing Line Borrowing, by directly purchasing a
participation in such Swing Line Borrowing in such amount and paying the
proceeds thereof to the Swing Line Bank in immediately available funds. A
Lender's obligation to purchase such a participation in a Swing Line Borrowing
shall be absolute and unconditional and shall not be affected by any
circumstance whatsoever, including without limitation, (i) any claim of setoff,
counterclaim, recoupment, defense or other right which such lender or any other
Person may have or claim against the Agent, the Swing Line Bank or any other
Person whatsoever, (ii) the occurrence or continuation of a Default or Event of
Default (including without limitation, any of the Defaults or Events of Default
described in Section 8.1 or the termination of any Lender's Commitment, (iii)
any breach of any Loan Document by the Agent, any Lender or Borrower or (iv) any
other circumstance, happening or event whatsoever, whether or not similar to any
of the foregoing. If any Lender shall fail to make available to the Swing Line
Bank the purchase price of any such participation, the Swing Line Bank shall be
entitled to recover such amount on demand from such Lender, together with
accrued interest thereon for each day from the date of demand thereof, at the
Base Rate. If such Lender does not pay such amount forthwith upon the Swing Line
Bank's demand therefor, and until such time as such Lender makes the required
payment, the Swing Line Bank shall be deemed to continue to have outstanding
Swing Line Advances in the amount of such unpaid participation obligation for
all purposes of the Loan Documents (other than those provisions requiring the
other Lenders to purchase a participation therein). Further, such Lender shall
be deemed to have assigned any and all payments made of principal and interest
on its Advances, and any other amounts due to it hereunder, to the Swing Line
Bank to fund Swing Line Borrowings in the amount of the participation in Swing
Line Borrowings that such Lender failed to purchase pursuant to this Section
until such amount has been purchased (as a result of such assignment or
otherwise). All payments of principal, interest, fees and other amounts in
respect of the Swing Line Borrowings shall be for the account of the Swing Line
Bank only (except to the extent any Lender shall have acquired a participating
interest in any such Swing Line Borrowings pursuant to this subsection).
SECTION 2.4 Fees.
(a) After the Closing Date, in consideration for the Lenders'
reservation of funds for availability for borrowing under the Loan, Borrower
shall pay the Unused Fee to the Agent for the Lenders in arrears at the end of
each calendar quarter.
(b) In consideration of the Lenders' issuance of Letters of Credit
hereunder, Borrower shall pay to Agent for the account of the Lenders, in
arrears, at the end of each
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fiscal quarter of ▇▇▇▇▇ Equity, Inc., a fee equivalent to ▇▇▇▇▇ Equity, Inc.'s
then current Applicable Margin multiplied by the aggregate Stated Amount of all
outstanding Letters of Credit.
(c) Borrower shall pay Agent, for the account of Agent only, an
issuance fee of .125% for each Letter of Credit, which fee shall be due and
payable to the Agent upon issuance thereof.
SECTION 2.5 Repayment of Advances; Prepayments.
(a) Interest only, computed daily on the outstanding principal
balance of the Loan, shall be due monthly on the 10th day of each calendar month
for the preceding calendar month, and shall be paid to Agent. On the Maturity
Date, the entire outstanding principal balance of the Loan, together with all
accrued and unpaid interest thereon, and late fees and other charges, if any,
payable by Borrower under the Loan Documents, shall be due and payable in full,
and shall be paid to Agent. Any payment of interest which is not made within 10
days following its due date or such longer period as may be required under
applicable laws of any State if the laws of such State are determined to govern
this Agreement, shall be subject to a Late Charge, which shall be due and
payable contemporaneously with such payment of interest.
(b) During the Loan Term, the Loan Amount may be borrowed, repaid
and reborrowed on a revolving basis, provided, that prior to the Maturity Date,
the outstanding principal balance of the Loan shall never be less than $1,000.00
nor greater than the maximum principal amount permitted to be borrowed under the
Loan pursuant to the Financial Covenants. Each prepayment of any of the
outstanding principal amount shall be in a minimum amount of $1,000,000 and
integral multiples of $500,000 thereafter. Repayments of the outstanding
principal amount of any Advance may be made on any Business Day, provided, that
repayments received after 11:00 A.M. (Eastern Standard Time) shall not be
credited to Borrower's account until the next Business Day, and further
provided, unless Borrower prior to or contemporaneously with such repayment
designates in writing to Agent the Advance that should be credited with such
repayment, such repayment shall be applied to repayment of Advances on a
"first-borrowed first-repaid" basis. Repayment of any LIBOR Advance on any day
other than the maturity of the Interest Period applicable to such LIBOR Advance
may be subject to a charge pursuant to Section 2.2(d), payable by Borrower to
Agent at the time of such repayment. Repayment of any Base Rate Advance may be
repaid without penalty or premium.
(c) If the Agent receives a payment of interest or a prepayment of
principal for the account of the other Lenders prior to 11:00 A.M. (Eastern
Standard Time) on any Business Day, a pro rata portion of such payment must be
delivered to each other Lender based upon each Lender's Percentage in the
Advances made to date. If a payment of principal or interest is not received by
Agent until after 11:00 A.M. (Eastern Standard Time) on any Business Day, the
payment of each Lender's Percentage share of such payment shall be delivered to
the Lenders and credited to the Borrower on the next Business Day.
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If a payment of principal or interest is received by the Agent between 11:00
A.M. (Eastern Standard Time) and 2:00 P.M. (Eastern Standard Time) on any
Business Day, in the event any Lender's Percentage share of such payment is not
paid to such Lender until the next Business Day, then Agent shall pay such
Lender interest at the Federal Funds Rate on such Lender's Percentage of the
payment for such day.
(d) Except to the extent otherwise provided herein: (a) each
borrowing from the Lenders under Section 2.1 hereof shall be made ratably from
the Lenders on the basis of their respective Lender Percentages; and (b) each
payment by the Borrower of principal or interest on the Loan or on any other
sums advanced by the Lenders pursuant to the Loan Documents, and of any other
amount owed to the Lenders shall be made to the Agent for the account of the
Lenders based upon each Lender's Percentage in the respective unpaid principal
amounts of the Loans held by the Lenders.
(e) Unless the Agent shall have been notified by a Lender or the
Borrower (the "Payor") prior to the date on which such Lender is to make payment
to the Agent of the proceeds of an Advance to be made by it hereunder or the
Borrower is to make a payment to the Agent for the account of one or more of the
Lenders, as the case may be (such payment being herein called the "Required
Payment"), which notice shall be effective upon receipt, that the Payor does not
intend to make the Required Payment to the Agent, the Agent may assume that the
Required Payment has been made and may, in reliance upon such assumption (but
shall not be required to), make the amount thereof available to the intended
recipient on such date and, if the Payor has not in fact made the Required
Payment to the Agent, the recipient of such payment shall, on demand, pay to the
Agent the amount made available by the Agent together with interest thereon in
respect of the period commencing on the date such amount was so made available
by the Agent until the date the Agent recovers such amount at a rate per annum
equal to (a) the Default Rate for such period if the recipient returning a
Required Payment is the Borrower, or (b) the Federal Funds Rate for such period
if the recipient returning a Required Payment is the Agent or a Lender.
(f) The Borrower agrees that, in addition to (and without
limitation of) any right of set-off, bankers' lien or counterclaim a Lender may
otherwise have, each Lender shall be entitled, at its option (and without regard
to the adequacy of other collateral) to offset balances held by it for the
account of the Borrower at any of its offices, against any principal of or
interest on any of such Lender's Advances to the Borrower hereunder, or other
Obligations of the Borrower hereunder, which is not paid (regardless of whether
such balances are then due to the Borrower), in which case it shall promptly
notify the Borrower and the Agent thereof, provided that such Lender's failure
to give such notice shall not affect the validity thereof. If a Lender shall
obtain payment of any principal of or interest on any Advance made by it under
this Agreement then due to such Lender hereunder, through the exercise of any
right of set-off, banker's lien, counterclaim or similar right, or otherwise it
shall promptly purchase from the other Lenders portions of the Advances made or
other Obligations held by the other Lenders in such amounts, and make such other
adjustments from time to time as shall be equitable to the end that all the
Lenders
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shall share the benefit of such payment (net of any expenses which may be
incurred by such Lender in obtaining or preserving such benefit) in accordance
with each Lender's Percentage. To such end all the Lenders shall make
appropriate adjustments among themselves (by the resale of participations sold
or otherwise) if such payment is rescinded or must otherwise be restored.
Nothing contained herein shall require any Lender to exercise any such right or
shall affect the right of any Lender to exercise, and retain the benefits of
exercising, any such right with respect to any other indebtedness or Obligation
of the Borrower.
SECTION 2.6 Interest Rate; Default Rate.
(a) The amount of each Advance shall accrue interest, at
Borrower's election, at a LIBOR Interest Rate or the Base Rate. Borrower shall
be entitled to elect the applicable LIBOR Interest Rate (which interest rate
will vary based on Interest Period selection and the Borrower's Leverage at the
time of any Advance) or the Base Rate for any Advance under and subject to the
conditions set forth in Section 2.2, provided that not more than 5 separate
LIBOR Interest Rates (which interest rates will vary based on Interest Period
selection and the Borrower's Leverage at the time of any Advance) and the Base
Rate, shall be applicable to Advances at any one time that such Advances are
outstanding.
(b) Following an Event of Default, the amount of each Advance
shall, at the Lenders' option, without notice to Borrower accrue interest from
the date of Default at the Default Rate.
SECTION 2.7 Payments and Computations. Borrower shall make each
payment under any Loan Document not later than 11:00 A.M. (Eastern Standard
Time) on the day when due in lawful money of the United States of America to
Agent, at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ in
immediately available funds. All computations of interest under the Notes and
hereunder, other than the computation of interest at the Base Rate, shall be
made by the Lenders on the basis of a year of 360 days, and all computations of
interest at the Base Rate shall be made by the Lenders on the basis of a year of
365 or 366 days, as the case may be, for the actual number of days (including
the first day but excluding the last day) occurring in the period for which such
interest is payable. Whenever any payment to be made hereunder or under the
Notes shall be stated to be due on a day other than a Business Day, such payment
may be made on the next succeeding Business Day, and such extension of time
shall in such case be included in the computation of payment of interest.
SECTION 2.8 Evidence of Indebtedness. The indebtedness of
Borrower resulting from all Advances made from time to time shall be evidenced
by the Notes.
SECTION 2.9 Prior LIBOR Advances. Effective as of the Closing
Date the outstanding principal balance of all prior LIBOR Advances made under
and pursuant to the terms and conditions of the Prior Loan Agreement shall
convert to the LIBOR Interest Rate applicable as of the Closing Date (which
interest rate will be based on Borrower's Interest
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Period selection and the Borrower's Leverage on the Closing Date). Borrower
shall not be responsible for any fees, charges, or other costs set forth in
Section 2.2 associated with such LIBOR Interest Rate change.
SECTION 2.10 Advances Under Prior Loan Agreement. Advances made by
any of the Lenders under the Prior Loan Agreement (the "Prior Advances") shall
be subject to the covenants, terms and conditions of this Agreement from and
after the Closing Date. Each of the Lenders, by execution of this Agreement,
commits to extend its Lender's Percentage of the Prior Advances as of 5:00 p.m.
on the Closing Date. Each of the Lenders shall pay the Agent its Lender's
Percentage of the outstanding principal balance of all Prior Advances as of the
Closing Date. The Agent shall then pay each Lender under the Prior Loan
Agreement such funds as are allocable to each such Lender under the Prior Loan
Agreement as its proportionate share of such prior Advances. Thereafter, all
Advances, whether made under the Prior Loan Agreement or under this Agreement,
shall be administered in the same manner, according to each Lender's Percentage.
SECTION 2.11 Increase to Loan Amount. Provided that no Event of
Default has occurred, the Borrower may upon sixty (60) Business Days prior
written notice to the Agent, request the Loan Amount be increased to
$200,000,000. Together with any such request the Borrower shall include (i) a
certificate of an officer of the Borrower certifying that there has been no
material adverse change in the financial position of the Borrower or in its
compliance with the Financial Covenants since the date of its most recent
Borrowing Compliance Certificate and further certifying that no Event of Default
or event which, with the passage of time or the giving of notice or both, would
constitute an Event of Default has occurred, (ii) the increased Loan Amount
shall not exceed sixty percent (60%) of the Borrowing Base Value, and (iii) such
other information, documentation or opinions as the Agent may reasonably
request. The Agent shall promptly forward Borrower's request to each of the
Lenders prior to seeking the participation of any other Lender. No Lender shall
be required to increase its Lender Commitment unless expressly agreed to in
writing, but the Agent, any Lender hereunder, or any other lender may increase
its Lender Commitment by an amount necessary to comply with the Borrower's
request. If the Agent is willing to increase its own Lender Commitment or is
able to secure increased Lender Commitments in an aggregate amount of
$200,000,000, then Agent shall notify the Borrower that its request to increase
the Loan Amount has been obtained. Thereafter, Borrower may obtain Advances up
to $200,000,000 in accordance with the terms and provisions of this Agreement.
If the Agent is unwilling to increase its Lender Commitment or is unable to
secure increased Lender Commitments in an aggregate amount of $200,000,000 then
Agent shall notify the Borrower that its request to increase the Loan Amount has
been denied. If, by the end of such sixty (60) Business Day period, the Company
shall not have received a written approval or rejection of such request, such
request shall be deemed to have been denied.
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ARTICLE III
CONDITIONS OF LENDING AND FINANCIAL COVENANTS
SECTION 3.1 Conditions Precedent to Advances and Financial
Covenants. The obligation of the Lenders to make each Advance shall be subject
to the conditions precedent that on the date of any Notice of Borrowing
requesting an Advance and on the Funding Date:
(a) Borrower shall, at all times, be in compliance with the
following financial covenants (the "Financial Covenants"):
(i) ▇▇▇▇▇ Equity, Inc.'s status as a REIT shall
be continuing, and ▇▇▇▇▇ Equity, Inc. shall continue to be listed as a
publicly traded company on a nationally recognized stock exchange.
(ii) The outstanding principal balance of the
Loan shall not exceed sixty percent (60.00%) (the "Advance Rate") of
the Borrowing Base Value at any time. The Lenders shall not make any
Advance unless Borrower shall have pledged and/or mortgaged Collateral
with a sufficient Borrowing Base Value to ensure compliance with the
Advance Rate. The Borrowing Base Value, and the related limitation on
the outstanding principal balance of the Loan, shall be recalculated by
the Agent not less frequently than quarterly using the actual Adjusted
Net Operating Income (calculated on the most recent quarter ended)
generated from the Collateral and the Capitalization Rate to determine
borrowing availability. Changes to the Capitalization Rate and the
Advance Rate require the unanimous consent of all of the Lenders and
the Borrower.
(iii) As of the end of the most recent fiscal
quarter, Adjusted Net Operating Income for such quarter derived from
the Collateral (after deducting therefrom appropriate management costs
relating to the Collateral), shall be at least 1.50 times Mortgage Debt
Service for such quarter attributable to the Loan (the "Cash Flow
Requirement"). Provided no Default or Event of Default is then existing
under the Loan, and Adjusted Net Operating Income shall not have fallen
below an amount which is 1.35 times the Mortgage Debt Service, as
calculated according to the preceding sentence, Borrower shall have
thirty (30) days to correct an insufficient Cash Flow Requirement by
mortgaging or pledging additional Collateral, acceptable to the
Majority Lenders, to the Borrowing Base or reducing the principal
balance of the Loan then outstanding.
(iv) At all times and calculated as of the last
day of each fiscal quarter, the ratio of (x) Adjusted EBITDA to (y)
Interest Expense (whether accrued, paid or capitalized) for the
previous four consecutive quarters including the quarter then ended,
will not be less than 2.00 to 1.00.
(v) At all times and calculated as of the last
day of each fiscal quarter, the ratio of (x) Adjusted EBITDA to (y)
Fixed Charges for the previous four consecutive quarters including the
quarter then ended, will not be less than 1.70 to 1.00.
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(vi) Total Debt shall not, at any time, exceed
55% of Gross Asset Value.
(vii) Shareholder's Equity shall at all times be
equal to at least $450,000,000 plus seventy-five percent (75%) of all
net proceeds from future equity offerings plus one hundred percent
(100%) of the value generated by the issuance of operating partnership
units.
(viii) Development in Progress shall not at any
time exceed fifteen percent (15%) of Gross Asset Value.
(ix) As of the end of the most recent fiscal
quarter, the percentage of distributions or dividends paid to
shareholders paid from Funds from Operations, calculated on a rolling
four quarter basis, shall not exceed ninety percent (90%) unless
required to maintain ▇▇▇▇▇ Equity, Inc.'s REIT status.
(x) As of the end of each fiscal quarter,
distributions or dividends paid to shareholders, calculated on a
rolling four (4) quarter basis, shall not exceed one hundred percent
(100%) of Cash Available for Distribution. Notwithstanding the
foregoing, ▇▇▇▇▇ Equity, Inc. may distribute or dividend that amount
which shall be required to maintain ▇▇▇▇▇ Equity, Inc.'s REIT status.
(xi) At all times, the Borrower's total
investments in items (a) through (d) below shall be restricted as
follows (the "Permitted Investments"):
(a) Investments in partnerships, joint ventures,
and other non-corporate entities (except for any Special
Purpose Entities formed in accordance with the terms of
Section 13.12) accounted for on an equity basis shall not
exceed ten percent (10%) of Gross Asset Value;
(b) Investments in non-office operating
Properties, and other investments permitted under the
Borrower's organizational documents shall not exceed ten
percent (10%) of Gross Asset Value;
(c) Investments in Undeveloped Land shall not
exceed seven and one-half percent (7.5%) of Gross Asset Value;
and
(d) Investments in mortgages shall not exceed
five percent (5%) of Gross Asset Value.
The Borrower's total Permitted Investments in items (a) through (d) above shall
not exceed, in the aggregate, twenty percent (20%) of Gross Asset Value. At all
times, at least eighty-five percent (85%) of the Borrower's Gross Asset Value
must consist of assets owned by the Borrower or an SPE or of investments in a
Guarantor of the Loan.
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(xii) Borrower's Unhedged Variable Rate Debt shall
not exceed twenty percent (20%) of Gross Asset Value.
(b) As of the requested Funding Date, Borrower shall have
satisfied, and shall be in continuing compliance with, all of the terms,
covenants and conditions required to be satisfied as a condition precedent to
any Advance, and shall be in continuing compliance with all of the terms,
covenants and conditions of the Loan Documents, and no Default or Event of
Default shall then exist or be continuing.
(c) The following statements shall be true and, concurrently with
delivery of the Notice of Borrowing for such Advance, the Agent shall have
received a certificate, substantially in the form attached as Exhibit J (the
"Borrowing Compliance Certificate"), signed by a duly authorized officer of
Borrower, dated the Funding Date, stating that:
(i) The representations and warranties contained
in Section 6.1 are correct on and as of the Funding Date, before and
after giving effect to such Advance and to the application of proceeds
therefrom, as though made on and as of such date,
(ii) No event or condition has occurred or is
continuing, or would result from such Advance or from the application
of proceeds therefrom, which constitutes a Default or Event of Default,
and
(iii) Borrower is in compliance with each of the
Financial Covenants before and after giving effect to such Advance and
to the application of proceeds therefrom.
SECTION 3.2 Conditions Precedent to Certain Advances. The
obligation of the Lenders to make any Advance that, but for the addition of
Collateral pursuant to Section 4.3, would cause the principal balance of the
Loan to exceed the maximum borrowing limits determined in accordance with the
Financial Covenants, shall be subject to the further conditions precedent that
on the date of the Notice of Borrowing requesting such Advance and on the
Funding Date, Borrower shall have executed and delivered the Loan Documents, or
modifications thereof, relating to the addition of such Collateral, as the
Lenders reasonably may request to carry out the provisions and intent of this
Agreement, all in form and content acceptable to the Lenders in their sole
discretion, and shall have satisfied the conditions and requirements set forth
in Article IV.
SECTION 3.3 Eligible Borrowing Base. Any Property owned by
Borrower must meet the following eligibility parameters to be included in the
Borrowing Base and accepted as Collateral:
(a) No liens (other than the lien of a Security Deed or lien
arising pursuant to any other Loan Document) may encumber or be placed on any
part of the real property assets;
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(b) The Borrower shall have fee simple title to all of the
Property;
(c) The Property must be utilized by Borrower as an office
Property, except for the Property commonly known as "The Shops at the Colonnade"
located in Birmingham, Alabama, which Property is currently used for retail
purposes.
(d) To be included as Collateral, each office property not
included within a ▇▇▇▇▇ Business Park and all of those Properties which together
comprise an entire Business Park must be at least eighty percent (80%) occupied
by tenants under leases complying with the requirements of this Agreement and
paying current market Rents. For purposes of this test, "Business Park" means
any one or more contiguous buildings, together with all associated parking,
improvements and other appurtenances thereto which together function as a
cohesive office park sharing common areas, parking, appearance, and design.
(e) The environmental condition of the Property must be acceptable
to each of the Lenders, and the Lenders shall have reviewed and approved the
Phase I environmental site assessment for the Property, any required asbestos
study, and a properly executed Indemnification Agreement as to the Property;
(f) No one Market, other than the Atlanta Market, may account for
more than thirty percent (30%) of the Borrowing Base Value. For the purposes of
this covenant, "Market" shall be defined as Standard Metropolitan Statistical
Area commonly known as "SMSA". No new Properties may be acquired, substituted or
otherwise added in the Atlanta Market which would cause the Atlanta Market to
exceed thirty percent (30%) of the Borrowing Base Value.
(g) Borrower shall have submitted to each of the Lenders a
complete Due Diligence Package containing all of the documents and materials
required hereunder and also including any additional due diligence materials
reasonably requested by Lender for each Borrowing Base Property to be included
in the Collateral; and
(h) The Majority Lenders shall have approved the Due Diligence
Package for each Borrowing Base Property to be included in the Collateral.
ARTICLE IV
ADDITION, SUBSTITUTION AND RELEASE OF COLLATERAL
SECTION 4.1 General Right to Add, Substitute or Release
Collateral. Subject to the written approval of the Majority Lenders, Borrower
may elect, at any time during the Loan Term, to cause the addition, substitution
or release of Collateral, subject, however, to Borrower's continuing compliance
with the Financial Covenants and with the requirements of this Article IV;
provided, that the Lenders reserve the right to exclude from the Collateral any
particular office building or property that Borrower requests for addition
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to Collateral based on sub-standard occupancy, location, operating history, age,
condition, or environmental concerns, in the Lenders' sole discretion, and
further provided, that Borrower shall not have the right to cause the addition,
substitution or release of Collateral if a Default or Event of Default exists
and is continuing. In support of any request for release, substitution or
addition of Collateral, Borrower shall submit to Agent:
(i) a certification, in form and content acceptable to the Lenders
in their sole discretion, prepared by management and certified by the
chief financial officer or chief accounting officer of Borrower,
certifying to the Lenders that, after such proposed release,
substitution or addition of office buildings, Borrower will be in
compliance with the Financial Covenants;
(ii) the information or documentation required to be executed
and/or delivered to the Lenders as set forth in this Agreement,
including, without limitation, modifications or partial releases of the
Loan Documents (or delivery of additional Loan Documents in form and
content satisfactory to Lenders and consistent with the requirements of
this Agreement) as necessary or appropriate to properly reflect the
release, substitution or addition of Collateral in the discretion of
the Lenders and the Lenders' Counsel, compliance with all of the
Borrowing Base eligibility requirements set forth in Section 3.3
hereof, and the documentation as set forth in the Summary Requirements
as to the office buildings proposed to be substituted for or added to
the Collateral, as applicable; and
(iii) evidence satisfactory to the Lenders that such additional
Collateral, or the remaining Collateral after substitution or release
of other Collateral, has adequate and legal rights of ingress and
egress, drainage and utilities, and, if necessary or appropriate,
Borrower shall deliver to and in favor of the Lenders, their respective
successors and assigns, such perpetual non-exclusive easements as the
Lenders may reasonably request to create such adequate and legal rights
of ingress and egress, drainage or utilities. With respect to easements
for ingress and egress, drainage or utilities that reasonably may be
required over, under or across the released Collateral as a result of
the release of such Collateral, the Lenders may establish such easement
or easements at the time of such release pursuant to a Quit Claim Deed
with Reservations and Grants of Easements in substantially the form
attached as Exhibit I (the "Release Deed"), with modifications as
appropriate for the particular circumstances of such release, and the
nature of the easement or easements required, to comply with the laws
of any State. Similarly, if as a result of any such release, the
released Collateral reasonably may require easements for ingress and
egress, drainage or utilities over, under or across any portion of the
remaining Collateral, then at Borrower's request, the Lenders shall,
subject to the remaining provisions of this Article IV below, cause
such release to be made using the form of Release Deed, with
modifications as appropriate for the particular circumstances of such
release and the nature of the easement or easements required.
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The Lenders' decision whether to accept Borrower's request for
substitution, addition or release of Collateral shall be based on Borrower's
satisfaction of the foregoing requirements, delivery and approval of the Due
Diligence Package, and on the documentation and information delivered to the
Lenders in compliance with Section 3.3 and any other provisions of this
Agreement and the Summary Requirements, and on a determination by the Lenders,
in their sole and absolute discretion, that there has been no material adverse
change in the financial condition of Borrower, and that all other aspects of the
Property to be added or substituted, as applicable, including without
limitation, the general condition of such Property and vacancy rates of the
local commercial leasing market, are substantially similar to the existing
Collateral, or, if applicable, to the Collateral to be released for substitution
by new Property, subject to the Lenders' discretion.
SECTION 4.2 Requirements for Release of Collateral. In addition
to the general conditions and requirements for release of Collateral as set
forth in Section 4.1, the following conditions and requirements shall be
satisfied prior to the release of any Collateral:
(a) If the Property proposed for release from the Collateral is
not the exclusive subject matter of a boundary survey on file with the Lenders
showing the Collateral, then, not later than 15 days prior to the Collateral
Change Date for such release, Borrower shall deliver to Agent a current boundary
survey of the Property proposed for release from the Collateral, and a current
boundary survey of the remaining Collateral if the existing boundary survey of
the Collateral is affected by the release of such Property from the Collateral.
Each such survey shall meet or exceed the Minimum Standards and Supplementary
Requirements set forth on attached Exhibit D. Each survey shall be subject to
review and approval by the Lenders, the Lenders' Counsel, and Title Insurer;
(b) No release of any Collateral will be permitted if the release
of such Collateral would violate the Market restrictions set forth in Section
3.3(f); and
(c) The Borrowing Base Value of the remaining Collateral shall not
be less than $100,000,000.00 after the release of any Collateral hereunder.
SECTION 4.3 Requirements for Addition or Substitution of
Collateral. In addition to the general conditions and requirements for addition
or substitution of Collateral as set forth in Section 4.1, the following
conditions and requirements shall be satisfied prior to the addition or
substitution of any Collateral:
(a) Prior to any Collateral Change Date, the Lenders shall have
ordered at Borrower's expense and received a current Appraisal of the Property
to be added to the Collateral as additional Collateral or in substitution of
existing Collateral. Following the Lenders' receipt of such Appraisal
satisfactory to the Lenders, the Lenders will provide a copy of such Appraisal
to Borrower. Such Appraisals shall be utilized by the Lenders for informational
purposes, and shall be subject to review and approval by the Lenders.
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(b) Not later than 30 days prior to any Collateral Change Date,
Borrower shall deliver to the Agent and the Agent's Counsel a commitment or
binder for an endorsement to the existing title insurance policy (if the
Property to be added to the Collateral is located in the same State as the
existing Collateral) or for a new title insurance policy (if the Property to be
added to the Collateral is not located in the same State as the existing
Collateral or is located in the State of Texas) issued by Title Insurer,
committing to insure the Lenders' first security or title interest in the
Property to be added to the Collateral as additional Collateral or in
substitution of existing Collateral (as legally described to include any
easements benefitting such real property), meeting or exceeding the Minimum
Title Standards set forth on attached Exhibit E (the "Title Commitment"). The
Title Commitment shall contain only those matters expressly approved by the
Lenders, and shall include complete copies of all listed title exceptions. All
title exceptions are subject to the Lenders' review and approval, and any liens
of prior mortgagees or creditors shall be satisfied or released on or before the
Collateral Change Date. On the Collateral Change Date, Borrower shall cause
Title Insurer to deliver its marked original Title Commitment indicating the
proper satisfaction of all conditions to issuance of a title insurance policy or
endorsement thereof, as the case may be, insuring the Lenders, its successors
and assigns as their interests may appear, based on such Title Commitment
subject only to those matters and exceptions to coverage as set forth in the
Title Commitment as previously may have been approved by the Lenders.
(c) Not later than 30 days prior to any Collateral Change Date,
Borrower shall deliver to the Agent and the Agent's Counsel six (6) copies (or a
greater number in the event additional Lenders are added to the Loan) of a
current boundary survey (or recertified boundary survey, provided that the same
is, in the discretion of Title Insurer, sufficient to permit Title Insurer to
remove the standard survey exceptions) for the Property to be added to the
Collateral, meeting or exceeding the Minimum Standards and Supplementary
Requirements set forth on attached Exhibit D. Each survey shall be subject to
review and approval by the Lenders, the Lenders' Counsel, and Title Insurer.
Surveys for buildings within single office parks shall be accompanied by a site
map showing the relative location of each building within such office park.
(d) Not later than 30 days prior to any Collateral Change Date,
Borrower shall deliver to the Agent a current UCC-11 search for Florida and each
State or local jurisdiction (if applicable) in which the Property to be added to
the Collateral is located, evidencing to the Lenders' satisfaction that such
additional Property is free and clear of any liens or perfected security
interests prior to the Lenders' security interest therein. On or before the
Collateral Change Date, Borrower shall deliver to the Agent UCC-1 Financing
Statements for filing in Florida and each State or local jurisdiction (if
applicable) in which the Property to be added to the Collateral is located,
perfecting the Lenders' first lien and security interest in the additional
Property as Collateral.
(e) Not later than 30 days prior to any Collateral Change Date,
Borrower shall deliver to the Agent six (6) copies (or a greater number in the
event additional Lenders are added to the Loan) of a current environmental site
assessment of each Property to be
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added to the Collateral certified to the Lenders, meeting ASTM standards for
"Phase I" environmental site assessments, and including an asbestos evaluation
for all buildings constructed prior to 1980, prepared by Law Engineering or
other environmental engineer acceptable to the Lenders. Such assessments shall
be utilized by the Lenders for informational purposes, and shall be subject to
review and approval by the Lenders. Additionally, not later than 30 days prior
to any Collateral Change Date, Borrower shall deliver to the Agent a
certification in compliance with applicable federal law relating to asbestos
records and asbestos materials affecting any buildings constructed before 1980
that are to be added to the Collateral.
(f) Not later than 30 days prior to any Collateral Change Date,
and on the Collateral Change Date, Borrower shall deliver to the Agent a current
Rent Roll for the property to be added to the Collateral.
(g) On or before any Collateral Change Date, Borrower shall
deliver the following materials to the Agent and the Agent's Counsel, in form
and content acceptable to the Agent and the Agent's Counsel:
(i) Evidence of the current corporate status of
Borrower in Florida, and the current authority of Borrower to transact
business in each other State in which the property to be added as
Collateral is located.
(ii) A certificate of the Secretary of Borrower
certifying to the Lenders: (i) the completeness, accuracy and
continuing effectiveness of Articles of Incorporation and Bylaws of
Borrower as attached to such certificate, (ii) the names and signatures
of all executive officers of Borrower, and (iii) the completeness,
accuracy and continuing effectiveness of an executed resolution of the
Board of Directors of Borrower, as attached to such certificate,
authorizing Borrower's execution and delivery of the Loan Documents.
(h) On or before any Collateral Change Date, Borrower shall
deliver to the Agent evidence satisfactory to the Lenders and the Lenders'
Counsel that the property to be added to the Collateral is in compliance with
the insurance requirements set forth in Section 5.3, and in compliance with the
tax requirements set forth in Section 5.4.
(i) On or before any Collateral Change Date, Borrower shall
deliver to the Agent a certification substantially in the form attached as
Exhibit F, executed and dated as of a date not more than 30 days prior to such
Collateral Change Date, relating to the level of compliance of the property to
be added to the Collateral with Governmental Requirements.
(j) On a Collateral Change Date, Borrower shall furnish Agent with
an opinion addressed to the Lenders provided by an attorney licensed in each
State in which the property to be added to the Collateral is located, retained
by Borrower and acceptable to the Lenders. Said opinions shall be subject to
approval by the Lenders and shall address
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such matters as the Lenders reasonably may require, including, without
limitation, the following that:
(A) the due organization and valid legal existence of
Borrower as a Florida corporation, and the current
authority of Borrower to transact business in the
State.
(B) the due authorization, execution, validity, binding
effect and enforceability of the Loan Documents in
accordance with their terms.
(C) except for Collateral located in the State of Texas,
the Collateral and its use by Borrower comply with
applicable zoning, building, land use and
environmental requirements of all governmental
authorities having jurisdiction over the Collateral
(the foregoing opinion may be given to the actual
knowledge of opining counsel and based on a
certification of such matters given by Borrower to
opining counsel).
(D) all amounts paid and to be paid by Borrower as
interest under the Loan Documents constitute lawful
interest or are not usurious under the laws of the
State.
(E) the existence of, or the non-existence of, any
requirement for any consent of any governmental
authority in connection with the execution, delivery
or performance of the Loan Documents by Borrower.
(F) the Security Deed provides that a properly perfected
first priority security interest in the Collateral to
be added or substituted.
(G) the Loan Documents are valid Obligations of the
Borrower, remain in full force and effect, and
provide Lender a properly perfected first priority
security interest in the Collateral to be added or
substituted.
SECTION 4.4 Lenders' Approval of Addition or Substitution of
Collateral. Each of the Lenders shall have fifteen (15) Business Days from
receipt of the Due Diligence Package and any additional due diligence materials
reasonably requested by Lenders pursuant to Article IV hereof, to approve any
request by Borrower to add or substitute Collateral. The Lenders shall respond
to the Agent with any objections within said fifteen (15) Business Days or the
addition or substitution of such Collateral shall be deemed approved by such
Lender.
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ARTICLE V
CERTAIN MATTERS CONCERNING THE COLLATERAL
SECTION 5.1 Inspections. The Lenders reserve the right to require
an engineering/structural inspection of any property constituting the Collateral
or property to be added to the Collateral if any of the Lenders have reasonable
cause to believe that the physical condition, safety features, or disabled
persons access features of such building are not maintained to standards
consistent with good management practices or in compliance with Governmental
Requirements. Any such inspection shall be conducted at the expense of Borrower.
Unless such inspection is made pursuant to the foregoing, the Lenders otherwise
shall have the right to inspect the Collateral at any reasonable time throughout
the Loan Term, at the expense of the Lenders.
SECTION 5.2 Appraisals. During the Loan Term, the Lenders may
obtain an Appraisal of the Collateral when required by the regulations of the
Federal Reserve Board or at such other times as the Lenders reasonably may
require. All Appraisals required under this Section 5.2, or required under any
other provision of this Agreement, shall be performed by an independent third
party appraiser selected by the Lenders, and shall be addressed to the Lenders
with a copy certified to Borrower. Following the Lenders' receipt of such
Appraisals satisfactory to the Lenders, the Lenders shall provide a copy of such
Appraisals to Borrower. The cost of such Appraisals shall be borne by Borrower.
The terms of engagement of any appraiser shall include a clause obligating the
appraiser to maintain confidentiality of such Appraisal and information obtained
in connection therewith. Borrower's failure or refusal to sign such an
engagement letter, however, shall not impair the Lenders' right to obtain such
Appraisals. Borrower agrees to pay the cost of such Appraisal within 10 days
after receiving an invoice for such Appraisal.
SECTION 5.3 Insurance. Borrower shall procure and maintain during
the Loan Term an insurance policy issued by Insurer or other insurer acceptable
to the Lenders in its discretion, covering the improved real property and
personal property comprising the Collateral, with standards, terms and coverages
meeting or exceeding those of Borrower's existing Policy No. A TL-441545 0000,
issued by the Insurer, as in effect as of August 1, 1996. Such policy shall
recite the Lenders' interest as mortgagee in standard non-contributory mortgagee
clauses effective as of the Closing Date, or any Funding Date as to any property
added to the Collateral as of such Funding Date, and shall contain a provision
for 30 days prior written notice to the Lenders of cancellation of or any change
in the risk or coverages insured. Borrower shall promptly pay all premiums for
such policy as the same become due, and shall maintain such policy throughout
the Loan Term without cost to the Lenders.
If any such policy or part thereof shall expire or be withdrawn, or
become void or subject to cancellation by reason of the breach of any condition
thereof, or become void by reason of the failure or impairment of the capital of
any company in which the insurance shall be carried, or if for any reason
whatsoever the insurance shall be unsatisfactory to the Lenders, the Agent may
procure on behalf of the Lenders such insurance as it deems
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necessary to protect the interest of the Lenders. Borrower shall promptly upon
demand pay direct or reimburse the Lenders for all premiums and other costs
incurred in procuring such insurance.
SECTION 5.4 Taxes and Assessments. Borrower shall pay all taxes
and assessments relating to the Collateral prior to delinquency thereof, and
shall deliver to the Agent receipted bills for taxes and assessments promptly
upon Borrower's receipt thereof.
Notwithstanding the foregoing, Borrower shall not be required to pay
any taxes or assessments as long as Borrower shall contest, in good faith and at
its expense, the existence, the amount or the validity thereof by appropriate
proceedings; provided that such proceedings shall operate during the pendency
thereof to prevent (A) the collection of, or other realization upon, such taxes
or assessments so contested, (B) the sale, forfeiture or loss of the Collateral
to satisfy the same, (C) any interference with the use or occupancy of the
Collateral, and (D) any interference with the payment of Borrower's obligations
under the Loan. Borrower agrees that each such contest shall be promptly and
diligently prosecuted to a final conclusion, except that Borrower shall, as long
as the conditions of the first sentence of this paragraph are at all times
complied with, have the right to attempt to settle or compromise such contest
through negotiations. Borrower shall pay and save the Lenders harmless against
any and all losses, judgments, decrees and costs (including all reasonable
attorneys' fees and expenses) in connection with any such contest and shall,
promptly after the final determination of such contest, fully pay and discharge
the amounts which shall be levied, assessed, charged or imposed or be determined
to be payable therein or in connection therewith, together with all penalties,
fines, interest, costs and expenses thereof or in connection therewith, and
perform all acts the performance of which shall be ordered or decreed as a
result thereof. No such contest shall subject the Lenders to the risk of any
material civil liability or any criminal liability. If the Lenders reasonably
believe that such contest is not in compliance with the requirements of this
paragraph, then, upon written demand by any of the Lenders, Borrower promptly
shall pay the amount of such taxes or assessments so contested, which payment
may be made under protest.
SECTION 5.5 Tax and Insurance Deposits. Upon the Lenders'
request, or if an Event of Default has occurred, Borrower shall deposit with
Agent a sum equivalent to 1 year's insurance premium on the casualty insurance
policy insuring the Collateral, and shall pay to the Agent on a monthly basis an
amount equivalent to 1/12 of all annual ad valorem real and personal property
taxes and assessments levied against the Collateral as estimated by the Agent,
in order to accumulate with the Agent sufficient funds to pay such taxes and
assessments and a full year's insurance premiums 30 days prior to their due
date. The Lenders shall maintain any funds so deposited in an interest bearing
account (money market rates), and interest accrued on such account will be
reinvested in such account but shall be considered income to Borrower for state
and federal income tax and capital gains tax purposes. To the extent that funds
are available for disbursement out of such account, the Lenders shall pay annual
ad valorem real and personal property taxes
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and assessments levied against the Collateral at such time as will result in the
greatest discount, if any, for early payment.
SECTION 5.6 Tax Service Contract; Annual Tax Searches. The
Lenders shall have the right to engage Transamerica Real Estate Tax Service
(TRETS) for the Loan Term, for the purpose of providing the Lenders annual tax
information concerning the Collateral; provided, however, that the Lenders will
notify Borrower in writing before the Lenders engage TRETS. The cost of the
TRETS service, if applicable, shall be paid by Borrower. Borrower shall engage
or employ the services of a tax specialist (who may be an employee of Borrower)
for the purpose of monitoring and complying with all impositions of ad valorem
real and personal property taxes and assessments against the Collateral. If the
Lenders require Borrower to make tax deposits pursuant to Section 5.5 above,
then the Lenders will not engage TRETS. Borrower agrees to permit the Lenders to
consult with Borrower's tax specialist from time to time for the purpose of
determining the status of Borrower's tax compliance.
SECTION 5.7 Due on Sale. The entire balance of the Loan and all
other sums owing to the Lenders under the Loan Documents shall be and become
immediately due and payable, at the option of the Lenders, if there shall occur
without the Lenders' prior written consent any sale, conveyance, further
encumbrance, or other transfer of title to the Collateral, or any interest
therein (whether voluntarily or by operation of law). Any consent by the Lenders
permitting a transaction otherwise prohibited under this paragraph shall not
constitute a consent to or waiver of any right, remedy or power of the Lenders
to withhold its consent on a subsequent occasion to a transaction not otherwise
permitted by the provisions of this paragraph. No such consent shall be
considered by the Lenders unless the appropriate service fees and legal fees are
paid in advance and no such consent shall be given unless Borrower agrees, inter
alia, that immediately upon closing of the subject sale or transfer, Borrower
shall provide the Lenders with a copy of the deed or other instrument conveying
title to the Collateral to transferee.
SECTION 5.8 Loss and Restoration following Casualty or
Condemnation.
(a) In the event of any casualty or condemnation affecting all or
any portion of the Collateral, Borrower shall give immediate written and oral
notice thereof to the Agent. All loss proceeds of any insurance policies
following any casualty, and all awards derived from any condemnation, shall be
applied (i) to restoration of the Collateral suffering such loss if such loss is
less than 50% of the full replacement cost of such Collateral, or (ii) at the
Lenders' option, to restoration of the Collateral suffering such loss or to the
payment of principal (whether or not then due and payable), interest and other
sums secured by the Loan Documents (in the order and in the amounts that the
Lenders in their sole discretion elect), on such terms as the Lenders may
specify, if such loss is 50% or more of the full replacement cost of such
Collateral. If the Lenders elect, pursuant to clause (ii) above, to apply the
proceeds of casualty or awards of condemnation, to payment of principal, then
the Lenders will exercise a good faith effort to apply such proceeds or awards
in a manner
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that will seek to minimize the application of charges or penalties for
prepayment or repayment of LIBOR Advances.
(b) Promptly following any loss resulting from a casualty or
condemnation, Borrower shall commence and diligently continue to restore the
Collateral affected thereby as nearly as possible to its value, condition and
character immediately prior to such loss, whether or not any insurance proceeds
or award derived from condemnation, as applicable, is sufficient to cover the
cost of restoration. Provided that no Event of Default exists, the Lenders shall
make available to Borrower any proceeds of such loss received by the Lenders,
subject to the terms and conditions set forth in this Section 5.8. Borrower
shall be entitled to receive from the Lenders periodic disbursements of the
proceeds payable in connection with such loss, but only on the basis of
certificates of Borrower delivered to the Agent from time to time as such
rebuilding, restoration and repair progresses or is completed. Each such
certificate shall describe the work for which Borrower is requesting payment,
the cost incurred by Borrower in connection therewith, and shall state that such
work has been performed in conformity with all Governmental Requirements and in
compliance with plans and specifications therefor, the estimated cost of
completing such work, and that Borrower has not theretofore received payment for
such work. In the event the cost of restoration or repairs exceeds the available
insurance proceeds, the Borrower shall immediately fund any deficiency with
Borrower's funds prior to the application of any insurance proceeds. Upon
completion of such work, if any proceeds of such loss remain after the final
payment has been made for such work, such remaining proceeds shall be paid to
Borrower. If the cost of any such work shall exceed the amount of such proceeds,
the deficiency shall be paid by Borrower. In no event shall the Lenders have any
obligation to turn over proceeds to Borrower if any Default or Event of Default
exists and is continuing, unless and until such Default or Event of Default
shall have been cured or removed.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.1 Representations and Warranties of Borrower. Borrower
represents and warrants to the Lenders as follows:
(a) Borrower is a corporation organized under the Florida Business
Corporation Act, and its status is active. Borrower is authorized to transact
business in each State.
(b) Borrower has the corporate power to conduct its business and
to execute and deliver this Agreement and the other Loan Documents and to
perform the Obligations.
(c) Borrower has authorized the execution and delivery of the Loan
Documents and the performance of the Obligations by all necessary corporate
action.
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(d) The execution and delivery of the Loan Documents and the
performance of the Obligations by Borrower do not (i) violate Borrower's
articles of incorporation or bylaws; (ii) constitute a breach of or a default
under any agreement or instrument to which Borrower or any Subsidiary is a party
or by which Borrower, its Subsidiaries or their respective assets are bound;
(iii) violate a judgment, decree or order of any court or administrative
tribunal, which judgment, decree or order is binding on Borrower or any
Subsidiary or the Collateral; or (iv) violate any federal, Florida or State law,
rule or regulation.
(e) No consents, authorizations or approvals or other action by,
and no notice to or filing with, any governmental authority, regulatory body or
any creditor is required for the execution and delivery of the Loan Documents or
the performance of the Obligations by Borrower.
(f) The Loan Documents are the legal, valid and binding
obligations of Borrower enforceable against Borrower in accordance with their
respective terms.
(g) Borrower is a REIT, and is listed as a publicly traded company
on a nationally recognized stock exchange; and Borrower has no Subsidiaries
other than the Subsidiaries described on attached Exhibit G, and such other
Subsidiaries as may be formed subsequent to the date hereof and disclosed to the
Lenders in writing.
(h) No Subsidiary is the holder or obligee of any Debt.
(i) No judicial or administrative proceedings are pending or
threatened, including any bankruptcy proceeding, against Borrower or any
Subsidiary which might adversely affect Borrower's ability to pay or perform the
Obligations, Borrower's obligations under any Leases, or Borrower's contracts
and agreements entered or to be entered for the performance of the Obligations,
or which might adversely affect Borrower's ownership, management, leasing and
operation of the Collateral.
(j) All financial information supplied by Borrower to the Lenders
in support of Borrower's application for the Loan fairly presents the financial
condition of Borrower as of the effective dates thereof and the results of the
operations of Borrower for the period ended on such dates, all in accordance
with GAAP; and since September 30, 1998, there has been no material adverse
change in such condition, operations or properties.
(k) Neither Borrower nor any Subsidiary is engaged in the business
of extending credit for the purpose of purchasing or carrying "margin stock"
(within the meaning of Regulation U issued by the Board of Governors of the
Federal Reserve System), and no proceeds of the Loan will be used, directly or
indirectly, by Borrower or any Subsidiary to purchase or carry any margin stock
or to extend credit to others for the purpose of purchasing or carrying any
margin stock.
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(l) Borrower is in compliance in all material respects with all
applicable provisions of ERISA, no Reportable Event has occurred and is
continuing with respect to any Plan, and Borrower has not incurred any liability
to the Pension Benefit Guaranty Corporation under Section 4062 of ERISA.
(m) Borrower is not in default under any material agreement,
lease, contract or other instrument relating to the ownership, management,
leasing and operation of the Collateral, and no event of default by Borrower, or
event which with the giving of notice or the passage of time would become an
event of default by Borrower, has occurred or is continuing with respect to any
such agreement, contract or other instrument.
(n) Borrower has good and marketable title to the Collateral
(except Collateral located in the State of Texas, as to which Borrower has
indefeasible fee simple title), free and clear of any liens, encumbrances not
acceptable to the Lenders or mortgages other than or encumbrances in any
Security Deed and other than those created or imposed by the Loan Documents,
Borrower is in exclusive possession of the Collateral subject only to rights of
parties in possession as tenants under recorded or unrecorded Leases, as tenants
only, Borrower is the landlord under the Leases, and no Subsidiary (other than
an SPE created pursuant to Section 13.12) has any interest in the Collateral,
including the Leases, except as described on attached Exhibit H.
(o) There are no pending or, to the best of Borrower's knowledge,
threatened actions or proceedings for condemnation or eminent domain affecting
the Collateral, except as disclosed to the Lenders in the title commitment
delivered to the Lenders at Closing and except such actions or proceedings as
may be threatened or become pending subsequent to the date hereof and disclosed
to the Lenders in writing.
(p) Any reprogramming required to permit the proper functioning,
in and following the year 2000 as it relates to the two digit issues associated
therewith, of the Borrower's (a) computer systems and (b) equipment containing
embedded microchips (including systems and equipment supplied by others or with
which Borrower's systems interface) and the testing of all such systems and
equipment, as so reprogrammed, will be in substantial compliance by June 30,
1999. The Borrower shall report quarterly thereafter to the Agent as to the
status of its progress on final phase testing to become one hundred percent
(100%) year 2000 compliant. The cost to the Borrower of such reprogramming and
testing and of the reasonably foreseeable consequences of year 2000 to the
Borrower (including, without limitation, reprogramming errors and the failure of
others' systems or equipment) will not result in a Default or a material adverse
effect in the ability of the Borrower to meet its Obligations hereunder. Except
for such of the reprogramming referred to in the preceding sentence as may be
necessary, the computer and management information systems of the Borrower and
its Subsidiaries are and, with ordinary course upgrading and maintenance, will
continue for the term of this Agreement to be, sufficient to permit the Borrower
to conduct its business without material adverse effect in the ability of the
Borrower to meet its Obligations hereunder.
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(q) All of the Collateral is in compliance with all Environmental
Laws and Borrower has not received notice of any Claims for violations of any
Environmental Laws, as such terms are defined in each Indemnification Agreement.
The foregoing representations and warranties shall survive the
execution and delivery of this Agreement.
ARTICLE VII
COVENANTS OF BORROWER
SECTION 7.1 Affirmative Covenants. So long as the Notes shall
remain unpaid or the Lenders shall have any obligation to make any Advance
hereunder, and in addition to all other covenants and agreements of Borrower set
forth in this Agreement, Borrower shall comply at all times with the affirmative
covenants set forth in this Section 7.1 and the Financial Covenants set forth in
Section 3.1, unless the Lenders shall otherwise consent in writing.
(a) Costs and Expenses. Borrower shall pay all reasonable costs,
fees, commissions, charges, taxes and other expenses incident to the evaluation,
preparation and closing of the Loan, any subsequent modification or partial
release affecting the Loan Documents, subsequent funding of Advances, or
otherwise incurred in protecting and preserving the lien of the Loan Documents
or in enforcing the Lenders' rights under the Loan Documents, or in enforcing,
sustaining, protecting, or defending the lien or priority of the Loan Documents
against any and all persons, including, but not limited to, lien claimants or
the exercise of the power of eminent domain or other governmental power of any
kind, including, without limitation, reasonable fees and expenses of the
Lenders' Counsel, examination of title to the Collateral and loan title
insurance thereon, boundary surveys, Appraisals, environmental site assessments,
asbestos evaluations, engineering/structural inspections, note and mortgage
taxes, transfer taxes, tax search service fees, and all recording fees and
charges. Additionally, to the extent that applicable state law requires that any
note or mortgage tax is payable in connection with any Advance, Borrower shall
be obligated to pay the same to the Lenders upon demand therefor. Every such
payment made by or on behalf of the Lenders will be immediately due and payable
by Borrower to the Lenders and will bear interest from the date of disbursement
thereof by the Lenders at the then applicable Base Rate until reimbursed to the
Lenders by Borrower (provided, however, that if Borrower fails to reimburse the
Lenders for such payments within 5 days following the Lenders' written notice
and demand therefor, such payments made by the Lenders will bear interest from
the date of disbursement at the Default Rate), and the same, together with such
interest, will be secured by the lien of the Loan Documents. Nothing contained
in this paragraph will be construed as requiring the Lenders to advance or spend
money for any of the purposes mentioned in this paragraph.
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(b) Rent Roll. Borrower shall deliver to the Agent on a quarterly
basis an updated Rent Roll reflecting information concerning the Leases as of
the end of the preceding quarter, and upon the Agent's request, deliver to the
Agent a certified report of prepaid rentals and security deposits relating to
such Leases.
(c) Compliance with Governmental Requirements. Borrower shall
comply with all Governmental Requirements, including, without limitation, ERISA,
regulations relating to protection of the environment, building and
construction, highway access, disability access, asbestos, lead-based paint,
zoning, land use and concurrency, and other regulations relating to the
ownership, leasing, development, use or operation of the Collateral.
(d) Preservation of Corporate Existence. Borrower shall preserve
and maintain its corporate existence and status as a REIT, and its rights
(charter and statutory), and remain qualified to transact business in each
State.
(e) Preservation and Maintenance of Collateral. Borrower shall
maintain the Collateral in a condition consistent with good management
practices, and in good repair (which shall include structural or non-structural
and foreseen or unforeseen repairs), without structural alteration in any
material respect (except interior tenant improvements), without the Lenders'
prior written approval, which will not be unreasonably withheld or delayed.
(f) Reporting Requirements.
(i) Not later than 45 days after the end of the
first three calendar quarters of each fiscal year of Borrower, Borrower
shall submit to the Agent a Borrowing Compliance Certificate and a
Borrowing Base Certificate, in form and content acceptable to the
Lenders in its sole discretion, prepared by management and certified as
true and correct by either the Treasurer, chief financial officer or
chief accounting officer of Borrower, confirming Borrower's compliance
with the Financial Covenants and with the Borrowing Base eligibility
requirements for the Collateral set forth in Section 3.3 hereunder and
setting forth in summary form the financial information and numerical
calculations supporting such conclusions.
(ii) Not later than 45 days after the end of the
first three calendar quarters of each fiscal year of Borrower, Borrower
shall submit to the Agent a copy of Borrower's Form 10Q as filed with
the SEC, and not later than 90 days after the end of Borrower's fiscal
year, Borrower shall submit to the Lenders a copy of Borrower's Form
10K as filed with the SEC.
(iii) Borrower shall submit to the Agent, not
later than one hundred twenty (120) days after the end of Borrower's
fiscal year, (a) a copy of an Annual Report, (b) a three-year business
plan with supporting financial projections in
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reasonable detail acceptable to the Agent, and (c) a Borrowing
Compliance Certificate.
(iv) Borrower shall submit to the Agent copies of
all special filings made by Borrower to the SEC within 15 days
following the date of such filing, including, without limitation, any
filings seeking approval of transactions with any Subsidiaries.
(v) Borrower shall keep books and records
reflecting its financial condition in accordance with GAAP. The Lenders
shall have the right, from time to time, at all times during normal
business hours, to examine such books, records and accounts at the
corporate offices of Borrower at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, and to make such copies or extracts thereof as
the Lenders deems necessary.
(vi) Borrower shall submit to the Agent, not
later than forty-five (45) days after the end of each fiscal quarter of
Borrower, operating statements for all Property included within the
Collateral.
(vii) Notwithstanding any of the foregoing
reporting requirements, upon request of the Agent, Borrower shall
submit to the Agent a pro forma Borrowing Compliance Certificate in
order for Agent to determine the Applicable Margins for LIBOR Advances
hereunder.
(g) Notice of Failure to Perform. Promptly (and in any event
within 5 days after the occurrence thereof) notify the Lenders of any failure by
Borrower to perform or observe any Obligation.
SECTION 7.2 Negative Covenants. So long as the Notes shall remain
unpaid or the Lenders shall have any obligation to make any Advance hereunder,
and in addition to all other covenants and agreements of Borrower set forth in
this Agreement, Borrower shall comply with the negative covenants set forth in
this Section 7.2, unless the Lenders shall otherwise consent in writing.
(a) Use of Loan Proceeds. Borrower shall not use Loan proceeds for
purposes of paying dividends or distributions to shareholders, or for funding
operating expenses, it being understood that proceeds of the Loan shall be used
by Borrower for general corporate purposes of Borrower including Borrower's
acquisition of existing office buildings, and construction and development of
new office buildings owned by Borrower located primarily in existing ▇▇▇▇▇
office parks.
(b) Structural Alterations. Borrower shall not erect or construct
any new structures of any kind or additions or material alterations to existing
buildings or other structures on the Collateral (except interior tenant
improvements), without the Lenders' prior written approval, which will not be
unreasonably withheld or delayed.
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(c) Change in Nature of Business. Borrower shall not make any
material change in the nature of its business as carried on as of the Closing
Date.
(d) Transactions with Subsidiaries. Borrower shall not enter into
any transaction (including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service) with any Subsidiary or
Affiliate of Borrower except in the ordinary course of Borrower's business and
upon fair and reasonable terms that are no less favorable to it than it would
obtain in a comparable arm's length transaction with any third person. Borrower
shall not use proceeds of the Loan for the purpose of capitalizing or of funding
the operating or capital expenses of any Subsidiary or Affiliate of Borrower.
Any loans between the Borrower and any Affiliate or Subsidiary, or among any of
the Affiliates or any Subsidiaries, shall be subordinate to this Loan.
ARTICLE VIII
DEFAULT
SECTION 8.1 Events of Default. Any of the following events (each
a "Default") shall, following the passage of any grace or cure period as
provided below, constitute an Event of Default ("Event of Default"):
(a) Borrower shall fail to make any payment of principal under any
of the Notes on or before the same becomes due and payable on maturity thereof;
or Borrower shall fail to make any payment of interest under any of the Notes,
or any fees, costs or expenses due hereunder or thereunder, within 5 days after
the same becomes due and payable.
(b) Any representation or warranty made by Borrower (or any of its
officers) under or in connection with any Loan Document shall be or become
incorrect or untrue, or shall prove to have been incorrect or misleading in any
material respect when made.
(c) A transfer of any Property in violation of the due on sale
restrictions set forth in Section 5.7.
(d) Borrower shall fail to perform or observe any term, covenant
or agreement (other than a covenant of payment) contained in any Loan Document
on its part to be performed or observed, and such failure shall remain uncured
for 10 days after written notice thereof shall have been given by the Lenders to
Borrower, or if such failure cannot by its nature be cured within such 10 day
period, Borrower shall fail to commence and diligently pursue such cure within
10 days after written notice thereof shall have been given by the Lenders to
Borrower and shall fail to complete such cure within 60 days after the Lenders'
initial written notice of such failure.
(e) An involuntary case or proceeding under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect shall be
commenced against Borrower, and such case or proceeding shall not be dismissed
in 60 days; or a court shall
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enter a decree, or a court or regulatory authority having jurisdiction over
Borrower shall enter an order, appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator, conservator, supervisor, rehabilitator (or
similar official) of Borrower or for any substantial part of its property, or
ordering the winding-up, supervision or liquidation of its affairs.
(f) Borrower shall commence a voluntary case or proceeding under
any applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, shall consent to the entry of an order for relief in an involuntary case
or proceeding under any such law, or shall consent to the appointment of or
taking possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator, conservator, supervisor, rehabilitator (or other similar official)
of Borrower or for any substantial part of its property, or shall make any
general assignment for the benefit of creditors, or shall fail generally to pay
its indebtedness generally as the same becomes due, or shall take any corporate
action in furtherance of any of the foregoing.
(g) A judgment or order for the payment of money in excess of
$2,500,000 shall be rendered against Borrower and either (A) enforcement
proceedings shall have been commenced by any creditor upon such judgment or
order or (B) there shall be any period of 10 consecutive days during which a
stay of enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect.
(h) A default has occurred and is continuing beyond any applicable
grace or cure period under any Debt (other than the Loan) in excess of
$2,500,000.
(i) Any material provision of the Loan Documents relating to the
Lenders's ability to realize on the Collateral following an Event of Default
shall for any reason cease to be valid and binding on Borrower, or Borrower
shall so state in writing.
(j) Any of the Security Agreements shall, as a result of
Borrower's acts or omissions, for any reason, except to the extent permitted by
the terms thereof, cease to create a valid and, upon filing of UCC-1 financing
statement(s), UCC-2 Notice Filings, or UCC-3 continuation statements, as
applicable, perfected first priority security interest in any of the Collateral
purported to be covered, which can be secured or perfected by such means.
(k) Any default has occurred under any of the Notes, Security
Deeds, or any of the other Loan Documents.
(l) Any material adverse change in the financial condition of the
Borrower such that the Borrower is unable to meet its Obligations hereunder or
under any of the other Loan Documents.
(m) Any change in the control of the Borrower or any change in the
management of the Borrower such that any two of the following: ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.
▇. ▇▇▇▇▇▇, and ▇▇▇▇▇ ▇▇▇▇▇ are no longer officers or directors of the Borrower,
and such management personnel
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are not replaced with officers or directors reasonably acceptable to the
Majority Lenders within one hundred twenty (120) days thereof.
(n) Any failure of the Borrower to comply at all times with the
Financial Covenants set forth in Section 3.1.
SECTION 8.2 Remedies following an Event of Default. If an Event
of Default shall occur, then, at the Lenders' option, in addition to Lenders'
remedies set forth in any other Loan Documents or as may be available to the
Lenders at law or in equity, the Lenders may by written notice to Borrower, (A)
declare the Lenders' obligation to make Advances to be terminated, whereupon the
same shall forthwith terminate, and (B) declare the Notes, all accrued and
unpaid interest thereon and all other amounts payable under the Loan Documents
to be, and the same shall thereupon forthwith become, immediately due and
payable without presentment, demand, protest or other notice or formality of any
kind, all of which are hereby expressly waived by Borrower.
SECTION 8.3 Default Interest. In addition to the Lenders'
remedies set forth in Section 8.2, if an Event of Default occurs, then, at the
Lenders' option, all unpaid Obligations shall accrue interest from the date of
Default at the Default Rate.
SECTION 8.4 Remedies Cumulative. No remedy, right or power
conferred upon the Agent or the Lenders is intended to be exclusive of any other
remedy, right or power given hereunder or now or hereafter existing at law, in
equity, or otherwise, and all such remedies, rights and powers shall be
cumulative.
ARTICLE IX
THE AGENT
SECTION 9.1 Appointment, Powers and Immunities.
(a) Each Lender hereby irrevocably appoints FUNB as the
administrative agent to administer the Loan on behalf of all of the Lenders in
accordance with the terms, covenants and conditions of this Agreement, together
with such powers as are specifically delegated to the Agent and are reasonably
incidental thereto. FUNB, by its execution and delivery of this Agreement,
accepts such appointment and agrees to administer the Loan on behalf of all of
the Lenders in accordance with the terms, covenants and conditions of this
Agreement. The voting, consent and approval rights of each Lender for all
matters requiring a vote or the consent or approval of the Lenders will be
proportionate to all other Lenders based upon each Lender's Percentage. The
Agent (i) shall not have any duties or responsibilities except those expressly
set forth in this Agreement and the other Documents, and shall not by reason of
this Agreement or any other Loan Document be a trustee for any Lender; (ii)
shall not be responsible to any Lender for any recitals, statements,
representations or warranties contained in this Agreement or any other Loan
Document, or in any certificate or other document referred to or provided for
in, or received
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by any of them under this Agreement or any other Loan Document, or for the
value, validity, effectiveness, genuineness, enforceability, execution, filing,
registration, collectibility , recording, perfection, existence or sufficiency
of this Agreement or any other Loan Document or any other document referred to
or provided for herein or therein or any property covered thereby or for any
failure by any party to perform any of its obligations hereunder or thereunder,
and shall not have any duty to inquire into or pass upon any of the foregoing
matters; (iii) shall not be required to initiate or conduct any litigation or
collection proceedings hereunder or under any other Loan Document except to the
extent requested by the Majority Lenders, (iv) SHALL NOT BE RESPONSIBLE FOR ANY
MISTAKE OF LAW OR FACT OR ANY ACTION TAKEN OR OMITTED TO BE TAKEN BY IT
HEREUNDER OR UNDER ANY OTHER DOCUMENT OR ANY OTHER LOAN DOCUMENT OR INSTRUMENT
REFERRED TO OR PROVIDED FOR HEREIN OR THEREIN OR IN CONNECTION HEREWITH OR
THEREWITH, INCLUDING, WITHOUT LIMITATION, PURSUANT TO ITS OWN NEGLIGENCE, BUT
NOT INCLUDING AND EXCEPT FOR THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE
AGENT; (v) shall not be bound by or obliged to recognize any agreement among or
between the Borrower, the Agent, and any Lender other than this Agreement and
the other Loan Documents, regardless of whether the Agent has knowledge of the
existence of any such agreement or the terms and provisions thereof; (vi) shall
not be charged with notice or knowledge of any fact or information not herein
set out or provided to the Agent in accordance with the terms of this Agreement
or any other Loan Document; (vii) shall not be responsible for any delay, error,
omission or default of any mail, telegraph, cable or wireless agency or
operator, and (viii) shall not be responsible for the acts or edicts of any
Governmental Authority. The Agent may employ agents and attorneys-in-fact and
shall not be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care.
(b) Without the prior written consent of Agent and all of the
Lenders, Agent shall not (i) modify or amend in any respect whatsoever the
interest rate provisions of the Loan Documents, (ii) increase the Loan Amount
above $200,000,000.00, (iii) extend the Maturity Date, (iv) extend or reduce the
due date for the scheduled payments of principal or interest on the Loan, (v)
amend the definition of Majority Lenders or any requirement that certain actions
be taken only with the consent of a certain number of the Lenders, (vi) change
any Events of Default, (vii) modify or amend the definition of Capitalization
Rate or Advance Rate, (viii) modify or amend the definition of Borrowing Base
Value, or (ix) modify or amend any provision of any Loan Document which by its
terms requires the consent of all of the Lenders for amendment. From time to
time upon Agent's request, each Lender shall execute and deliver such documents
and instruments as may be reasonably necessary to enable Agent to effectively
administer and service the Loan in its capacity as Agent and in the manner
contemplated by the provisions of this Agreement. No amendment or agreement
shall increase the Lender Commitment of any Lender without the written consent
of such Lender.
(c) All information provided to the Agent under or pursuant to the
Loan Documents, and all rights of the Agent to receive or request information,
or to inspect
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information or Property, shall be by the Agent on behalf of the Lenders. If any
Lender requests that it be able to receive or request such information, or make
such inspections, in its own right rather than through the Agent, the Borrower
will cooperate with the Agent and such Lender in order to obtain such
information or make such inspection as such Lender may reasonably require.
(d) The Borrower and any Guarantor shall be entitled to rely upon
a written notice or a written response from the Agent as being pursuant to
concurrence or consent of the Majority Lenders unless otherwise expressly stated
in the Agent's notice or response.
(e) Each Lender shall be responsible for its own costs and
expenses associated with its review of the Loan Documents.
SECTION 9.2 Reliance. The Agent shall be entitled to rely upon
any certification, notice or other communication (including any thereof by
telephone, telex, telecopy, telegram or cable) reasonably believed by it to be
genuine and correct and to have been signed or sent by or on behalf of the
proper person, and upon advice and statements of legal counsel (which may be
counsel for the Borrower), independent accountants and other experts selected by
the Agent. The Agent shall not be required in any way to determine the identity
or authority of any person delivering or executing the same. As to any matters
not expressly provided for by this Agreement or any other Loan Document, the
Agent shall in all cases be fully protected in acting, or in refraining from
acting, hereunder and thereunder in accordance with instructions of the Majority
Lenders, and any action taken or failure to act pursuant thereto shall be
binding on all of the Lenders. If any order, writ, judgment or decree shall be
made or entered by any court affecting the rights, duties and obligations of the
Agent under this Agreement or any other Loan Document, then and in any of such
events the Agent is authorized, in its sole discretion, to rely upon and comply
with such order, writ, judgment or decree which it is advised by legal counsel
of its own choosing is binding upon it under the terms of this Agreement, the
relevant Loan Document or otherwise; and if the Agent complies with any such
order, writ, judgment or decree, then it shall not be liable to any Lender or to
any other Person by reason of such compliance even though such order, writ,
judgment or decree may be subsequently reversed, modified, annulled, set aside
or vacated.
SECTION 9.3 Defaults. The Agent shall not be deemed to have
constructive knowledge of the occurrence of a Default (other than the
non-payment of principal of or interest on the Loan) unless it has received
notice from a Lender or the Borrower specifying such Default and stating that
such notice is a "Notice of Default". In the event that the Agent receives such
a notice of the occurrence of a Default, or whenever the Agent has actual
knowledge of the occurrence of a Default, the Agent shall give prompt written
notice thereof to the Lenders (and shall give each Lender prompt notice of each
such non-payment). The Agent shall (subject to Section 9.7 hereof) take such
action with respect to such Default as shall be directed by the Majority Lenders
and within its rights under the Loan Documents and at law or in equity, provided
that, unless and until the
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Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, permitted
hereby with respect to such Default as it shall deem advisable in the best
interests of the Lenders and within its rights under the Loan Documents in order
to preserve, protect or enhance the collectibility of the Loan, at law or in
equity. Provided, however, that if there is an occurrence of an Event of
Default, then in no event or under any circumstances shall any of the actions
described in Sections 9.1 (b)(i) through (vii) of this Agreement be taken,
without in each instance the written consent of Agent and all of the Lenders.
SECTION 9.4 Rights as a Lender. With respect to the Advances
made, Agent, in its capacity as a Lender hereunder shall have the same rights
and powers hereunder as any other Lender and may exercise the same as though it
were not acting in its agency capacity, and the term "Lender" or "Lenders"
shall, unless the context otherwise indicates, include the Agent in its
individual capacity. The Agent may (without having to account therefor to any
other Lender) as a Lender, and to the same extent as any other Lender, accept
deposits from, lend money to and generally engage in any kind of banking, trust,
letter of credit, agency or other business with the Borrower (and any of its
Subsidiaries) as if it were not acting as the Agent but solely as a Lender. The
Agent may accept fees and other consideration from the Borrower (in addition to
the fees heretofore agreed to between the Borrower and the Agent) for services
in connection with this Agreement or otherwise without having to account for the
same to the Lenders.
SECTION 9.5 Indemnification. The Lenders agree to indemnify the
Agent, its officers, directors, agents and attorneys, ratably in accordance with
each respective Lender's Percentage, for any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever (INCLUDING BUT NOT LIMITED TO,
THE CONSEQUENCES OF THE NEGLIGENCE OF THE AGENT) which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of this Agreement or any other Loan Document or any other documents contemplated
by or referred to herein or therein, or the transactions contemplated hereby or
thereby (including, without limitation, interest, penalties, reasonable
attorneys' fees and amounts paid in settlement in accordance with the terms of
this Section 9, but excluding, unless a Default has occurred and is continuing,
normal administrative costs and expenses incident to the performance of its
agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or of any such other documents, INCLUDING BUT NOT LIMITED TO THE
NEGLIGENCE OF THE AGENT, provided that no Lender shall be liable for any of the
foregoing to the extent they arise from the gross negligence or willful
misconduct of the party to be indemnified, or from the Agent's default in the
express obligations of the Agent to the Lenders provided for in this Agreement.
The obligations of the Lenders under this Section 9.5 shall survive the
termination of this Agreement and the repayment of the Obligations.
SECTION 9.6 Non-Reliance on Agent and Other Lenders. Each Lender
agrees that it has received current financial information with respect to the
Borrower and that it has, independently and without reliance on the Agent or any
other Lender and based
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on such documents and information as it has deemed appropriate, made its own
credit analysis of the Borrower and decision to enter into this Agreement and
that it will, independently and without reliance upon the Agent or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own analysis and decisions in taking or not
taking action under this Agreement or any of the other Loan Documents. The Agent
shall not be required to keep itself informed as to the performance or
observance by any party to this Agreement or any of the other Loan Documents or
any other document referred to or provided for herein or therein or to inspect
the properties or books of the Borrower or any party except as specifically
required by the Loan Documents. Except for notices, reports and other documents
and information expressly required to be furnished to the Lenders by the Agent
hereunder or under the other Loan Documents, the Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition or business of the Borrower (or any
of its Subsidiaries) which may come into the possession of the Agent. Each
Lender assumes all risk of loss in connection with its Lender Commitment in the
Advances to the full extent of its Lender's Percentage therein. The Agent
assumes all risk of loss in connection with its Lender's Percentage in the
Advances to the full extent of its Lender Percentage therein.
SECTION 9.7 Failure to Act. Except for action expressly required
of the Agent, as the case may be, hereunder, or under the other Loan Documents,
the Agent shall in all cases be fully justified in failing or refusing to act
hereunder and thereunder unless it shall receive further assurances to its
satisfaction by the Lenders of their indemnification obligations under Section
9.5 hereof against any and all liability and expense which may be incurred by it
by reason of taking or continuing to take any such action.
SECTION 9.8 Resignation of Agent. Subject to the appointment and
acceptance of a successor Agent as provided below, the Agent may resign at any
time by giving notice thereof to the Lenders and the Borrower. Upon any such
resignation, (i) the Majority Lenders without the consent of the Borrower shall
have the right to appoint a successor Agent so long as such successor Agent is
also a Lender at the time of such appointment and (ii) the Majority Lenders
shall have the right to appoint a successor Agent that is not a Lender at the
time of such appointment so long as the Borrower (if no Event of Default is then
in existence) consents to such appointment (which consent shall not be
unreasonably withheld). If no successor Agent shall have been so appointed by
the Majority Lenders and accepted such appointment within 30 days after the
retiring Agent's giving of notice of resignation, then the retiring Agent may,
on behalf of the Lenders, and with the consent of the Borrower which shall not
be unreasonably withheld, appoint a successor Agent. Any successor Agent shall
be an Eligible Assignee. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations as Agent thereafter arising hereunder and under any other Loan
Documents, but shall not be discharged from any liabilities for its actions as
Agent prior to
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the date of discharge. Such successor Agent shall promptly specify by notice to
the Borrower its principal office. After any retiring Agent's resignation
hereunder as Agent, the provisions of this Section 9 shall continue in effect
for its benefit in respect of any actions taken or omitted to be taken by it
while it was acting as the Agent.
SECTION 9.9 No Partnership. Neither the execution and delivery of
this Agreement nor any of the other Loan Documents nor any interest the Lenders,
the Agent or any of them may now or hereafter have in all or any part of the
Obligations shall create or be construed as creating a partnership, joint
venture or other joint enterprise between the Lenders or among the Lenders and
the Agent. The relationship between the Lenders, on the one hand, and the Agent,
on the other, is and shall be that of principals and agent only, and nothing in
this Agreement or any of the other Loan Documents shall be construed to
constitute the Agent as trustee or other fiduciary for any Lender or to impose
on the Agent any duty, responsibility or obligation other than those expressly
provided for herein and therein.
SECTION 9.10 Collateral. To the extent of each Lender's Percentage,
each Lender shall have a lien upon and security interest in the Collateral. The
respective proportional interests of Lenders shall be equal in lien, and dignity
with each other, without distinction or priority, each Lender having an
undivided interest and participation in the lien or title interest granted or
conveyed under the Security Deeds, the interest in Rents and Leases under the
Lease Assignments, the security interests obtained under the Security
Agreements, and in all other Collateral for the Loan.
ARTICLE X
OBLIGATIONS AND RIGHTS OF THE LENDERS
Lenders shall have the following obligations and rights with respect to
the Loan:
SECTION 10.1 Custody of Loan Documents. All of the original Loan
Documents given in connection with the Loan shall be held by Agent, except that
each Lender shall hold, for its own account, custody and possession the Note
payable to it. Agent will provide each Lender with 1 set of copies of the
executed Loan Documents.
SECTION 10.2 Account Records. Agent will keep a proper record of
all transactions related to the Loan including all receipts and disbursements
under the Loan Documents. Lenders will cooperate with each other in the
maintenance of uniform records and accounts related to the Loan. Agent will from
time to time and upon reasonable request of Lenders, furnish to the Lenders, or
their designated representatives, such information pertaining to the Loan as may
be contained in FUNB's books, records and accounts, and will cause its
designated officers to discuss the Loan with the designated officers of Lenders.
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SECTION 10.3 Collections of Payments. Agent will collect from
Borrower all principal and/or interest due under the Notes, and all other
amounts that may become due or payable under the Loan Documents, including
payments of proceeds of condemnation awards or insurance benefit payments, and
will, to the extent permitted or contemplated under this Agreement and the Loan
Documents, remit the same to Lenders, in accordance with each Lender's
Percentage.
SECTION 10.4 Standard of Care. Agent agrees to exercise the same
degree of care with respect to the Loan as it exercises in making and handling
loans for its own account. Agent does not assume any responsibility for the
solvency, financial condition or representations and warranties of Borrower nor
shall Agent be responsible for Borrower's performance of the Obligations. No
Lender shall be liable to any other Lender except for its willful misconduct or
gross negligence, and in any event, such liability shall not exceed, with
respect to any other Lender, the amount contributed to the Loan by such Lender,
plus interest.
Each Lender agrees to share, in accordance with each Lender's
Percentage in the Loan, in any loss, liability or damage (including, without
limitation, all costs and attorneys fees incurred in defense thereof) arising
from any claim, counterclaim, defense or set off asserted against Lenders, or
either of them, by Borrower or by anyone claiming by, through or under Borrower,
on account of any matter or thing in relation to the Loan or the administration
thereof; provided, however, that no Lender will be obligated to share in any
such loss, liability or damage arising out of the gross negligence, recklessness
or wilful misconduct of the other Lender.
SECTION 10.5 Payment; Set Offs and Banker's Liens. If any Lender
obtains any payment of principal or interest on the respective Note made payable
to it other than by payment through Agent pursuant to the terms hereof, whether
such payment is made by Borrower or another person or entity and whether through
the exercise of a right of set off or banker's lien, such Lender shall promptly
notify the other Lenders of such payment and make such adjustments with the
other Lenders as may be necessary to share such payment ratably among all of the
Lenders to the end that such payment, set off, or banker's lien shall inure to
the benefit of each of the Lenders based upon each Lender's Percentage. All sums
obtained by Lenders by such payments, set offs, and banker's liens shall be
applied to the Loan.
SECTION 10.6 Selection and Adjustment of Interest Rates. Should
Borrower elect any LIBOR Interest Rate as the applicable rate of interest for
any Advance, Agent shall promptly advise each of the Lenders of such election,
and of the actual rate of interest proposed to be charged, and any applicable
costs or fees associated with such election, as calculated by Agent. Agent will
advise each of the Lenders of any change in an applicable rate of interest for
any Advance on the same day the change is announced by telephone advice and will
confirm the same by written notice to each of the Lenders sent on the following
Business Day.
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SECTION 10.7 Disbursements for Protection of Collateral and
Collection and Enforcement of Obligations. Each Lender shall contribute, in
accordance with its Lender Percentage, to any disbursement required for the
protection of any of the Collateral or Lenders' security interest therein,
including disbursements to pay delinquent ad valorem real estate taxes or
insurance premiums; provided, however, that all such disbursements shall be
first approved by Agent. Additionally, each Lender will contribute, in
accordance with its Lender Percentage, to any disbursement required to pay the
costs and expense of collection procedures, including payment of reasonable
attorney's fees, title searches, court costs and bona fide administrative costs
of Agent in taking such action.
ARTICLE XI
ENFORCEMENT OF THE LOAN
Subject to the terms of Section 9.1, the Loan Documents shall be
enforced only as hereinafter provided.
SECTION 11.1 Exercise of Remedies following Event of Default.
Agent shall:
(a) upon the occurrence of any Event of Default; or
(b) upon the written request of the Majority Lenders if any
payment of principal under such Lender's Note is not made on or before its due
date, or if any payment of interest, or other charges, fees or penalties, then
due and payable under such Lender's Note, is not made within 5 days after its
due date; or
(c) promptly in the event that Agent obtains actual (but not
imputed) knowledge of an Event of Default, or promptly following receipt by
Agent of notice of an Event of Default.
on behalf of each of the Lenders, take such appropriate action as Agent may
elect in its reasonable discretion, for collection of the Loan and for
protection of the realization upon the Collateral, including legal action to
enforce the Loan Documents. Such action may be brought by Agent in the name of
Lenders and for their proportionate benefit. Each Lender will cooperate with
Agent in such collection efforts and will furnish to Agent the original of any
Loan Documents held by any Lender and make available its books and records
relating to the Loan. No Lender will take any remedial action following a
Default or Event of Default except in accordance with the provisions of this
Agreement.
SECTION 11.2 Waiver of Default and Modification. No modification,
amendment or waiver of any material provision of the Loan Documents, including,
without limitation, waiver of any Default or Event of Default, or renewal or
extension of the Loan, or change in the terms of the Notes, or release or
substitution of any Collateral, shall be granted without the prior written
approval of Agent.
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SECTION 11.3 Foreclosure or Exercise of Power of Sale. In the
event of a foreclosure and foreclosure sale of any of the Collateral, or the
exercise of any power of sale available to Lenders, no Lender will bid at the
sale without the concurrence of the other Lenders, except as otherwise provided
herein. If a bid is entered by a Lender it shall be deemed to be a proportionate
bid by such Lender in the amount of such Lender's Percentage. Any bid entered
for less than the total balance of the Obligations (including interest and
expenses recoverable from the proceeds of such sale) shall be deemed to have
been entered on behalf of all Lenders and, if such a bid is the successful bid,
the Lender which entered such bid shall cause conveyance of the Collateral
pursuant to such foreclosure sale to be issued to the Lenders, as tenants in
common, in shares equivalent to their respective Lender's Percentage. Any Lender
shall have the right to make a bid in an amount in excess of the total balance
of the Obligations (including interest and expenses which are recoverable from
the proceeds of the foreclosure sale) without concurrence of the other Lenders
and, if such bid is the successful bid, such Lender making such bid shall pay
the other Lenders their Lender's Percentage of the outstanding Obligations and
shall acquire the property for its own account, and the other Lenders shall
thereafter have no further interest in the Collateral so acquired.
SECTION 11.4 Disposition of Collateral After Foreclosure or
Exercise of Power of Sale. In the event of the purchase of any of the Collateral
on behalf of the Lenders at a foreclosure sale or by exercise of power of sale,
the Lenders, as tenants in common, shall share profits and expenses (including a
reasonable fee payable to any manager of the Collateral, and costs, fees and
expenses associated with maintenance and sale of the Collateral) incurred in
connection with the ownership and operation of such Collateral according to
their respective Lender's Percentage. Disposition of such Collateral so
acquired, or the respective interests of the Lenders therein, shall be as
follows:
(a) Upon the written approval of the Majority Lenders, any bona
fide offer by an independent third party for the purchase of any portion of the
foreclosed Collateral may be accepted. All Lenders shall join in any necessary
instruments of conveyance of such Collateral to such party, and the net proceeds
of the sale shall be distributed in accordance with each Lender's Percentage.
(b) No Lender shall sell, assign, pledge or transfer any of its
interest as tenant in common in Collateral acquired at any foreclosure sale,
other than to an Affiliate of such Lender, until such interest is first offered
for sale to the other Lenders. Such offer shall be made in writing, setting
forth the name of the proposed buyer and terms and conditions of such purchase,
and shall be made to the other Lenders upon the same terms and conditions,
except that, if the proposed purchase involves retention of a purchase money
security interest, the remaining Lender shall have the right to prepay the
purchase money obligation without premium or penalty. The remaining Lenders
shall have 15 days from the date of receipt of such offer to accept or reject
it.
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ARTICLE XII
ASSIGNMENTS
SECTION 12.1 Survival; Parties Bound: Successors and Assigns.
(a) All representations, warranties, covenants and agreements made
by or on behalf of the Borrower in connection herewith shall survive the
execution and delivery of the Loan Documents, shall not be affected by any
investigation made by any Person, and shall bind the Borrower and its
successors, trustees, receivers and assigns and inure to the benefit of the
successors and assigns of the Agent and the Lenders; provided, however, that the
Borrower may not assign or transfer any of its rights or obligations hereunder
without the prior written consent of the Agent and all of the Lenders, and any
such assignment or transfer without such consent shall be null and void.
(b) A Lender may assign part of its Lender Commitment to an
Eligible Assignee so long as such assignment shall (1) include the voting rights
and all other rights and obligations attributable thereto, and include a written
assumption by the Eligible Assignee of the assigning Lender's obligations under
the Loan Documents, (2) require the written notice to and written consent of the
Borrower (so long as no Event of Default is then in existence) and the Agent,
such consent not to be unreasonably withheld, (3) be in a minimum amount of
$5,000,000 and in integral multiples of $5,000,000 thereafter, (4) not reduce
the Lender's Lender Commitment to an amount less than $10,000,000, in the case
of any partial assignment of Lender's Commitment, and (5) include payment to the
Agent by the Lender of a service fee for each assignment equal to $3,000.
(c) A Lender may sell participating interests in any of its
Advances so long as (i) the participating Lender shall continue to be liable for
its Lender Commitment and its other obligations under the Loan Documents, (ii)
the Agent, the Borrower and the other Lenders shall continue to deal solely and
directly with the participating Lender in connection with such Lender's rights
and obligations under the Loan Documents, and (iii) the participant may not
require the participating Lender to take or refrain from taking any action under
the Loan Documents that is in conflict with the terms and provisions of the Loan
Documents.
(d) Notwithstanding any provision hereof to the contrary, any
Lender may assign and pledge all or any portion of its Lender Commitment and
Advances to a Federal Reserve Bank; provided, however, that any such assignment
or pledge shall not relieve such Lender from its obligations under the Loan
Documents.
(e) The term of this Agreement shall be until the final maturity
of the Notes and the payment of all amounts due under the Loan Documents.
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ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 Prior Loan Agreement. This Second Amended and
Restated Revolving Credit Loan Agreement amends and restates the Prior Loan
Agreement. The covenants, terms and provisions of this Agreement shall apply and
shall govern the administration of the Loan and the making of Advances from and
after the date of execution of this Agreement.
SECTION 13.2 Amendments, Etc. No amendment, modification, release,
termination or waiver of any provision of this Agreement or the other Loan
Documents shall be effective unless the same shall be in writing and signed by
the Lenders (as required herein) and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
SECTION 13.3 Indemnification and Limitation of Claims. Borrower
hereby indemnifies and agrees to defend, protect and hold the Lenders harmless
and each of their respective officers, directors, employees, attorneys and
agents (collectively, the "Indemnitees") from and against any and all
liabilities, obligations, losses (other than loss of profits), damages,
penalties, actions, judgments, suits, claims, costs, reasonable expenses and
disbursements of any kind or nature whatsoever (excluding any taxes and
including, without limitation, the reasonable fees and disbursements of counsel
for such Indemnitees in connection with any investigative, administrative or
judicial proceeding, whether or not such Indemnitees shall be designated a party
thereto), imposed on, incurred by, or asserted against such Indemnitees by a
party other than Agent or another Lender in any manner relating to or arising
out of (i) this Agreement or the other Loan Documents, or any act, event or
transaction related or attendant thereto, the making and administration of the
Loan, the use or intended use of the proceeds of the Loan, or any of the other
transactions contemplated by the Loan Documents, or (ii) any liabilities and
costs relating to violation of any Governmental Requirements (including without
limitation the Americans with Disabilities Act, regulations and guidelines
promulgated thereunder, and similar state laws and regulations), the past,
present or future operations of Borrower or any Subsidiary or any of their
respective predecessors in interest, or the past, present or future physical
condition of the Collateral (collectively, the "Indemnified Matters"); provided,
however, Borrower shall have no obligation to an Indemnitee hereunder with
respect to (i) Indemnified Matters caused by or resulting from the negligent
acts or omissions of such Indemnitee, as determined by a court of competent
jurisdiction in a non-appealable final judgment, or (ii) any loss, cost, damage,
claim or expense relating to any portion of the Collateral that accrues after
title to such portion of the Collateral is transferred to the Lenders, or its
successors and assigns, by foreclosure, power of sale, deed in lieu of
foreclosure or otherwise. Furthermore, Borrower agrees not to assert any claim
against any of the Indemnitees, on any theory of liability, for punitive damages
arising out of, or in any way in connection with, the Obligations, or the other
matters governed by this Agreement and the other Loan Documents. To the extent
that the undertaking to indemnify, pay and hold harmless set forth in this
paragraph may be unenforceable
57
62
because it is violative of any law or public policy, Borrower shall contribute
the maximum portion which it is permitted to pay and satisfy under applicable
law, to the payment and satisfaction of all Indemnified Matters incurred by the
Indemnitees.
SECTION 13.4 Notices. All notices, demands, requests for consents,
consents and other communications required or permitted hereunder shall be in
writing (including telefax transmission) and shall be given by (a) Prepaid
United States Certified Mail, Return Receipt Requested, (b) hand delivery, (c)
overnight delivery service using a reputable national or regional carrier such
as United Parcel Service or Federal Express, or (d) telefax transmission with
electronic receipt confirmation, to such party, addressed to it, at its address
or telefax number set forth below, or at such other address or telefax number as
such party may hereafter specify for the purpose of notice to the other party.
Each such notice, request or communication shall be effective (a) if sent by
United States Certified Mail, Return Receipt Requested, 3 Business Days
following the postmark, (b) if sent by hand delivery, upon receipt thereof, (c)
if sent by overnight delivery service, on the next Business Day, or (d) if sent
by telefax transmission, on the same Business Day, to the address of the parties
specified below.
If to Borrower:
▇▇▇▇▇ Equity, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇
Telefax No. ▇▇▇-▇▇▇-▇▇▇▇
If to the Lenders:
First Union National Bank
c/o First Union Capital Markets Group
One First Union Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇/REIT Banking Group
Telefax No. 704/383-6205
and
Guaranty Federal Savings Bank
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Telefax No. 214/360-1678
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and
AmSouth Bank
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telefax No.205/326-4075
and
Citizens Bank of Rhode Island
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telefax No. 401/282-4485
and
Compass Bank
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telefax No. 904/564-8906
SECTION 13.5 No Waiver; Remedies. No failure on the part of the
Agent or the Lenders to exercise, and no delay in exercising, any right under
any Loan Document shall operate as a waiver thereof; nor shall any single or
partial exercise of any right under any Loan Document preclude any other or
further exercise thereof or the exercise of any other right. The remedies
provided in the Loan Documents are cumulative and not exclusive of any remedies
provided at law or in equity.
SECTION 13.6 Binding Effect; Assignment. This Agreement shall be
binding upon and inure to the benefit of Borrower, the Agent, and the Lenders
and their respective successors and assigns, except Borrower shall not have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Lenders.
SECTION 13.7 Governing Law; Jurisdiction and Venue. The rights and
obligations of Borrower, the Agent, and the Lenders with respect to this
Agreement and the Notes shall be governed by, and construed in accordance with,
the laws of the State of North Carolina, and the rights and obligations of
Borrower, the Agent, and the Lenders with respect to any other Loan Documents
shall be governed by, and construed in accordance with, the laws of the State in
which the Collateral is located. Any suit, action or proceeding may be brought
against Borrower under the Loan Documents in the courts of the State in which
the Collateral is located or, to the extent not otherwise required by the laws
of the State in which the Collateral is located in the courts of the County of
Mecklenburg, State
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of North Carolina, or the United States District Court for the Western District
of North Carolina, as the Agent in its sole discretion may elect, and Borrower
hereby accepts the nonexclusive jurisdiction of those courts for the purpose of
any suit, action, or proceeding. In addition, Borrower hereby irrevocably
waives, to the fullest extent permitted by law, any objection which Borrower may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to the Loan Documents or any judgment entered by any
court in respect of any part thereof, and hereby further irrevocably waives any
claim that any suit, action or proceeding brought in the jurisdiction selected
by the Agent has been brought in an inconvenient forum. Borrower irrevocably
agrees that any pleadings or service of process may be had on Borrower by
mailing to Borrower at the address set forth in Section 13.4 by certified or
registered mail and such mailing shall be effective for all purposes, including
the establishment of personal jurisdiction of the court in any such action.
SECTION 13.8 Severability. Any provision of this Agreement or the
other Loan Documents which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remainder of such provision or the
remaining provisions hereof or thereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
SECTION 13.9 Headings. Section headings used in this Agreement are
for convenience only and shall not affect the construction of this Agreement.
SECTION 13.10 Counterparts. This Agreement may be executed in two
or more counterparts, and by the different parties on separate counterparts,
each of which shall be deemed an original, but all such counterparts shall
together constitute one and the same instrument, and it shall not be necessary
in making proof of this Agreement to produce or account for more than one such
counterpart.
SECTION 13.11 WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, BORROWER, THE AGENT, AND THE LENDERS, THEIR RESPECTIVE
SUCCESSORS AND ASSIGNS (ALL OF WHOM ARE HEREINAFTER REFERRED TO AS THE
"PARTIES") EACH ACKNOWLEDGE AND AGREE THAT NONE OF THEM SHALL SEEK A JURY TRIAL
IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM, OR ANY OTHER LITIGATION OR PROCEDURE
BASED UPON OR ARISING OUT OF THE LOAN OR THE LOAN DOCUMENTS, ANY COLLATERAL OR
THE DEALINGS OR THE RELATIONSHIP BETWEEN THE PARTIES RELATED THERETO. NONE OF
THE PARTIES SHALL SEEK TO CONSOLIDATE ANY SUCH ACTION INTO ANY OTHER ACTION IN
WHICH A JURY TRIAL HAS NOT BEEN WAIVED. THE PROVISIONS OF THIS PARAGRAPH HAVE
BEEN FULLY NEGOTIATED BY THE PARTIES, ARE MADE KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY, AND CONSTITUTE A MATERIAL INDUCEMENT FOR THE LENDERS TO MAKE THE
LOAN TO BORROWER, AND SHALL BE SUBJECT TO NO EXCEPTIONS.
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65
SECTION 13.12 Transfer of Collateral to Special Purpose Entity.
Notwithstanding the due on sale clause restricting transfer of the Collateral in
Section 5.7, and subject to the prior written approval of the Agent and the
restrictions contained in this section, Borrower may transfer all of the
Collateral in any State to a special purpose entity ("SPE") formed specifically
for the purpose of taking title to all of the Collateral in such State to reduce
franchise tax liability in accordance with the applicable law of such State. In
order to obtain approval of the transfer by the Agent, Borrower shall provide
the Agent with a complete set of organizational documents for the SPE,
including, without limitation, articles of incorporation, bylaws, corporate
resolutions, certificates of good standing, certificates of existence,
authorizations to transact business in the State, articles of organization,
operating agreements, management agreements, agency agreements, partnership and
limited partnership agreements, joint venture agreements, certificates of
limited partnership, and certificates of authority, all as applicable. Borrower
shall also submit copies of all proposed conveyance documents in connection with
any such transfer, and Borrower will pay and indemnify Agent and the Lenders
from and against any and all costs, fees, expenses, or intangible, documentary
stamp tax, or other taxes associated therewith, or with Lenders' review of such
documentation. Agent shall have the right to approve such documents in its
reasonable discretion. Notwithstanding the foregoing, Agent shall have the right
to prohibit the transfer of any Collateral to an SPE if such SPE is not a
wholly-owned Subsidiary, or a limited partnership in which the general partner
and limited partners are not wholly-owned Subsidiaries, or a limited liability
company in which the member or members are not wholly-owned Subsidiaries, of
▇▇▇▇▇, or is not otherwise controlled by ▇▇▇▇▇ in a manner acceptable to the
Lenders in their sole discretion. The Borrower shall effect any such transfer of
Collateral only after receipt of written notice from the Agent approving such
transfer, and Borrower shall convey any such Collateral by a deed reviewed and
approved by Agent in its reasonable discretion. The transferee SPE shall also
execute an Assumption Agreement in the form attached hereto as Exhibit K,
pursuant to which such SPE shall become a Borrower under the Loan, and further
pursuant to which such SPE shall agree to assume all of the obligations of the
Borrower under this Agreement, the Notes and the other Loan Documents and to
abide by all of the terms and conditions thereof including, without limitation,
the Financial Covenants set forth in Section 3.1. The Assumption Agreement shall
explicitly provide that such assumption of the Loan by the SPE shall not release
the Borrower from any obligations under the Loan Documents. In the event of any
Default or event which with notice or the passage of time would constitute a
Default hereunder, Borrower shall be prohibited from making any transfer of any
Collateral hereunder. Notwithstanding anything herein to the contrary,
Borrower's transfer of Collateral to an SPE in accordance with the requirements
of this subsection, shall not constitute a violation of any representation or
warranty herein or render any such representation or warranty untrue, which, but
for the transfer to the SPE would otherwise be true and accurate in all
respects.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, Borrower, the Agent, and the Lenders have caused
this Agreement to be executed as of the date first above written.
BORROWER:
▇▇▇▇▇ EQUITY, INC., a Florida corporation
By: /s/ G. ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
Name: G. ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------
Title: Treasurer
--------------------------------------
AGENT:
FIRST UNION NATIONAL BANK, a national
association, as Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Title: Vice President
----------------------------
LENDERS:
FIRST UNION NATIONAL BANK, a national
association
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Title: Vice President
----------------------------
GUARANTY FEDERAL BANK, F.S.B., a
federal savings bank
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Title: Vice President
----------------------------
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AMSOUTH BANK, a state banking corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
---------------------------------------
Title: Vice President
----------------------------
CITIZENS BANK OF RHODE ISLAND, a
Rhode Island financial institution
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Title: Vice President
----------------------------
COMPASS BANK, an Alabama banking
corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Title: Vice President
----------------------------
SCHEDULE OF EXHIBITS:
Exhibit A - Description of Real Property
Subset 1 - Existing Properties Included Within Collateral
Subset 2 - New Properties Included Within Collateral
Exhibit B - Summary Requirements for Additions to Collateral Pool Properties
Exhibit C - Notice of Swing Line Borrowing
Exhibit D - Minimum Standards and Supplementary Requirements for Surveys
Exhibit E - Minimum Title Standards
Exhibit F - Form of Certificate of Compliance with Use and Occupancy Laws
Exhibit G - Schedule of Borrower's Subsidiaries
Exhibit H - Schedule of Subsidiaries' Interest in Collateral
Exhibit I - Form of Quit Claim Deed with Reservations and Grants of Easements
Exhibit J - Form of Borrowing Compliance Certificate
Exhibit K - Form of Assumption Agreement
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EXHIBIT A - DESCRIPTION OF REAL PROPERTY
[insert metes and bounds description of each building constituting Collateral]
69
SUBSET 1 - EXISTING PROPERTIES INCLUDED WITHIN COLLATERAL
DeKalb County, Georgia
----------------------
Columbia Building ▇▇▇▇▇▇ Building
Cornell Building Oglethorpe Building
Dartmouth Building Rutgers Building
Drake Building Stanford Building
Harvard Building Stetson Building
▇▇▇▇▇▇▇ Building Vanderbilt Building
Lincoln Building ▇▇▇▇▇▇▇▇ Building
Yale Building
Guilford County, North Carolina
-------------------------------
Asheville Building Lenoir Building
▇▇▇▇▇ Building ▇▇▇▇▇▇▇▇ Building
▇▇▇▇▇▇▇▇▇ Building Pinehurst Building
Hickory Building Rockingham Building
Kinston Building Salem Building
▇▇▇▇▇ Building Wilmington Building
Wrightsville Building
Mecklenburg County, North Carolina
----------------------------------
Beaufort Building ▇▇▇▇▇ Building
Brunswick Building Kogerama Building
Catawba Building Rowan Building
Davie Building ▇▇▇▇▇▇▇▇▇▇ Building
Granville Building Scotland Building
Hatteras Building ▇▇▇▇▇▇ Building
Greenville County, South Carolina
---------------------------------
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇
SUBSET 2 - NEW PROPERTIES INCLUDED WITHIN COLLATERAL
Jefferson County, Alabama
-------------------------
3700 Building
3800 Building
4100 Building
4200 Building
Buildings A-F & Cinema, The Shops at the Colonnade
DeKalb County, Georgia
----------------------
Cambridge Building
Colgate Building
Davidson Building
Duke Building
Fordham Building
McGill Building
Oxford Building
Tulane Building
Gwinnett County, Georgia
------------------------
Gwinnett Building
Bexar County, Texas
-------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇
EXHIBIT B - SUMMARY REQUIREMENTS FOR ADDITIONS TO COLLATERAL POOL PROPERTIES
[attach from Loan Commitment]
72
EXHIBIT C - NOTICE OF SWING LINE BORROWING
73
EXHIBIT D - MINIMUM STANDARDS AND SUPPLEMENTARY REQUIREMENTS FOR SURVEYS
[attach from Loan Commitment]
74
EXHIBIT E - MINIMUM TITLE STANDARDS
[attach from Loan Commitment]
75
EXHIBIT F - FORM OF CERTIFICATE OF COMPLIANCE WITH USE AND OCCUPANCY LAWS
CERTIFICATE OF COMPLIANCE WITH USE AND OCCUPANCY LAWS
The undersigned, being the ____________________________ of ▇▇▇▇▇
EQUITY, INC., a Florida corporation ("▇▇▇▇▇") does hereby, on behalf of ▇▇▇▇▇
and by authority duly given, certify to FIRST UNION NATIONAL BANK, a national
association ("Agent"), AmSOUTH BANK, a state banking corporation, GUARANTY
FEDERAL BANK, F.S.B., a federal savings bank, CITIZENS BANK OF RHODE ISLAND, a
Rhode Island financial institution, and COMPASS BANK, an Alabama banking
corporation (collectively with the Agent, the "Lenders") the following as of the
date hereof:
1. ▇▇▇▇▇ understands that the Lenders are relying upon this
Certificate, and will continue to rely upon this Certificate, in connection with
the transactions contemplated in that certain Second Amended and Restated
Revolving Credit Loan Agreement dated as of December 30, 1998, by and among
▇▇▇▇▇ and the Lenders (the "Loan Agreement"). All capitalized terms used herein
and not defined herein shall have the meanings given to them in the Loan
Agreement.
2. To the best of ▇▇▇▇▇'▇ knowledge and except as disclosed on
Exhibit A attached hereto, the Collateral encumbered by the Loan Documents and
the use thereof by ▇▇▇▇▇, is in material compliance with all laws, ordinances,
rules and regulations of all governmental authorities having jurisdiction over
the Collateral, including, but not limited to, all applicable zoning, building,
occupancy, land use and environmental requirements of all governmental
authorities having jurisdiction over the Collateral, except state and federal
laws and regulations governing facilities accessibility for disabled persons
(such as the Americans with Disabilities Act Accessibility Guidelines) (the
laws, ordinances, rules and regulations referred to above being collectively
referred to as the "Use and Occupancy Laws").
3. Certificates of compliance with the Use and Occupancy Laws, if
issued in the ordinary course of business by the applicable governmental
authority, have been issued with respect to the Collateral and those
certificates have not been revoked.
4. ▇▇▇▇▇ has received no notice from any governmental body,
agency or department or from any other source that the Collateral, or ▇▇▇▇▇'▇
use thereof, is in violation of or conflict with any of the Use and Occupancy
Laws.
5. ▇▇▇▇▇ understands and agrees that it has an affirmative duty
to promptly notify the Lenders upon its becoming aware of, or upon its receipt
of notice regarding, any assertion by a governmental authority, or any action or
proceeding commenced by any person, seeking damages relating to, or seeking to
cause or enforce compliance with, the Use and Occupancy Laws. Such notice shall
be in writing and shall specifically identify the nature of such assertion,
action or proceeding, and the Collateral affected thereby.
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6. ▇▇▇▇▇ understands and agrees that it has an affirmative duty
to promptly remedy any noncompliance with the Use and Occupancy Laws upon
written request therefor by the Lenders following any assertion by a
governmental authority, or any action or proceeding commenced by any person,
seeking damages relating to, or seeking to cause or enforce compliance with, the
Use and Occupancy Laws. ▇▇▇▇▇ hereby indemnifies and agrees to hold harmless the
Lenders from and against all claims, demands and expenses related to such claims
and demands, including reasonable attorneys' fees and paralegals' fees, arising
from any noncompliance with the Use and Occupancy Laws; provided, however, this
indemnity will not extend to any damage, liability or loss resulting from the
negligence, recklessness or wilful misconduct of the Lenders (it being
understood, however, that none of the Lenders will be deemed to have, or to have
assumed, any duty to confirm, cause, guaranty or underwrite, compliance of the
Collateral with the Use and Occupancy Laws).
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Certificate as of the 30th day of December, 1998.
▇▇▇▇▇ EQUITY, INC., a Florida
corporation
By:
-----------------------------------------
Name:
---------------------------------------
Its:
----------------------------------------
STATE OF )
---------------------------
COUNTY OF )
--------------------------
The foregoing instrument was acknowledged before me this _____ day of
______________, 199___, by ____________________________________________, the
___________________ of ▇▇▇▇▇ EQUITY, INC., a Florida corporation, on behalf of
the corporation, who either ____ is personally known to me or ____ has produced
identification in the form of _____________ driver's license.
--------------------------------------------
Print Name:
---------------------------------
Notary Public, State of
---------------------
Commission No.
------------------------------
My Commission Expires:
----------------------
[NOTARIAL SEAL]
77
EXHIBIT G - SCHEDULE OF BORROWER'S SUBSIDIARIES
Entities to be consolidated in KE's Financial Statement:
SOUTHEAST PROPERTIES HOLDING CORPORATION: ("Southeast") A Florida Corporation
wholly-owned by ▇▇▇▇▇ Equity, Inc. Pursuant to the Merger of KPI into ▇▇▇▇▇
Equity, Southeast became the managing general partner of The ▇▇▇▇▇ Partnership,
Ltd. Southeast was responsible for handling the liquidation of The ▇▇▇▇▇
Partnership, Ltd.
▇▇▇▇▇ REAL ESTATE SERVICES, INC.: A Florida corporation wholly-owned by ▇▇▇▇▇
Equity, manages 21 office buildings owned by Centoff Realty Company, Inc., a
subsidiary of ▇▇▇▇▇▇ Guaranty Trust Company of New York.
78
EXHIBIT H - SCHEDULE OF SUBSIDIARIES' INTEREST IN COLLATERAL
NONE
79
Prepared by and Return to
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Martin, Ade, ▇▇▇▇▇▇▇▇▇▇ & Mickler P.A.
▇.▇. ▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
EXHIBIT I - FORM OF RELEASE DEED
For Clerk's Use Only
QUIT CLAIM DEED WITH RESERVATIONS
AND GRANTS OF EASEMENTS
WHEREAS, __________________________________, a national banking
association (the "Trustee"), is the trustee under that certain Deed of Trust
from ▇▇▇▇▇ EQUITY, INC., a Florida corporation ("KEI"), recorded in ____________
Book _____, page _____, of the public records of __________ County,
_______________, an Assignment of Leases and Rents recorded in _____________
Book ______, page _____, and a financing statement recorded in _______ Book
_____, page _____, of said records (collectively, the "Security Instrument");
and
WHEREAS, the Trustee has been requested to release the premises
hereinafter described, from the lien and operation of the Security Instrument
and to quit claim Trustee's interest therein to KEI; and
WHEREAS, the Trustee will retain an interest in certain properties
adjacent to the property conveyed hereby.
NOW, THEREFORE, for valuable consideration, the Trustee does hereby
grant, convey, transfer and quit claim to KEI all of Trustee's interest in that
parcel of land more particularly described on Exhibit A attached hereto (the
"Property"), reserving to Trustee the following described easements over the
Property and granting to KEI easements over the lands retained by Trustee, all
such easements being subject to the terms and conditions contained herein.
1. Reservation of Access Easements. Trustee hereby reserves unto
Trustee a non-exclusive, perpetual easement over, across and upon the parcel of
land described in Exhibit B attached hereto ("Parcel 1") for vehicular and
pedestrian ingress and egress.
2. Grant of Access Easement. Trustee hereby grants to KEI, and
subordinates the lien of the Security Instrument to, a non-exclusive, perpetual
easement over, across and upon the parcel of land described in Exhibit C
attached hereto ("Parcel 2") for vehicular and pedestrian ingress and egress.
3. Reservation of Water/Sewer Utility Easements. Trustee hereby
reserves a non-exclusive, perpetual easement over, under, across and upon the
parcel of land described in Exhibit D attached hereto ("Parcel 3") for the
construction, operation, repair and maintenance of [water/sanitary sewer]
utility lines.
80
4. Grant of Water/Sewer Utility Easement. Trustee hereby grants
to KEI, and subordinates the lien of the Security Instrument to a non-exclusive,
perpetual easement over, under, across and upon the parcel of land described in
Exhibit E attached hereto ("Parcel 4") for the construction, operation, repair
and maintenance of [water/sanitary sewer] utility lines.
5. Reservation of Drainage Easement. Trustee hereby reserves a
non-exclusive, perpetual easement under and through the parcel of land described
in Exhibit F attached hereto ("Parcel 5") for the construction, operation,
repair and maintenance of storm water drainage. The easement reserved pursuant
to this paragraph 5 for storm water drainage is strictly for the placement and
use of underground improvements and lines, and nothing herein shall permit the
placement of improvements or structures at or above surface level.
6. Reservation of Drainage Easement. Trustee hereby grants to
KEI, and subordinates the lien of the Security Instrument to a non-exclusive,
perpetual easement under and through the parcel of land described in Exhibit C
attached hereto ("Parcel 3") for the construction, operation, repair and
maintenance of storm water drainage. The easement granted pursuant to this
paragraph 6 for storm water drainage is strictly for the placement and use of
underground improvements and lines, and nothing herein shall permit the
placement of improvements or structures at or above surface level.
7. Each party shall have the right to have landscaping, roadways,
parking and other paving and related improvements over and upon such of ▇▇▇▇▇▇
▇, ▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇ 5, and Parcel 6 as are owned by such party; provided,
however, that the fee owner shall have no right to construct or place any
buildings or other improvements over and upon such Parcels which would
materially impair or interfere with the intended purpose of such easement or
violate the terms of any permit required for the operation of the facilities
therein. Without limiting the foregoing, all parties hereto consent to the
existing improvements within such Parcels.
8. Maintenance and Repair of Access Easement Areas. The owner
owning fee title thereto shall repair and maintain Parcel 1 and Parcel 2
(including, but not limited to the paving, striping, landscaping and lighting
thereon) in such a condition so as to permit the reasonably unobstructed use and
enjoyment of the easements herein granted.
9. Maintenance and Repair of Easement Areas other than Access
Easement Areas. Each party shall maintain and repair all storm water drainage,
water and sanitary sewer facilities and lines used exclusively by it, and shall
also maintain and repair all other storm water drainage, water and sanitary
sewer facilities and lines located on lands owned in fee by such party which are
used by Trustee and KEI. All maintenance and repair work performed by KEI and
Trustee shall be done only with reasonable prior written notice to the other and
at such times and in such manner so as to reasonably avoid interference with the
other's use of its lands and the business conducted thereon. All maintenance and
repair work performed by KEI and Trustee shall be completed in a timely and
first class
81
manner, and the premises shall be restored to substantially the same condition
as existed prior to the need for the maintenance or repair (including any
repaving, resurfacing or relandscaping of the surface necessitated by the
maintenance or repair). The party performing or having performed the maintenance
or repair shall indemnify and hold harmless the fee owner of the parcel for any
cost, loss, damage or expense arising from said maintenance or repair.
10. Cost Sharing. Each owner shall bear the total cost of
maintaining any storm water drainage and water and sanitary sewer utility
facilities and lines serving only such owner's lands. The cost to maintain any
storm water drainage, or water or sanitary sewer utility facilities or lines,
the use of which is shared by more than one owner, shall be apportioned among
the owners based upon the following parameters. For storm water drainage and
retention, and ingress and egress easements, the cost of maintenance shall be
apportioned based upon the respective land area of the lands served by such
facilities. With respect to water and sanitary sewer lines, the cost of
maintenance shall be apportioned based upon the number of enclosed, heated
square feet within the improvements located on the respective lands served by
such facilities.
11. Taxes. Each owner of land on which a Parcel is located shall
pay, prior to delinquency, all taxes assessed against its respective land, and
upon request, furnish proof of payment to the other owner.
12. Exercise of Easement Rights. The exercise of the easement
rights granted herein shall be conducted so as not to unreasonably interfere
with the use and enjoyment of the other persons entitled to use or enjoy the
respective parcels affected by this Agreement. The owner of the servient estate
of any easement granted hereunder shall have the right to use the relevant
easement area for any purpose which does not unreasonably interfere with or
impair the reasonable use and benefit of such easement for its intended
purposes.
13. Indemnity. No fee owner of any Parcel under this Agreement
shall be responsible to any other owner, or to any of the other owner's agents,
employees, tenants, invitees or licensees for any loss, expense or damage other
than such loss, expense or damage as is caused by the negligence or other fault
of any such fee owner, its agents, contractors or employees. Each owner agrees
to indemnify and hold the other owner harmless from any and all liability, loss,
expense, damage (including attorneys' fees and paralegals' fees) and claims
arising from or alleged to arise from use of the easements granted under this
Agreement by such first owner's agents, contractors, employees, tenants,
invitees or licensees.
14. Default and Remedies.
a. In General. In the event of a breach by any party
under this Agreement of any obligation set forth under this Agreement, the
non-breaching party shall be entitled to injunctive relief mandating compliance
with this Agreement and to obtain a
82
decree specifically enforcing the performance of the obligation; the parties
acknowledge and stipulate the inadequacy of legal remedies and the irreparable
harm which would be caused by any such breach. Notwithstanding the foregoing,
each non-breaching party shall also be entitled to relief by any and all other
available, legal and equitable remedies from the consequences of such breach.
Any costs and expenses of such proceeding including reasonable attorneys' and
paralegals' fees, shall be paid by the breaching party. No breach of the
provisions of this Agreement shall entitle any owner or any third party to
cancel, rescind and/or otherwise terminate this Agreement, but such limitation
shall not affect in any manner any of the other rights and remedies which such
party may have under this Agreement by reason of any breach of the provisions of
this Agreement. No breach of the provisions of this Agreement shall defeat or
render invalid the lien of any mortgage made in good faith for value covering
any part of the Parcels under this Agreement or any improvements thereon.
b. Self Help. In addition to those remedies provided
above, if any party (the "Defaulting Party") shall default in the performance of
an obligation of such Defaulting Party under this Agreement, which default
adversely affects any other owner (the "Affected Party"), the Affected Party,
after 30 days' prior written notice to the Defaulting Party and any Mortgagee
(as hereinafter defined) having a lien on the parcel held by the Defaulting
Party (providing that such Mortgagee, as the case may be, shall have given
written notice to the Affected Party of the name and address of such Mortgagee),
or, in the event of any emergency, after such notice as is practical under the
circumstances, shall have the right to perform such obligation on behalf of the
Defaulting Party. In such event, if the Affected Party does, in fact, perform
such obligation on behalf of the Defaulting Party, the Defaulting Party shall
promptly, after being given written notice of the fact and amount of such
expenditure by the Affected Party, reimburse the Affected Party for the
Defaulting Party's share of the reasonable cost thereof (not exceeding
prevailing rates for like or similar work and materials, as applicable),
together with interest thereon from the date of the Affected Party's outlay at a
rate (the "Default Rate") equal to twelve percent (12.0%) per annum, plus
reasonable collection fees.
15. Mortgagee Rights. The owner and holder of any mortgage lien,
deed of trust, or similar instrument encumbering lands benefitted by a Parcel,
or part thereof (a "Mortgagee") shall have the same rights as its respective
mortgagor hereunder, including the right to cure defaults of its mortgagor and
to seek curative actions and exercise enforcement rights under this Agreement.
16. Notices and Communications. All notices, requests, demands and
other communications hereunder shall be in writing and transmitted to the other
party or parties by either (i) hand or courier delivery; (ii) Federal Express or
similar overnight courier delivery; or (iii) U.S. certified mail, return receipt
requested, postage prepaid. All notices are to be hand delivered or mailed to
the addresses indicated on the address of the party as shown by the tax rolls or
to such other address as shall be furnished in writing by any party to the other
parties.
83
17. Duration of Easements. The easements herein granted (a) are
perpetual; (b) are non-exclusive; (c) run with the land; and (d) are binding
upon all and inure to the benefit or, as the case may be, burden of all the
assigns and successors of the respective owners.
18. No Dedication. Nothing contained herein shall create any
easement or other rights in the respective parcels in the general public;
provided, however, that this provision shall not restrict the intended use by
the grantees (and their respective successors, assigns, tenants, invitees,
guests and customers) of the easements herein granted.
IN WITNESS WHEREOF, the parties have executed this instrument on the
____ day of ______________, 1998.
[APPROPRIATE SIGNATURE BLOCKS AND ACKNOWLEDGMENTS TO BE INSERTED]
84
EXHIBIT J - FORM OF BORROWING COMPLIANCE CERTIFICATE
BORROWING COMPLIANCE CERTIFICATE
The undersigned, _______________________________________, the
___________________________ of ▇▇▇▇▇ Equity, Inc. ( the "Borrower") hereby
certifies to First Union National Bank (the "Agent"), __________________,
_______________, and ________________ (collectively with the Agent, the
"Lenders"), the following pursuant to Section 3.1(c) and 3.1(d) of Second
Amended and Restated Revolving Credit Loan Agreement dated as of December ___,
1998 between Borrower and Agent for the benefit of the Lenders (as amended,
supplemented or restated from time to time, the "Loan Agreement") (capitalized
terms not otherwise defined in this Certificate will have the meanings assigned
to such terms in the Loan Agreement):
1. Pursuant to Article III of the Loan Agreement, Borrower has
requested an Advance in the amount of $_________________ for disbursement on
______________, 199___ (the "Funding Date");
2. After giving effect to such Advance, the outstanding principal
balance of the Loan as of the Funding Date will be $___________________. The
undersigned has reviewed and is familiar with the terms of the Loan Agreement
and has made a review of the transactions, financial condition and other affairs
of Borrower for the relevant accounting period ending on _________________,
19__ (the "Current Accounting Period") and, on the basis thereof:
(a) Schedule 1 attached hereto accurately and completely
sets forth the calculations required to establish Borrower's compliance
with the Financial Covenants set forth in Section 3.1(a) of the Loan
Agreement as of the date of the financial statements for the Current
Accounting Period; and
(b) The aggregate outstanding principal amount of the
Loan, after giving effect to such Advance does not exceed the maximum
borrowing availability as calculated on Exhibit C of the Loan
Agreement.
3. As of the date hereof and as of the Funding Date:
(a) Borrower is in material compliance with the Financial
Covenants set forth in Section 3.1(a) of the Loan Agreement, both
before and after giving effect to such Advance and to the application
of proceeds therefrom;
(b) All of the Collateral is in material compliance with
all of the eligibility parameters set forth in Section 3.3 of the Loan
Agreement;
(c) Borrower is in material compliance with all of the
terms, covenants and conditions of the Loan Documents, no Default or
Event of Default presently exists or is continuing, and no event or
condition has occurred or is continuing, or would result from such
Advance or from the application of proceeds therefrom, which would
constitute a Default or Event of Default; and
(d) Borrower's representations and warranties set forth
in Section 6.1 of the Loan Agreement remain true and correct in all
material respects, both before and after giving effect to such Advance
and to the application of proceeds therefrom, except to the extent such
representations and warranties specifically relate to an earlier date
or such representations or warranties have become untrue by reason of
events or conditions otherwise permitted under the Loan Agreement or
the other Loan Documents.
IN WITNESS WHEREOF, the undersigned has signed this Borrowing
Compliance Certificate on behalf of Borrower on and as of _________________,
199___.
--------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
[this document must be signed by Borrower's Chief Financial
Officer, Chief Accounting Officer or Treasurer]
[this document must include attached Schedule 1 Financial
Covenant compliance calculations]3
85
EXHIBIT K - FORM OF ASSUMPTION AGREEMENT
ASSUMPTION AGREEMENT
This Assumption Agreement (the "Agreement") is made and entered into as
of this ______ day of ________, 1998, by and between________________________ a
___________________________ (corporation, limited liability, limited
partnership) (the "SPE"), and First Union National Bank, as Agent (the "Agent")
for the Lenders under that certain Second Amended and Restated Revolving Credit
Loan Agreement dated as of December ___, 1998, between ▇▇▇▇▇ Equity, Inc., a
Florida corporation ("▇▇▇▇▇"), the Agent, and the Lenders (the "Loan
Agreement").
WHEREAS, ▇▇▇▇▇ has obtained the written approval of Agent to transfer
all of the Collateral in the State of ________ to the SPE pursuant to that
certain letter from the Agent to ▇▇▇▇▇ dated _________; and
WHEREAS, the SPE has been created by ▇▇▇▇▇ as a wholly owned Subsidiary
functioning as a special purpose entity to acquire title to all of the
Collateral in the State of ________; and
WHEREAS, to induce the Agent to grant its approval of the transfer of
the Collateral to the SPE, the SPE has agreed to enter into this Agreement,
pursuant to which the SPE shall assume all of the terms and conditions of the
Notes, the Loan Agreement, the Security Deeds recorded in the State of _______,
and all of the other Loan Documents;
NOW, THEREFORE, in consideration of the premises contained herein and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the SPE, ▇▇▇▇▇ and the Agent hereby agree as follows:
1. The recitals set forth above are true and correct and are
incorporated herein by this reference.
2. The SPE hereby assumes and agrees to perform all of ▇▇▇▇▇'▇
obligations and duties including, but not limited to all of ▇▇▇▇▇'▇ repayment
obligations under the Loan, the Notes, the Loan Agreement, and all of the other
Loan Documents from and after the date of this Agreement. The SPE hereby
acknowledges that the Collateral transferred to it by ▇▇▇▇▇ in the State of
_________ is subject to that certain Mortgage, Security Agreement, and
Assignment of Rents and Leases recorded in Official Records Book ______, Page
______, of the public records of _________ County, ________ (the "Mortgage"). By
execution hereof, the SPE agrees to abide by all of the terms and conditions of
said Mortgage.
3. The Agent, by execution hereof, consents to the transfer of
the Collateral subject to the SPE's execution of this Agreement assuming of all
the terms and conditions of each of the Notes, the Loan Agreement, the Mortgage,
and each of the other Loan Documents.
86
4. By execution hereof and notwithstanding the SPE's assumption
of ▇▇▇▇▇'▇ duties and obligations under the Loan Documents, ▇▇▇▇▇ ratifies and
confirms all of its obligations under the Notes, the Loan Agreement, and the
other Loan Documents, and ▇▇▇▇▇ acknowledges that it remains fully liable for
all of its obligations thereunder.
5. Execution of this Agreement shall not release the Borrower, or
any existing SPE, from any of its obligations as a Borrower under the Loan.
6. Capitalized terms not defined herein shall have the meanings
ascribed to them in the Loan Agreement.
IN WITNESS WHEREOF, ▇▇▇▇▇, the SPE, and the Agent have executed this
Agreement as of the date first written above.
SPE:
By:
-------------------------------------
Name
Its:
------------------------------------
▇▇▇▇▇ EQUITY, INC., a Florida corporation:
By:
-------------------------------------
Name
Its:
------------------------------------
AGENT:
FIRST UNION NATIONAL BANK,
a national association, as Agent
By:
-------------------------------------
Name
Its:
------------------------------------
