<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
March 26, 1998
CAREY DIVERSIFIED LLC
(Exact name of registrant as specified in its charter)
DELAWARE 001-13779 13-3912578
(State of Organization) (Commission File No.) (IRS Employer
Identification
Number)
50 Rockefeller Plaza, 2nd Floor
New York, NY 10020
(Address of principal executive offices)
(212) 492-1100
(Registrant's telephone number, including area code)
<PAGE> 2
ITEM 5. OTHER EVENTS
On March 26, 1998, Carey Diversified LLC (the "Company") entered
into a three year revolving credit facility which will provide the Company with
a line of credit of $150,000,000. The LIBOR-based facility has been syndicated
to a group of banks led by The Chase Manhattan Bank. The Company initially
expects to use the funds available under the credit facility to fund
acquisitions and build-to-suit projects and to pay off higher interest and/or
maturing debt.
Advances from the line of credit must be for at least $3,000,000
and in multiples of $500,000 for any single advance. Advances made will, at the
Company's option, bear interest at an annual rate of either (i) the one, two,
three or six-month LIBO Rate, as defined, plus a spread which ranges from 0.6%
to 1.45% depending on the Company's leverage or corporate credit rating, or (ii)
the greater of the bank's Prime Rate and the Federal Funds Effective Rate, plus
0.50%, plus a spread ranging from 0% to 0.125% depending on the Company's
leverage or corporate credit rating. In addition, the Company will pay a fee (a)
ranging between 0.15% and 0.20% per annum of the unused commitment amount,
depending on the Company's leverage, if the Company has not obtained a specified
minimum corporate credit rating, or (b) equal to 0.15% of the total commitment
amount, if the Company has obtained a specified minimum corporate credit rating.
The revolving credit agreement has financial covenants that
require the Company to (i) maintain minimum equity value of $400,000,000 plus
85% of amounts received by the Company as proceeds from the issuance of equity
interests and (ii) meet or exceed certain operating and coverage ratios. Such
operating and coverage ratios include, but are not limited to, (a) ratios of
earnings before interest, taxes, depreciation and amortization to fixed charges
for interest and (b) ratios of net operating income to interest expense.
The amounts due under the revolving credit agreement are secured
by a pledge by the Company of its interests in the nine limited partnerships in
the Corporate Property Associates series of limited partnerships (the
"Partnerships") controlled by the Company. Such pledge will be released as to
the interests in a particular Partnership if such Partnership becomes a
co-borrower under the revolving credit agreement.
<PAGE> 3
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(C) EXHIBITS
The following exhibits are filed as part of this Current Report on Form 8-K:
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Exhibit Page No.
- ----------- ------- --------
<S> <C> <C>
10.1 Credit Agreement by and among Carey Diversified LLC,
Chase Manhattan Bank, and the Bank of New York,
dated March 26, 1998.
99.1 Press Release From Carey Diversified LLC
(March 26, 1998)
</TABLE>
<PAGE> 4
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly authorized.
CAREY DIVERSIFIED LLC
By: /s/ Francis Carey
------------------
Francis Carey
Date: May 15, 1998
<PAGE> 1
EXHIBIT 10.1
================================================================================
CREDIT AGREEMENT
dated as of
March 26, 1998
among
CAREY DIVERSIFIED LLC
The Lenders Party Hereto
THE CHASE MANHATTAN BANK,
as Issuing Bank
and
THE CHASE MANHATTAN BANK,
as Administrative Agent,
THE BANK OF NEW YORK,
as Documentation Agent
---------------------------
CHASE SECURITIES INC.,
as Arranger
================================================================================
<PAGE> 2
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
SECTION 1.01. Defined Terms................................................. 1
SECTION 1.02. Classification of Loans and Borrowings........................ 25
SECTION 1.03. Terms Generally............................................... 25
SECTION 1.04. Accounting Terms; GAAP........................................ 25
ARTICLE II
The Credits
SECTION 2.01. Commitments................................................... 26
SECTION 2.02. Loans and Borrowings.......................................... 26
SECTION 2.03. Requests for Revolving Borrowings............................. 26
SECTION 2.04. Competitive Bid Procedure..................................... 27
SECTION 2.05. Additional Borrower(s); Release of Pledge..................... 29
SECTION 2.06. Letters of Credit............................................. 30
SECTION 2.07. Funding of Borrowings......................................... 33
SECTION 2.08. Interest Elections............................................ 34
SECTION 2.09. Termination and Reduction of Commitments...................... 35
SECTION 2.10. Repayment of Loans; Evidence of Debt.......................... 35
SECTION 2.11. Prepayment of Loans........................................... 36
SECTION 2.12. Fees ......................................................... 37
SECTION 2.13. Interest ..................................................... 38
SECTION 2.14. Alternate Rate of Interest.................................... 39
SECTION 2.15. Increased Costs............................................... 39
SECTION 2.16. Break Funding Payments........................................ 40
SECTION 2.17. Taxes ........................................................ 41
-i-
<PAGE> 3
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of Set-offs... 42
SECTION 2.19. Mitigation Obligations; Replacement of Lenders................ 43
ARTICLE III
Representations and Warranties
SECTION 3.01. Organization; Powers.......................................... 44
SECTION 3.02. Authorization; Enforceability................................. 44
SECTION 3.03. Governmental Approvals; No Conflicts.......................... 45
SECTION 3.04. Financial Condition; No Material Adverse Change............... 45
SECTION 3.05. Properties ................................................... 46
SECTION 3.06. Litigation and Environmental Matters.......................... 46
SECTION 3.07. Compliance with Laws and Agreements........................... 46
SECTION 3.08. Investment and Holding Company Status......................... 47
SECTION 3.09. Taxes ........................................................ 47
SECTION 3.10. ERISA ........................................................ 47
SECTION 3.11. Disclosure ................................................... 47
SECTION 3.12. Insurance .................................................... 47
SECTION 3.13. Leases ....................................................... 48
SECTION 3.14. SEC Reports................................................... 48
SECTION 3.15. Lien under Pledge Agreement................................... 48
SECTION 3.16. Representations and Warranties in Loan Documents.............. 49
SECTION 3.17. Organizational Documents...................................... 49
ARTICLE IV
Conditions
SECTION 4.01. Effective Date................................................ 49
SECTION 4.02. Each Credit Event............................................. 50
-ii-
<PAGE> 4
ARTICLE V
Affirmative Covenants
SECTION 5.01. Financial Statements and Other Information.................... 51
SECTION 5.02. Notices of Material Events.................................... 54
SECTION 5.03. Existence; Conduct of Business................................ 54
SECTION 5.04. Payment of Obligations........................................ 55
SECTION 5.05. Maintenance of Properties; Insurance.......................... 55
SECTION 5.06. Books and Records; Inspection Rights.......................... 55
SECTION 5.07. Compliance with Laws.......................................... 55
SECTION 5.08. Use of Proceeds and Letters of Credit......................... 55
SECTION 5.09. Company Status................................................ 56
SECTION 5.10. Subordination................................................. 56
SECTION 5.11 Further Assurances............................................ 56
ARTICLE VI
Negative Covenants
SECTION 6.01. Indebtedness and Other Financial Covenants.................... 57
SECTION 6.02. Liens ........................................................ 59
SECTION 6.03. Fundamental Changes........................................... 59
SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions..... 59
SECTION 6.05. Hedging Agreements............................................ 60
SECTION 6.06. Control of Manager............................................ 60
SECTION 6.07. Margin Regulations; Securities Laws........................... 60
SECTION 6.08. Transactions with Affiliates.................................. 61
SECTION 6.09. Management Agreement.......................................... 61
-iii-
<PAGE> 5
ARTICLE VII
Events of Default
SECTION 7.01. ........................................................... 61
ARTICLE VIII
The Administrative Agent
SECTION 8.01. ........................................................... 64
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices ...................................................... 66
SECTION 9.02. Waivers; Amendments........................................... 66
SECTION 9.03. Expenses; Indemnity; Damage Waiver............................ 67
SECTION 9.04. Successors and Assigns........................................ 68
SECTION 9.05. Survival ..................................................... 70
SECTION 9.06. Counterparts; Integration; Effectiveness...................... 70
SECTION 9.07. Severability.................................................. 71
SECTION 9.08. Right of Setoff............................................... 71
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process.... 71
SECTION 9.10. WAIVER OF JURY TRIAL.......................................... 72
SECTION 9.11. Headings ..................................................... 72
SECTION 9.12. Confidentiality............................................... 72
SECTION 9.13. Interest Rate Limitation...................................... 73
ARTICLE X
Multiple Borrowers........................... 71
ARTICLE XI
REIT Conversion............................ 71
-iv-
<PAGE> 6
SCHEDULES:
Schedule 2.01 - Commitments
Schedule 3.02 - Ownership Structure
Schedule 3.02A - Limited Partnership Interests
Schedule 3.03 - Consents
Schedule 3.04 - Existing Indebtedness
Schedule 3.06 - Disclosed Matters
Schedule 3.12 - Insurance
Schedule 3.13 - Company Leases
Schedule 4.01(f) - Transactions not in the Ordinary Course
EXHIBITS:
Exhibit A -- Form of Assignment and Acceptance
Exhibit B -- Form of Borrowing Base Certificate
Exhibit C -- Form of Borrowing Request
Exhibit D -- Form of Note to Credit Agreement dated as of March 26, 1998
Exhibit E -- Pledge Agreement
Exhibit F -- Form of Recognition Agreement
Exhibit G -- Form of New Borrower Agreement
Exhibit H-1 -- Form of Opinion of Reed Smith Shaw & McClay LLP
Exhibit H-2 -- Form of Opinion of Arter & Hadden
Exhibit I -- Financial Calculation Schedule Pursuant to 5.01
Exhibit J -- Form of Subordination Agreement
Exhibit K -- Form of Intercompany Note
Exhibit L -- Form of [Quarterly/Annual] Compliance Certificate to Accompany
Reports
-v-
<PAGE> 7
CREDIT AGREEMENT dated as of March 26, 1998, among CAREY DIVERSIFIED LLC, the
LENDERS party hereto, and THE CHASE MANHATTAN BANK, as Administrative Agent, The
Bank of New York, as Documentation Agent, and Chase Securities, Inc. as
Arranger.
The parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:
"ABR," when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"Adjusted EBITDA" means, for any Person, for any period, (i)
EBITDA for such Person, for such period, as adjusted to eliminate the
straight-lining of rents, less (ii) the Capital Expenditure Reserve Amount for
such Person's Projects for each month in such period.
"Adjusted NOI" means, for any period, the sum, without
duplication, of (i) NOI for such period from Projects owned by the Company
and/or its Subsidiaries, less the Capital Expenditure Reserve Amounts for such
Projects for each month in such period (with appropriate adjustments for
minority interests) and (ii) the portion of NOI for such period of Joint Venture
Holdings allocable to the Company and/or its Subsidiaries in accordance with
GAAP, less the Capital Expenditure Reserve Amounts for such Joint Venture
Holdings for each month in such period.
"Adjusted Unencumbered NOI" means, for any period, Adjusted NOI
derived from Unencumbered Eligible Projects for such period, which Adjusted NOI
is not subject to any Lien.
"Adjusted LIBO Rate" means, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means The Chase Manhattan Bank, in its
capacity as administrative agent for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative
Questionnaire in a form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.
<PAGE> 8
2
"Alternate Base Rate" means, for any day, a rate per annum equal
to the greater of the Prime Rate in effect on such day and the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. Any change in the Alternate
Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate
shall be effective from and including the effective date of such change in the
Prime Rate or the Federal Funds Effective Rate, respectively.
"Applicable Percentage" means, with respect to any Lender, the
percentage of the total Commitments represented by such Lender's Commitment. If
the Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments most recently in effect, giving effect to
any assignments.
"Applicable Rate" means, for any day, with respect to any ABR Loan
or Eurodollar Revolving Loan, as the case may be:
(i) in the event that Moody's or S&P shall have in effect either
a corporate credit rating for the Company or a rating for the Index Debt, the
applicable rate per annum set forth below under the caption "ABR Spread" or
"Eurodollar Spread", as the case may be, based upon the ratings by Moody's and
S&P, respectively, applicable on such date to the Company or the Index Debt:
<TABLE>
<CAPTION>
================================================================================
Index Debt Ratings ABR Eurodollar
(S&P/Moody's): Spread (bps) Spread (bps)
- --------------------------------------------------------------------------------
<S> <C> <C>
Category 1
A-/A3 or better 0.0 60.0
- --------------------------------------------------------------------------------
Category 2
BBB+/Baa1 0.0 75.0
- --------------------------------------------------------------------------------
Category 3
BBB/Baa2 0.0 87.5
- --------------------------------------------------------------------------------
Category 4
BBB-/Baa3 or lower rating 0.0 100.0
================================================================================
</TABLE>
For purposes of the foregoing, (A) if the ratings established or deemed to have
been established by Moody's and S&P for the Company or the Index Debt shall fall
within different Categories, the Applicable Rate shall be based on the higher of
the two ratings unless one of the two ratings is two or more Categories lower
than the other, in which case the Applicable Rate shall be determined by
reference to the Category next below that of the higher of the two ratings, and
(B) if the ratings established or deemed to have been established by Moody's and
S&P for the Company or the Index Debt shall be changed (other than as a result
of a change in the rating system of Moody's or S&P), such change shall be
effective as of the date on which it is first announced by the applicable rating
agency. Each change in the Applicable Rate in accordance with this clause (i)
shall apply during the period commencing on the effective date of such change
and ending on the date immediately preceding the effective date of the next such
change. If the rating system of Moody's or S&P shall change, or if either such
rating agency shall cease to be in the business of rating companies or corporate
debt obligations, the Company and the Lenders shall negotiate in good faith to
amend this definition to reflect such changed rating system or the
unavailability of ratings from such rating agency and, pending the effectiveness
of
<PAGE> 9
3
any such amendment, the Applicable Rate shall be determined by reference to the
rating most recently in effect prior to such change or cessation; or
(ii) in the event that Moody's or S&P shall not have in effect a
rating for the Company or the Index Debt, (a) the applicable rate per annum set
forth below under the caption "ABR Spread" or "Eurodollar Spread", as the case
may be, based upon the range into which the Leverage Ratio then falls in
accordance with the following table:
<TABLE>
<CAPTION>
Leverage Ratio Eurodollar Spread (bps) ABR Spread (bps)
-------------- ----------------------- ----------------
<S> <C> <C>
less than 30% 115 0.0
30%-less than 45% 130 0.0
45%-55% (or higher) 145 0.125
</TABLE>
Any change in the Applicable Rate determined in accordance with this clause (ii)
shall be effective as of the financial reporting dates set forth in Section 5.01
or as of the date of any borrowing on which the Leverage Ratio changes.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 9.04), and accepted by the Administrative Agent,
in the form of EXHIBIT A or any other form approved by the Administrative Agent.
"Availability Period" means the period from and including the
Effective Date to but excluding the earlier of the Maturity Date and the date of
termination of the Commitments.
"Board" means the Board of Governors of the Federal Reserve System
of the United States of America.
"Borrower" means the Company and any Wholly-Owned Subsidiary
thereof which becomes a Borrower pursuant to Section 2.05.
"Borrowing" means (i) Revolving Loans of the same Type, made,
converted or continued on the same date and, in the case of Eurodollar Loans, as
to which a single Interest Period is in effect or (ii) a Competitive Loan or
group of Competitive Loans made on the same date and as to which a single
Interest Period is in effect.
"Borrowing Base" means, as of any date, the lesser of (i)
$150,000,000 and (ii) an amount equal to (A) the Lease Value less (B) 1.33
multiplied by the amount of Total Unsecured Outstanding Indebtedness (excluding
for such purpose only Indebtedness outstanding in respect of Loans) of the
Consolidated Businesses.
"Borrowing Base Certificate" means a certificate of the President,
a Vice President or a Financial Officer of the Company or the President, a Vice
President or a Financial Officer of the Manager, on behalf of the Company,
substantially in the form of EXHIBIT B.
"Borrowing Request" means a request by the Company for a Revolving
Borrowing in accordance with Section 2.03, substantially in the form of EXHIBIT
C.
<PAGE> 10
4
"Business Day" means any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to remain closed; provided that, when used in connection with a
Eurodollar Loan, the term "Business Day" shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.
"Capital Expenditure Reserve Amounts" means, for any month for any
property owned, directly or indirectly, by any of the Consolidated Businesses or
any Joint Venture in which the Consolidated Businesses or any Joint Venture has
a Joint Venture Holding during such month, an amount equal to one twelfth of the
gross revenues attributable to such property for the twelve month period ended
on the last day of the preceding month, multiplied by 2.5%.
"Capital Lease Obligations" of any Person means the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Capital Lease" means any lease by a Person of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, the obligations under which are required to be classified
and accounted for as capital leases on a balance sheet of such Person under
GAAP.
"Cash and Cash Equivalents" means unrestricted (i) cash, (ii)
marketable direct obligations issued or unconditionally guaranteed by the United
States government and backed by the full faith and credit of the United States
government; and (iii) domestic and Eurodollar certificates of deposit and time
deposits, bankers' acceptances and floating rate certificates of deposit issued
by any commercial bank organized under the laws of the United States, any state
thereof, the District of Columbia, any foreign bank, or its branches or agencies
(fully protected against currency fluctuations), which, at the time of
acquisition, are rated A-1 (or better) by S&P or P-1 (or better) by Moody's
provided that the maturities of such Cash and Cash Equivalents shall not exceed
one year.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C.Sections 9601 et seq.,
any amendments thereto, any successor statutes and any regulations or guidance
promulgated thereunder.
"Change in Control" means (i) the acquisition of ownership,
directly or indirectly, beneficially or of record, by any Person or group
(within the meaning of the Securities Exchange Act of 1934, as amended, and the
rules of the Securities and Exchange Commission thereunder as in effect on the
date hereof) (other than the Company, any of its Subsidiaries, any trustee,
fiduciary or other person or entity holding securities under any employee
benefit plan of the Company or any of its Subsidiaries and other than any wholly
owned direct or indirect subsidiary of W.P. Carey & Co., Inc.), of shares
representing more than 20% of the aggregate ordinary voting power represented by
the issued and outstanding capital stock of the Company; or (ii) occupation of a
majority of the seats (other than vacant seats) on the board of directors of the
Company by Persons who were neither (A) nominated by the board of directors of
the Company nor (B) appointed by directors so nominated; or (iii) the
acquisition of direct or indirect Control of the Company by any Person or group
(other than any wholly owned direct or indirect subsidiary of W.P. Carey & Co.,
Inc.); or (iv) the delegation of the right to manage and control the affairs of
the Manager, whether voluntarily, involuntarily, by operation of law or
otherwise to any Person other than W.P. Carey & Co., Inc., the Company or their
wholly owned direct or indirect subsidiaries; or (v) the acquisition of direct
or indirect Control of the Manager by any Person or group (other than any wholly
owned direct or indirect subsidiary of the Company or W.P. Carey & Co., Inc.),
<PAGE> 11
5
whether voluntarily, involuntarily, by operation of law or otherwise, except
that this clause shall not apply from and after the date, if any, the Manager is
merged into the Company or a Subsidiary, or (vi) the failure of the Manager to
constitute the sole Person to whom the right to manage and control the affairs
of the Company has been delegated by the board of directors of the Company,
whether voluntarily, involuntarily, by operation of law or otherwise except that
this clause shall not apply from and after the date, if any, the Manager is
merged into the Company or a Subsidiary; (vii) the acquisition (other than any
such acquisition occurring pursuant to the laws of inheritance, descent,
distribution and succession) of ownership, directly or indirectly, beneficially
or of record, by any Person (other than the Company) or group (within the
meaning of the Securities Exchange Act of 1934, as amended, and the rules of the
Securities and Exchange Commission thereunder as in effect on the date hereof)
of shares representing more than 50% of the aggregate ordinary voting power
represented by the issued and outstanding capital stock of W.P. Carey & Co.,
Inc., except that this clause (vii) shall not apply from and after, the date, if
any, the Manager or W.P. Carey & Co., Inc. is merged into the Company or a
Subsidiary; or (viii) occupation of a majority of the seats (other than vacant
seats) on the board of directors of W.P. Carey & Co., Inc. by Persons who were
neither (A) nominated by the board of directors of W.P. Carey & Co., Inc. nor
(B) appointed by directors so nominated, except that this clause shall not apply
from and after the date, if any, the Manager is merged into the Company or a
Subsidiary and this clause shall not apply if W.P. Carey & Co., Inc. is merged
into the Company or becomes a Subsidiary.
"Change in Law" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender or
the Issuing Bank (or, for purposes of Section 2.15(b), by any lending office of
such Lender or by such Lender's or the Issuing Bank's holding company, if any)
with any request, guideline or directive (whether or not having the force of
law) of any Governmental Authority made or issued after the date of this
Agreement.
"Class", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are Revolving
Loans or Competitive Loans.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" means any property in respect of which, pursuant to
any Loan Document, there has been granted or assigned (or purported to have been
granted or assigned) to the Administrative Agent for the benefit of the Secured
Parties, a security interest, other Lien or assignment of rights.
"Combined Equity Value" means Total Value less Total Outstanding
Indebtedness.
"Commitment" means, with respect to each Lender, the commitment of
such Lender to make Revolving Loans and to acquire participations in Letters of
Credit hereunder, expressed as an amount representing the maximum aggregate
amount of such Lender's Revolving Credit Exposure hereunder, as such commitment
may be (a) reduced from time to time pursuant to Section 2.09 and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 9.04. The initial amount of each Lender's Commitment is set
forth on Schedule 2.01, or in the Assignment and Acceptance pursuant to which
such Lender shall have assumed its Commitment, as applicable. The initial
aggregate amount of the Lenders' Commitments is $150,000,000.
"Company" means Carey Diversified LLC, a Delaware limited
liability company.
"Company Interests" means a limited liability company interest in
the Company.
<PAGE> 12
6
"Competitive Bid" means an offer by a Lender to make a Competitive
Loan in accordance with Section 2.04.
"Competitive Bid Rate" means, with respect to any Competitive Bid,
the Margin offered by the Lender making such Competitive Bid.
"Competitive Bid Request" means a request by the Company for
Competitive Bids in accordance with Section 2.04.
"Competitive Loan" means a Loan made pursuant to Section 2.04.
"Consolidated Businesses" means the Company and its Subsidiaries,
on a consolidated basis (without taking into account any non-wholly owned Person
or entity).
"Consolidation" means the consolidation of the Predecessor
Partnerships with and into the Subsidiary Partnerships as described in the
Consent Solicitation/Prospectus of the Company, dated October 16, 1997.
"Contingent Obligation" as to any Person means, without
duplication, (i) any contingent obligation of such Person required to be shown
on such Person's balance sheet in accordance with GAAP, and (ii) any obligation
required to be disclosed in the footnotes to such Person's financial statements
in accordance with GAAP, guaranteeing partially or in whole any non-recourse
Indebtedness, lease, dividend or other obligation, exclusive of contractual
indemnities (including, without limitation, any indemnity or price-adjustment
provision relating to the purchase or sale of securities or other assets) and
guarantees of non-monetary obligations (other than guarantees of completion)
which have not yet been called on or quantified, of such Person or of any other
Person. The amount of any Contingent Obligation described in clause (ii) shall
be deemed to be (a) with respect to a guaranty of interest or interest and
principal, or operating income guaranty, the sum of all payments required to be
made thereunder (which in the case of an operating income guaranty shall be
deemed to be equal to the debt service for the note secured thereby), calculated
at the interest rate applicable to such Indebtedness, through (i) in the case of
an interest or interest and principal guaranty, the stated date of maturity of
the obligation (and commencing on the date interest could first be payable
thereunder), or (ii) in the case of an operating income guaranty, the date
through which such guaranty will remain in effect, and (b) with respect to all
guarantees not covered by the preceding clause (a) an amount equal to the stated
or determinable amount of the primary obligation in respect of which such
guaranty is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to
perform thereunder) as recorded on the balance sheet and on the footnotes to the
most recent financial statements of the applicable Borrower required to be
delivered pursuant hereto. Notwithstanding anything contained herein to the
contrary, guarantees of completion shall not be deemed to be Contingent
Obligations unless and until a claim for payment has been made thereunder, at
which time any such guaranty of completion shall be deemed to be a Contingent
Obligation in an amount equal to any such claim. Subject to the preceding
sentence, (i) in the case of a joint and several guaranty given by such Person
and another Person (but only to the extent such guaranty is recourse, directly
or indirectly to the applicable Person), the amount of the guaranty shall be
deemed to be 100% thereof unless and only to the extent that (X) such other
Person has delivered Cash or Cash Equivalents to secure all or any part of such
Person's guaranteed obligations or (Y) such other Person holds an Investment
Grade Credit Rating from either Moody's or S&P, and (ii) in the case of a
guaranty (whether or not joint and several) of an obligation otherwise
constituting Indebtedness of such Person, the amount of such guaranty shall be
deemed to be only that amount in excess of the amount of the obligation
constituting Indebtedness of such Person. Notwithstanding anything contained
herein to the contrary, "Contingent Obligations" shall
<PAGE> 13
7
not be deemed to include guarantees of loan commitments or of construction loans
to the extent the same have not been drawn.
"Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise. "Controlling" and "Controlled" have meanings correlative thereto.
"Credit Event" has the meaning set forth in Section 4.02.
"Default" means any event or condition which constitutes an Event
of Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Disclosed Matters" means the actions, suits and proceedings and
the environmental matters disclosed in Schedule 3.06.
"dollars" or "$" refers to lawful money of the United States of
America.
"EBITDA" means, for any Person for any period, the Net Income
(Loss) of such Person for such period taken as a single accounting period, plus
(a) the sum of the following amounts of such Person and its subsidiaries for
such period determined on a consolidated basis in conformity with GAAP to the
extent included in the determination of such Net Income (Loss): (i) depreciation
expense, (ii) amortization expense and other non-cash charges, (iii) interest
expense, (iv) income tax expense, (v) extraordinary losses (and other losses on
asset sales not otherwise included in extraordinary losses determined on a
consolidated basis in conformity with GAAP), and (vi) minority interests in
Unconsolidated Entities, less (b) the sum of the following amounts of such
Person and its subsidiaries determined on a consolidated basis in conformity
with GAAP to the extent included in the determination of such Net Income (Loss):
(i) extraordinary gains (and in the case of the Borrower, other gains on asset
sales not otherwise included in extraordinary gains determined on a consolidated
basis in conformity with GAAP) and (ii) the applicable share of Net Income
(Loss) of such Person's Unconsolidated Entities; plus (c) the portion allocable
to such Person of EBITDA of such Person's Unconsolidated Entities.
"Effective Date" means the date on which the conditions specified
in Section 4.01 are satisfied (or waived in accordance with Section 9.02).
"Eligible Lease" means any Lease that (A) is a Triple Net Lease or
(B) is a Lease (other than a Lease specified in clause (A) above) (i) under
which no payment default has occurred and is continuing; (ii) under which no
material default (other than a payment default) has occurred and is continuing;
and (iii) under which the tenant is not subject to any bankruptcy, insolvency,
reorganization or other similar proceedings.
"Eligible Joint Venture Holdings" means Joint Venture Holdings in
Joint Ventures in which (i) the Company and/or the Subsidiaries have an
ownership interest of fifty percent (50%) or greater, (ii) the Company and/or
the Subsidiaries control the management of such Joint Venture, whether as the
general partner or manager of such Joint Venture, or otherwise, (iii) or the
Company and/or the Subsidiaries, as general partner, manager or otherwise, have
the ability, in its or their sole discretion, to grant Liens on the assets of
such Joint Venture, and (iv) there are no restrictions on the ability of such
Joint Venture to declare distributions or dividends, as the case may be. As used
in this definition only, the term "control" shall mean the authority to make
major management decisions in its sole discretion and the management of
day-to-day operations of such entity.
<PAGE> 14
8
"Eligible Project" means a Project (i) with respect to which
either (A) the Company and/or one or more of the Subsidiaries collectively have
an ownership interest of one hundred percent (100%), free of all title defects
and material structural defects, or (B)(1) the Company and/or one or more of the
Subsidiaries collectively have an ownership interest (whether directly or
through an interest in a Joint Venture), free of all title defects and material
structural defects, of more than fifty percent (50%) and (2) the Company and/or
one or more of the Subsidiaries collectively control the management of such
Project; and (ii) which is free of Hazardous Materials except as would not
materially affect the value of such Project, as verified by an Officer's
Certificate of the Company in form and substance satisfactory to the
Administrative Agent. As used in this definition only, the term "control" shall
mean the authority, with sole discretion, to make major management decisions
with respect to the Project, including with respect to sale, refinancing,
capital improvements, leasing and the grant of Liens on such Project and to
manage the day-to-day operations of such Project.
"Encumbered Eligible Project" means an Eligible Project all or a
portion of which is encumbered by a Lien.
"Encumbered Lease Value" means, as of any date, the sum of the net
present value of the projected contractual income, net of the projected expenses
to be incurred by the landlord, from all Eligible Leases of Encumbered Eligible
Projects (with appropriate adjustments with respect to minority interests in
Joint Ventures and the Subsidiaries through which such Projects are held to
reflect the actual percentage interest of income entitled to be received where
the collective ownership interests are less than 100%), discounted at an annual
rate of 10.5%. In determining Encumbered Lease Value, income from lease
extensions under any Lease will be included only if the extension right with
respect to such Lease has been unconditionally and irrevocably exercised by the
tenant (or the tenant has lost its rights to terminate the lease prior to the
automatic extension thereof). Encumbered Lease Value shall not include any
amount in respect of an Encumbered Eligible Project unless the Indebtedness in
respect of such Encumbered Eligible Project is less than or equal to 35% of the
Encumbered Lease Value for such Encumbered Eligible Project. In determining the
amount of projected contractual income, net of projected expenses to be incurred
by a landlord from any Eligible Lease, all amounts attributable to adjustments
in rental obligations of a tenant that are contingent (for example, rental
increases based upon a specified occupancy rate) or otherwise indeterminate (for
example, rental increases based upon index adjustments), shall be excluded.
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material.
"Environmental Liability" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Company or any Subsidiary
directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any Hazardous Materials into
the environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
<PAGE> 15
9
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Company, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the Company or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Company or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f)
the incurrence by the Company or any of its ERISA Affiliates of any liability
with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Company or any ERISA Affiliate of
any notice, or the receipt by any Multiemployer Plan from the Company or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.
"Eurodollar", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate (or, in the
case of a Competitive Loan, the LIBO Rate).
"Event of Default" has the meaning set forth in Article VII.
"Excluded Taxes" means, with respect to the Administrative Agent,
any Lender, the Issuing Bank or any other recipient of any payment to be made by
or on account of any obligation of any Borrower hereunder, (a) income or
franchise taxes imposed on (or measured by) its net income by the United States
of America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which such Borrower is located and (c) in the case
of a Foreign Lender (other than an assignee pursuant to a request by such
Borrower under Section 2.19(b)), any withholding tax that is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party
to this Agreement (or designates a new lending office) or is attributable to
such Foreign Lender's failure to comply with Section 2.17(e), except to the
extent that such Foreign Lender (or its assignor, if any) was entitled, at the
time of designation of a new lending office (or assignment), to receive
additional amounts from such Borrower with respect to such withholding tax
pursuant to Section 2.17(a).
"Facility Fee Rate " means the applicable rate per annum set forth
below under the caption "Facility Fee Rate" based upon the ratings by Moody's
and S&P, respectively, applicable on such date to the Company or the "Index
Debt":
<PAGE> 16
10
<TABLE>
<CAPTION>
==================================================
Index Debt Ratings Facility Fee
(S&P/Moody's): Rate (bps)
--------------------------------------------------
<S> <C>
Category 1
A-/A3 or better 15.0
--------------------------------------------------
Category 2
BBB+/Baa1 15.0
--------------------------------------------------
Category 3
BBB/Baa2 15.0
--------------------------------------------------
Category 4
BBB-/Baa3 or lower rating 15.0
==================================================
</TABLE>
For purposes of the foregoing, (A) if the ratings established or deemed to have
been established by Moody's and S&P for the Company or the Index Debt shall fall
within different Categories, the Facility Fee Rate shall be based on the higher
of the two ratings unless one of the two ratings is two or more Categories lower
than the other, in which case the Facility Fee Rate shall be determined by
reference to the Category next below that of the higher of the two ratings, and
(B) if the ratings established or deemed to have been established by Moody's and
S&P for the Company or the Index Debt shall be changed (other than as a result
of a change in the rating system of Moody's or S&P), such change shall be
effective as of the date on which it is first announced by the applicable rating
agency. Each change in the Facility Fee Rate shall apply during the period
commencing on the effective date of such change and ending on the date
immediately preceding the effective date of the next such change. If the rating
system of Moody's or S&P shall change, or if either such rating agency shall
cease to be in the business of rating companies or corporate debt obligations,
the Company and the Lenders shall negotiate in good faith to amend this
definition to reflect such changed rating system or the unavailability of
ratings from such rating agency and, pending the effectiveness of any such
amendment, the Facility Fee Rate shall be determined by reference to the rating
most recently in effect prior to such change or cessation.
"Fair Market Value" means, with respect to any asset or property,
the sale value that would be obtained in an arm's-length transaction between an
informed and willing seller under no compulsion to sell and an informed and
willing buyer under no compulsion to buy. Fair Market Value shall be determined
by an officer of the Company or the Manager acting in good faith and shall be
evidenced by an Officer's Certificate, except in the case of the determination
of Fair Market Value of Permitted REIT Investments which are "restricted
securities" as defined in the definition of REIT Investment Value having a Fair
Market Value in excess of $5,000,000, in which case the determination of such
Fair Market Value shall be, at the election of the Company, by (i) the board of
directors of the Company acting in good faith and shall be evidenced by a
resolution of the board of directors, or (ii) an appraisal of an independent
third-party appraiser which shall be a Person regularly engaged in the valuation
of securities of the same type as such Permitted REIT Investment. The Fair
Market Value of any readily marketable securities shall be the number of such
securities multiplied by the average Market Price per share or per unit of such
securities during the five consecutive trading days immediately preceding the
date of determination. The "Market Price" of any security on any trading day
shall mean, with respect to any security which is listed on a national
securities exchange, the last sale price regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices regular
way, in either case on the New York Stock Exchange, or, if such security is not
listed or admitted to trading on such exchange, on the principal national
securities exchange on which such security is listed or admitted to trading, or,
if such security is not listed or admitted to trading on any national
<PAGE> 17
11
securities exchange but is designated as a national market system security by
the National Association of Securities Dealers, the last sale price, or, in case
no such sale takes place on such day, the average of the closing bid and asked
prices, in either case as reported on the National Association of Securities
Dealers Automated Quotation/National Market System, or if such security is not
so designated as a national market systems security, the average of the highest
reported bid and lowest reported asked prices as furnished by the National
Association of Securities Dealers or similar organization if the National
Association of Securities Dealers is no longer reporting such information. With
respect to operating partnership units of any REIT, such operating partnership
units shall in no event have a value greater than the value of the number of
shares of the REIT into which such operating partnership units are then
convertible.
"Federal Funds Effective Rate" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or controller of the Company, or of the Manager,
as the context requires.
"Financial Statements" means financial statements presenting the
consolidated and consolidating financial position of the Company and its
Subsidiaries as at the date indicated and the results of their operations and
cash flow for the period indicated in accordance with GAAP, subject to normal
adjustments.
"Fixed Charges" means, with respect to any period, the sum of (a)
Total Interest Expense for such period and (b) the aggregate of all scheduled
principal payments on Total Outstanding Indebtedness according to GAAP made or
required to be made during such period by the Company and/or its Subsidiaries
(with appropriate adjustments for minority interests) or allocable to the
Company and/or its Subsidiaries on account of Joint Venture Holdings (but
excluding balloon payments of principal due upon the stated maturity of any
Indebtedness), and (c) the aggregate of all dividends payable on the Company's
or any of its consolidated Subsidiaries' preferred equity interests (if any).
"Foreign Lender" means any Lender that is organized under the laws
of a jurisdiction other than that in which the Borrower is located. For purposes
of this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"GAAP" means generally accepted accounting principles in the
United States of America.
"Governmental Authority" means the government of the United States
of America, any other nation or any political subdivision thereof, whether state
or local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness
<PAGE> 18
12
or other obligation of any other Person (the "primary obligor") in any manner,
whether directly or indirectly, and including any obligation of the guarantor,
direct or indirect, (a) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation or to purchase (or
to advance or supply funds for the purchase of) any security for the payment
thereof, (b) to purchase or lease property, securities or services for the
purpose of assuring the owner of such Indebtedness or other obligation of the
payment thereof, (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or other obligation or (d)
as an account party or applicant in respect of any letter of credit or letter of
guaranty issued to support such Indebtedness or obligation; provided, that the
term Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business.
"Hazardous Materials" means all explosive or radioactive
substances or wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or asbestos
containing materials, polychlorinated biphenyls, radon gas, infectious or
medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.
"Hedging Agreement" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.
"Improvements" means all buildings, fixtures, structures, parking
areas, landscaping and other improvements whether existing now or hereafter
constructed, together with all machinery and mechanical, electrical, HVAC and
plumbing systems presently located thereon and used in the operation thereof,
excluding (a) any such items owned by utility service providers, (b) any such
items owned by tenants or other third parties unaffiliated with the Company and
(c) any items of personal property.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid (excluding current Taxes, water
and sewer charges and assessments and current trade liabilities incurred in the
ordinary course of business in accordance with customary terms), (d) all
obligations of Person under conditional sale or other title retention agreements
relating to property acquired by such Person (other than current trade
liabilities incurred in the ordinary course of business in accordance with
customary terms), (e) all obligations of such Person in respect of the deferred
purchase price of property or services (excluding current accounts payable
incurred in the ordinary course of business), (f) all Indebtedness of others
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h)
all Capital Lease Obligations of such Person, (i) all obligations, contingent or
otherwise, of such Person as an account party or applicant in respect of letters
of credit and letters of guaranty and (j) all obligations, contingent or
otherwise, of such Person in respect of bankers' acceptances. The Indebtedness
of any Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such Person
is liable therefor as a result of such Person's ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
<PAGE> 19
13
"Index Debt" means senior, unsecured, long-term indebtedness for
borrowed money of the Company that is not guaranteed by any other Person or
subject to any other credit enhancement.
"Interest Election Request" means a request by the Company to
convert or continue a Revolving Borrowing in accordance with Section 2.08.
"Interest Payment Date" means (a) with respect to any ABR Loan,
the last Business Day of each March, June, September and December and (b) with
respect to any Eurodollar Loan, the last day of the Interest Period applicable
to the Borrowing of which such Loan is a part and, in the case of a Eurodollar
Borrowing with an Interest Period of more than three months' duration, each day
prior to the last Business Day of such Interest Period that occurs at intervals
of three months' duration after the first day of such Interest Period.
"Interest Period" means with respect to any Eurodollar Borrowing
the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months thereafter, as the Company may elect; provided, that (i) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day and (ii) any
Interest Period that commences on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period. For purposes hereof, the date
of a Borrowing initially shall be the date on which such Borrowing is made and,
in the case of a Revolving Borrowing, thereafter shall be the effective date of
the most recent conversion or continuation of such Borrowing.
"Issuing Bank" means The Chase Manhattan Bank, in its capacity as
the issuer of Letters of Credit hereunder, and its successors in such capacity
as provided in Section 2.06(i). The Issuing Bank may, in its discretion, arrange
for one or more Letters of Credit to be issued by Affiliates of the Issuing
Bank, in which case the term "Issuing Bank" shall include any such Affiliate
with respect to Letters of Credit issued by such Affiliate.
"Joint Venture" means a partnership, limited liability company,
joint venture (including a tenancy-in-common ownership pursuant to a written
agreement providing for substantially the same rights and obligations relating
to such property that would be in a joint venture agreement), or corporation.
"Joint Venture Holding" means an interest in a Joint Venture held
or owned by the Company (and/or one of its Subsidiaries) which is not wholly
owned by the Company (and/or one of its Subsidiaries).
"LC Disbursement" means a payment made by the Issuing Bank
pursuant to a Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by or
on behalf of the Company at such time. The LC Exposure of any Lender at any time
shall be its Applicable Percentage of the total LC Exposure at such time.
<PAGE> 20
14
"Lease" means a lease, license, concession agreement or other
agreement providing for the use or occupancy of any portion of any Project,
including all amendments, supplements, modifications and assignments thereof and
all side letters or side agreements relating thereto.
"Lease Value" means, as of any date, the sum of (i) 75% of
Unencumbered Lease Value; (ii) the excess, if any, of (A) 75% of Encumbered
Lease Value over (B) the amount of all Indebtedness in respect of Properties for
which the corresponding Eligible Lease was included in the calculation of
Encumbered Lease Value; and (iii) 50% of Residual Proceeds. Solely for purposes
of calculating Lease Value, not more than 15% of Lease Value may consist of the
sum of (x) amounts calculated pursuant to clause (ii) above; (y) the sum of (1)
Encumbered Lease Value attributable to Projects that are not 100% owned by the
Consolidated Businesses and/or the Subsidiary Partnerships (but only to the
extent that the value of such Project is included in clause (ii) above) and (2)
Unencumbered Lease Value attributable to Projects that are not 100% owned by the
Consolidated Businesses and/or the Subsidiary Partnerships (but only to the
extent that the value of such Project is included in clause (i) above) and (z)
the amount derived under clause (iii) above. Solely for purposes of calculating
Lease Value, not more than 10% of Lease Value may consist of Lease Value
attributable to Eligible Leases other than Triple Net Leases.
"Lenders" means the Persons listed on Schedule 2.01 and any other
Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance.
"Letter of Credit" means any letter of credit issued pursuant to
this Agreement.
"Leveraged Assets" means Eligible Projects designated by the
Company in an Officer's Certificate delivered to the Administrative Agent (i)
each of which is subject only to Non-Recourse Indebtedness; (ii) each of which
is subject to an Eligible Lease; and (iii) the tenants of which have a weighted
average Moody's or S&P long-term unsecured indebtedness rating of not less than
Baa1 or BBB+, respectively. Eligible Projects designated by the Company as
Leveraged Assets shall remain Leveraged Assets for the term of this Agreement.
"Leverage Ratio" as of any date means the ratio, expressed as a
percentage, of the Total Outstanding Indebtedness as of such date to the Total
Value as of such date.
"LIBO Rate" means, with respect to any Eurodollar Borrowing for
any Interest Period, the rate appearing on Page 3750 of the Telerate Service (or
on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO Rate" with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate (rounded
upwards, if necessary, to the next 1/16 of 1%) at which dollar deposits of
$5,000,000 and for a maturity comparable to such Interest Period are offered by
the principal London office of the entity which is the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset (excluding, in the case of assets consisting of Real
Property owned by the Company, its Subsidiaries or a Joint Venture, the lien of
<PAGE> 21
15
a mortgage or deed of trust on the Real Property interest not owned by the
Company, its Subsidiaries or the Joint Venture; provided, that the ownership or
estate interest of the Company in such Real Property is not subordinate to such
a lien and the Company's interest would not be adversely affected by such lien
either through foreclosure thereof or otherwise (e.g., a mortgage on the
leasehold interest of a Project owned in fee by a Subsidiary does not constitute
a Lien)), (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.
"Listed Shares" means a limited liability interest in the Company
representing a share of all the income, loss and capital of the Company.
"Loans" means the loans made by the Lenders to the Company
pursuant to this Agreement.
"Loan Documents" means this Agreement, the Notes, the Pledge
Agreement, the Recognition Agreements and all other instruments, agreements and
written obligations between the Borrowers and any of the Lenders pursuant to or
in connection with the transactions contemplated hereby.
"Management Agreement" means, the Management Agreement, dated as
of October 15, 1997, by and between the Company and the Manager.
"Manager" means (i) Carey Management LLC, a Delaware limited
liability company, and (ii) any successor manager(s) of the Company controlled
(directly or indirectly) by W.P. Carey & Co., Inc. for which the Company has
previously provided the Administrative Agent and the Lenders with: (1) notice of
such property management company, and (2) evidence reasonably satisfactory to
the Administrative Agent and the Lenders that such property management company
is controlled (directly or indirectly) by W.P. Carey & Co., Inc..
"Margin" means, with respect to any Competitive Loan, the marginal
rate of interest, if any, to be added to or subtracted from the LIBO Rate to
determine the rate of interest applicable to such Loan, as specified by the
Lender making such Loan in its related Competitive Bid.
"Margin Stock" means "margin stock" as such term is defined in
Regulation U and Regulation G of the Federal Reserve Board as in effect from
time to time.
"Marketable Securities" means short-term marketable securities,
issued by any entity (other than an Affiliate of the Company) organized and
existing under the laws of the United States of America, with a long-term
unsecured indebtedness rating, at the time as of which any investment therein is
made, with Moody's and/or S&P of Baa2/BBB or better, respectively.
"Material Adverse Effect" means a material adverse effect on (a)
the business, assets, operations, prospects or condition, financial or
otherwise, of the Company and the Subsidiaries taken as a whole, (b) the ability
of the Company to perform any of its material obligations under the Loan
Documents or (c) the rights of or benefits available to the Lenders under the
Loan Documents.
"Material Indebtedness" means Indebtedness (other than the Loans,
Letters of Credit and Nonrecourse Indebtedness), or obligations in respect of
one or more Hedging Agreements, of any one or more of the Company and its
Subsidiaries in an aggregate principal amount exceeding $10,000,000. For
<PAGE> 22
16
purposes of determining Material Indebtedness, the "principal amount" of the
obligations of the Company or any Subsidiary in respect of any Hedging Agreement
at any time shall be the maximum aggregate amount (giving effect to any netting
agreements) that the Company or such Subsidiary would be required to pay if such
Hedging Agreement were terminated at such time.
"Maturity Date" means the third anniversary of the Effective Date.
"Moody's" means Moody's Investors Service, Inc.
"Mortgage Asset" means Indebtedness owed to the Company or a
Subsidiary of the Company and secured by a mortgage or deed of trust on a fee
interest or a leasehold interest in Real Property and all collateral security
related thereto.
"Multiemployer Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Net Cash Proceeds" means all cash when and as received by the
seller or owner in connection with the sale or refinancing of any asset, less
reasonable costs and expenses of the seller or owner, repayment of secured
indebtedness with respect to the applicable asset and real estate transfer taxes
payable by the seller or owner in connection with any asset sale.
"Net Income (Loss)" means, for any Person for any period, the
aggregate of net income (or loss) of such Person and its subsidiaries for such
period, determined on a consolidated basis conformity with GAAP.
"Net Offering Proceeds" means all cash or other assets received by
the Company as a result of the sale of common shares, preferred shares,
partnership interests, limited liability company interests, convertible
securities or other ownership or equity interests in the Company, less customary
costs and discounts of issuance paid by the Company.
"New Borrower" has the meaning set forth in Section 2.05.
"NOI" means, with respect to any Project or Joint Venture Holding
for any period, net operating income for such Project or Joint Venture Holding
for such period determined in accordance with GAAP, excluding interest,
depreciation, amortization and income taxes and adjusted, (i) to exclude accrued
rent with respect to tenants that are more than 90 days in arrears in the
payment of rent, and (ii) to exclude free rent and omit the straight line
treatment of rent, so as to account for rent on a cash basis.
"Nonrecourse Indebtedness" of any Person means all Indebtedness of
such Person with respect to which recourse for payment is limited to specific
assets encumbered by a Lien securing such Indebtedness; provided, however, that
personal recourse of a holder of Indebtedness against any obligor with respect
thereto for fraud, misrepresentation, misapplication or misappropriation of
cash, waste, environmental liabilities, and other circumstances customarily
excluded from nonrecourse provisions in nonrecourse financing of real estate
shall not, by itself, prevent any Indebtedness from being characterized as
Nonrecourse Indebtedness; provided, further, that if in connection therewith a
personal recourse claim is established by judgment decree or award by any court
of competent jurisdiction or arbitrator of competent jurisdiction and execution
or enforcement thereof shall not be effectively stayed for 30 consecutive days
and such Indebtedness shall not be paid or otherwise satisfied within such
30-
<PAGE> 23
17
day period, then such Indebtedness in an amount equal to the personal recourse
claim established by judgment or award shall not constitute Nonrecourse
Indebtedness for purposes of this Agreement.
"Note" means a promissory note in the form attached hereto as
EXHIBIT D payable to a Lender, evidencing certain of the Obligations of the
Borrowers to such Lender and executed by the Borrowers as set forth in Section
2.10, as the same may be amended, supplemented, modified or restated from time
to time; "Notes" means, collectively, all of such Notes outstanding at any given
time.
"Obligations" means, collectively, the obligations of the
Borrowers in respect of principal, interest, fees, indemnities, and all other
amounts under or in connection with this Agreement or any of the other Loan
Documents, including reimbursement obligations in respect of Letters of Credit,
in each case whether such obligation arose before or after the commencement of
any bankruptcy, insolvency, receivership or other similar proceeding and whether
or not the obligation is undersecured or oversecured or deemed allowable,
provable or accruing against any Borrower in any such proceeding, including
interest calculated from the commencement of any such proceeding at the rate
provided in Section 2.13(c).
"Officer's Certificate" means a certificate signed by the
President, any Vice President or any Financial Officer of any Person, or such
other officer as may be specified herein, and delivered to the Administrative
Agent hereunder.
"Operating Lease" means, as applied to any Person, any Lease which
is not a Capital Lease.
"Other Taxes" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation referred to
and defined in ERISA and any successor entity performing similar functions.
"Permitted Encumbrances" means:
(a) liens imposed by law for taxes, assessments, governmental
charges or levies that are not yet due or are being contested in
compliance with Section 5.04;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the
ordinary course of business and securing obligations that are not
overdue by more than 30 days or are being contested in compliance with
Section 5.04;
(c) pledges and deposits made in the ordinary course of business
in compliance with workers' compensation, unemployment insurance and
other social security laws or regulations or to secure the performance
of bids, purchases, contracts (other than for the payment of borrowed
money) and surety, appeal and performance bonds;
(d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature, in each case in the
ordinary course of business;
<PAGE> 24
18
(e) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do
not materially detract from the value of the affected property or
interfere with the ordinary conduct of business of the Company or any
Subsidiary; and
(f) statutory and common law landlord liens;
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America),
in each case maturing within one year from the date of acquisition
thereof;
(b) investments in commercial paper maturing within 270 days from
the date of acquisition thereof and having, at such date of
acquisition, a rating of not less than A-2 or P-2 from S&P or from
Moody's, respectively;
(c) investments in certificates of deposit, banker's acceptances
and time deposits maturing within 180 days from the date of acquisition
thereof issued or guaranteed by or placed with, and money market
deposit accounts issued or offered by, any domestic office of any
commercial bank organized under the laws of the United States of
America or any State thereof which has a combined capital and surplus
and undivided profits of not less than $500,000,000;
(d) shares of so called "money market funds" registered with the
SEC under the Investment Company Act of 1940, as amended, which
maintain a level per share value, invest principally in marketable
direct or guaranteed obligations of the United States of America and
agencies and instrumentalities thereof and investments in commercial
paper having, at such date, a rating of not less than A-1 or P-1 from
S&P or from Moody's, respectively, and have total assets in excess of
$50,000,000 provided that any such shares are moved to a qualifying
money market fund within thirty (30) days after any Borrower, or any
Subsidiary has knowledge that any money market fund no longer has total
assets in excess of that amount; and
(e) fully collateralized repurchase agreements with a term of not
more than 30 days for securities described in clause (a) above and
entered into with a financial institution satisfying the criteria
described in clause (c) above.
"Permitted REIT Investments" means investments by the Company or
any Subsidiary in publicly traded warrants, publicly traded equity securities
and operating partnership units of publicly traded REITS.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Company or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
<PAGE> 25
19
"Pledge Agreement" means the Pledge Agreement of the Company in
substantially the form of EXHIBIT E.
"Predecessor Partnerships" means each of the limited partnerships
formed by the Company which were merged into the Subsidiary Partnerships and any
of them a "Predecessor Partnership."
"Prime Rate" means the rate of interest per annum publicly
announced from time to time by The Chase Manhattan Bank as its prime rate in
effect at its principal office in New York City; each change in the Prime Rate
shall be effective from and including the date such change is publicly announced
as being effective.
"Project" means any office, industrial/manufacturing facility,
educational facility, retail facility, distribution/warehouse facility, assembly
or production facility, hotel, day care center, storage facility, health
care/hospital facility, restaurant, radio or TV station,
broadcasting/communication facility (including any transmission facility), any
combination of any of the foregoing, or any land to be developed into any one or
more of the foregoing pursuant to a written agreement with respect to such land
for a transaction involving a Lease, owned, directly or indirectly, by any of
the Consolidated Businesses.
"Property" means any Real Property or personal property, plant,
building, facility, structure, equipment, general intangible, receivable, or
other asset owned or leased by any Consolidated Business or any Joint Venture in
which the Company, directly or indirectly, has a Joint Venture Holding.
"Real Property" means any present and future right, title and
interest (including, without limitation, any leasehold estate) in (i) any plots,
pieces or parcels of land, (ii) any Improvements of every nature whatsoever (the
rights and interests described in clauses (i) and (ii) above being the
"Premises"), (iii) all easements, rights of way, gores of land or any lands
occupied by streets, ways, alleys, passages, sewer rights, water courses, water
rights and powers, and public places adjoining such land, and any other
interests in property constituting appurtenances to the Premises, or which
hereafter shall in any way belong, relate or be appurtenant thereto, (iv) all
hereditaments, gas, oil, minerals (with the right to extract, sever and remove
such gas, oil and minerals), and easements, of every nature whatsoever, located
in, on or benefiting the Premises and (v) all other rights and privileges
thereunto belonging or appertaining and all extensions, additions, improvements,
betterments, renewals, substitutions and replacements to or of any of the rights
and interests described in clauses (iii) and (iv) above.
"Recognition Agreement" means a recognition agreement in
substantially the form of EXHIBIT F (including such changes as the
Administrative Agent believes are reasonable in any case and changes to reflect
variations in local law) including those delivered by the partners of the
Subsidiary Partnerships pursuant to Section 4.01 and any other recognition
agreement executed after the Effective Date in connection with any security
interest granted or purported to be granted to the Administrative Agent, for the
benefit of the Secured Parties, in the Subsidiary Partnership Interests, other
partnership interests, limited liability company interests, or other equity
interests (or portion thereof) in any Person, and each agreement, instrument or
document confirming, supplementing, amending or modifying any of the foregoing.
"Register" has the meaning set forth in Section 9.04.
"REIT" means a domestic trust or corporation that qualifies as a
real estate investment trust under the provisions of Sections 856, et seq. of
the Code.
<PAGE> 26
20
"REIT Investment Value" means, as of any date, the sum of (i) 80%
of the Fair Market Value as of the date of determination of Permitted REIT
Investments consisting of warrants, REIT shares and operating partnership units
that are unrestricted securities, plus (ii) 65% of the Fair Market Value as of
the date of determination of Permitted REIT Investments consisting of warrants,
REIT shares and operating partnership units that are restricted securities;
provided, that the Fair Market Value of Permitted REIT Investments in excess of
15% of the outstanding equity securities of any REIT and its related operating
Partnership shall be excluded in determining REIT Investment Value. For purposes
of this definition and the definition of Fair Market Value, the term "restricted
securities" shall mean securities which constitute "restricted securities" or
are held by an "affiliate" of the issuer of such securities, in each case in
accordance with Rule 144 promulgated under the Securities Act of 1933, as
amended, or are otherwise subject to any agreement, arrangement or other
understanding in any way limiting or affecting the right of the holder of such
securities to dispose of such securities. For purposes of this definition, the
term "unrestricted securities" shall mean securities which are not "restricted
securities."
"Related Parties" means, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person's Affiliates.
"Required Lenders" means, at any time, Lenders having Revolving
Credit Exposures and Unused Commitments representing at least 51% of the sum of
the total Revolving Credit Exposures and Unused Commitments at such time;
provided that, for purposes of declaring the Loans to be due and payable
pursuant to Article VII, and for all purposes after the Loans become due and
payable pursuant to Article VII or the Commitments expire or terminate, the
outstanding Competitive Loans of the Lenders shall be included in their
respective Revolving Credit Exposures in determining the Required Lenders.
"Residual Proceeds" means, as of any date, the sum of the
projected Net Cash Proceeds of the Company and the Subsidiaries (with
appropriate adjustments to account for minority interests in respect of (i) a
Project, (ii) the Subsidiary through which such Project is held and (iii) any
Joint Venture Holding) to be derived from (x) the exercise of a purchase option
by a tenant under a Lease which option has been irrevocably and unconditionally
exercised, the purchase price has been determined (by appraisal or otherwise),
the tenant has no right to elect not to close and the closing of which is
required to occur within twelve months of the date of determination or (y) an
agreement of sale entered into with a tenant where the purchase price has been
determined, the tenant has no right to terminate the agreement, there are no
conditions to closing thereunder other than delivery of title and the closing
will occur within twelve months of the date of determination; provided that Net
Cash Proceeds from the exercise of any purchase option shall be included in the
determination of Residual Proceeds only if the actual price of such option has
been determined and the creditworthiness of the tenant exercising such purchase
option shall be satisfactory to the Administrative Agent in its sole discretion;
provided, that any tenant shall be deemed creditworthy by the Administrative
Agent for purposes of this definition if such tenant has been a tenant under a
Lease of the Property subject to such option or agreement of sale for at least 3
years, has been timely in its payment of rent and fulfillment of all other
obligations under such Lease for the 12 month period immediately preceding the
date of determination and is not the subject of any pending bankruptcy,
insolvency or other similar proceeding.
"Restricted Payment" is defined in Section 6.01.
"Revolving Credit Exposure" means, with respect to any Lender at
any time, the sum of the outstanding principal amount of such Lender's Revolving
Loans and its LC Exposure at such time.
<PAGE> 27
21
"Revolving Loan" means a Loan made pursuant to Section 2.03.
"S&P" means Standard & Poor's.
"Secured Indebtedness" means any Indebtedness secured by a Lien
(excluding Indebtedness hereunder).
"Secured Party" means the Administrative Agent, the Issuing Bank
and each Lender.
"Security Documents" means the Pledge Agreement, each Recognition
Agreement, this Agreement to the extent that any of the provisions hereof create
or purport to create a security interest in any collateral securing any
Obligations for the benefit of the Secured Parties, and any documents requested
by the Administrative Agent from time to time pursuant to Section 5.12.
"Statutory Reserve Rate" means a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board to which the Administrative Agent is
subject with respect to the Adjusted LIBO Rate, for eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in Regulation D of the
Board). Such reserve percentages shall include those imposed pursuant to such
Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency
funding and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to any Lender under such Regulation D or any comparable regulation. The
Statutory Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.
"subsidiary" means, with respect to any Person (the "parent") at
any date, any corporation, limited liability company, partnership, association
or other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held, or (b) that is, as of such date,
otherwise Controlled, by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent.
"Subsidiary" means any direct or indirect subsidiary of the
Company.
"Subsidiary Partnerships" means each of Corporate Property
Associates, Corporate Property Associates 2, Corporate Property Associates 3,
Corporate Property Associates 4, a California limited partnership, Corporate
Property Associates 5, Corporate Property Associates 6-a California limited
partnership, Corporate Property Associates 7-a California limited partnership,
Corporate Property Associates 8, L.P. and Corporate Property Associates 9, L.P.,
and any of them a "Subsidiary Partnership".
"Subsidiary Partnership Interests" means a partnership interest in
any of the Subsidiary Partnerships.
"Taxes" means any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
<PAGE> 28
22
"Tenant Allowance" means a cash allowance paid to a tenant by the
landlord pursuant to a Lease.
"TI Work" means any construction or other "build-out" of tenant
leasehold improvements to the space demised to such tenant under Leases
(excluding such tenant's furniture, fixtures and equipment) performed pursuant
to the terms of such Leases, whether or not such tenant improvement work is
performed by or on behalf of the landlord or as part of a Tenant Allowance.
"Total Adjusted EBITDA" means, for any period, the aggregate sum
of the Adjusted EBITDA for the Company and/or its Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP.
"Total Interest Expense" means, for any period, the sum, without
duplication, of (i) interest expense of the Company and/or its Subsidiaries paid
during such period (with appropriate adjustments for minority interests) and
(ii) interest expense of the Company and/or its Subsidiaries accrued and/or
capitalized for such period (with appropriate adjustments for minority
interests) and (iii) the portion of the interest expense of Joint Ventures
allocable to the Company in accordance with GAAP on account ownership of Joint
Venture Holdings and paid during such period and (iv) the portion of the
interest expense of Joint Ventures allocable to the Company in accordance with
GAAP on account of ownership of Joint Venture Holdings and accrued and/or
capitalized for such period, in each case including participating interest
expense but excluding extraordinary interest expense, and net of amortization of
deferred costs associated with new financings or refinancings of existing
Indebtedness.
"Total Outstanding Indebtedness" means, as of any date, the sum,
without duplication, of (i) the amount of Indebtedness of the Company and/or its
Subsidiaries set forth on the then most recent quarterly financial statements of
the Company, prepared in accordance with GAAP, plus any additional Indebtedness
incurred by the Company and/or its Subsidiaries since the time of such
statements (with appropriate adjustments for minority interests) and (ii) the
outstanding amount of Joint Venture Indebtedness allocable in accordance with
GAAP on account of ownership of Joint Venture Holdings to any of the Company
and/or its Subsidiaries as of the time of determination (with appropriate
adjustments for minority interests) and (iii) the Contingent Obligations of the
Company and/or its Subsidiaries and, to the extent allocable to the Company
and/or its Subsidiaries in accordance with GAAP on account of ownership of Joint
Venture Holdings, of the Joint Ventures (with appropriate adjustments for
minority interests).
"Total Outstanding Indebtedness Limitation" has the meaning set
forth in Section 6.01.
"Total Secured Outstanding Indebtedness" means, as of any date,
the portion of Total Outstanding Indebtedness that is Secured Indebtedness.
"Total Secured Outstanding Indebtedness Limitation" has the
meaning set forth in Section 6.01.
"Total Unsecured Outstanding Indebtedness" means, as of any date,
the portion of Total Outstanding Indebtedness that is Unsecured Indebtedness.
"Total Unsecured Outstanding Indebtedness Limitation" has the
meaning set forth in Section 6.01.
<PAGE> 29
23
"Total Value" means, as of any date, the sum, without duplication,
of (i) Valuation NOI as of the first day of the fiscal quarter in which such
date occurs divided by .10; (ii) the investment (at cost without depreciation)
in Projects owned by the Company and/or its Subsidiaries for less than four
fiscal quarters (with appropriate adjustments for minority interests); (iii) the
investment (at cost without depreciation) in Joint Venture Holdings for less
than four fiscal quarters allocable to any of the Company and/or its
Subsidiaries; (iv) unrestricted Cash and Cash Equivalents which would be
included on the Consolidated Businesses' consolidated balance sheet as of such
date (with appropriate adjustments for minority interests); (v) investments in
notes secured by mortgages on the Real Property of any Person, at cost, less an
amount equal to accrued amortization payments in respect thereof, which amount
under this clause (v) shall be limited to 15% of Total Value; (vi) the REIT
Investment Value, which amount under this clause (vi) shall be limited to a
maximum of $50,000,000; and (vii) the Fair Market Value of all Permitted
Investments and Marketable Securities held by the Company and/or its
Subsidiaries. Notwithstanding the foregoing, the aggregate investments by the
Company and its consolidated Subsidiaries in Properties which are not office or
industrial/manufacturing, retail or distribution/warehouse in nature shall not
exceed five percent (5%) of Total Value.
"Transactions" means the execution, delivery and performance by
the Borrowers of this Agreement, the borrowing of Loans, the use of the proceeds
thereof, the issuance of Letters of Credit hereunder and the execution, delivery
and performance by the Borrowers or the Subsidiaries (who may be parties to the
Loan Documents) of the other Loan Documents, and the transactions contemplated
by the Loan Documents.
"Triple Net Lease" means a Lease representing all or substantially
all of the rentable area of a Property where the tenant is responsible for real
estate taxes and assessments, repairs and maintenance, insurance and other
expenses relating to such Property, provided, that adequate insurance is
maintained for such Property either by the tenant or the Company and/or a
Subsidiary Partnership, Subsidiary or Joint Venture. Notwithstanding the
foregoing, a Triple Net Lease may be subject to the landlord's express
contractual obligations with respect to the payment of taxes, assessments,
ground rents, utility charges, exterior maintenance and maintenance of all
non-interior areas and any capital expenditures related thereto (such as roof,
structure and parking) (the "Contractual Obligations") so long as the capital
expenditures have been adequately accounted for in accordance with GAAP;
provided, that the projected average annual Contractual Obligations shall not
exceed 10% of the projected average gross annual rent under such Lease. For
purposes of this definition, (a) the obligation of such landlord to make capital
improvements or repairs as a condition to a tenant's occupancy (e.g., build to
suit transactions) shall not be deemed to be an undertaking by such landlord of
any tenant maintenance or repair obligations and (b) the improvements to be
constructed by such landlord described in the immediately preceding clause (a)
shall not be included as a capital expenditure.
"Type", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate, the Alternate
Base Rate or, in the case of a Competitive Loan or Borrowing, the LIBO Rate.
"Unconsolidated Entity" means, with respect to any Person, at any
date, any other Person in whom such Person holds an investment, which investment
is accounted for in the financial statements of such Person on an equity basis
of accounting and whose financial results would not be consolidated under GAAP
with the financial results of such Person on the consolidated financial
statements of such Person if such statements were prepared as of such date.
<PAGE> 30
24
"Unencumbered Eligible Project" means an Eligible Project which is
not an Encumbered Eligible Project.
"Unencumbered Lease Value" means, as of any date, the sum of the
net present value of the projected contractual income, net of the projected
expenses to be incurred by landlord, from all Eligible Leases of Unencumbered
Eligible Projects (with appropriate adjustments with respect to minority
interests in Joint Ventures and the Subsidiaries through which such Projects are
held to reflect the actual percentage interest of income entitled to be received
where the collective ownership interests are less than 100%), discounted at an
annual rate of 10.5%. In determining Unencumbered Lease Value, income from lease
extensions under any Lease will be included only if the extension right with
respect to such Lease has been unconditionally and irrevocably exercised by the
tenant (or the tenant has lost its rights to terminate the lease prior to the
automatic extension thereof). In determining the amount of projected contractual
income, net of projected expenses to be incurred by landlord, from any Eligible
Lease, all amounts attributable to adjustments in rental obligations of a tenant
that are contingent (for example, rental increases based upon a specified
occupancy rate) or otherwise indeterminate (for example, rental increases based
upon index adjustments), shall be excluded.
"Unsecured Indebtedness" means any Indebtedness not secured by a
Lien and any Indebtedness hereunder.
"Unsecured Interest Expense" means, for any period, the greater of
(i) the actual interest expense paid, accrued or capitalized on the Total
Unsecured Outstanding Indebtedness for the applicable period or (ii) the
interest expense that would have been paid, accrued or capitalized on the Total
Unsecured Outstanding Indebtedness for the applicable period, assuming for the
applicable period an interest rate of 7%.
"Unused Commitment" means, as of any date, with respect to each
Lender, the Commitment less Revolving Credit Exposure.
"Unused Facility Fee Rate" means the applicable rate per annum set
forth below under the caption "Unused Facility Fee Rate" for any Unused
Commitment amounts based upon the range into which the Leverage Ratio then falls
in accordance with the following table:
<TABLE>
<CAPTION>
Unused Facility Fee
Leverage Ratio Rate (bps)
- -------------- ----------
<S> <C>
less than 30% 15.0
30%-less than 45% 17.5
45%-55% (or higher) 20.0
</TABLE>
Any change in the Unused Facility Fee Rate shall be effective as of the
financial reporting dates set forth in Section 5.01 or as of the date of any
borrowing on which the Leverage Ratio changes.
"Valuation NOI" means, with respect to all Projects or Joint
Venture Holdings which have been owned by the Company or any Subsidiary for not
less than four consecutive quarters, as of the first day of each fiscal quarter,
an amount equal to the sum, without duplication, of (i) Adjusted NOI relating to
all such Projects for the immediately preceding consecutive four fiscal
quarters, and (ii) Adjusted NOI of all such Joint Venture Holdings allocable to
the Company in accordance with GAAP for the immediately preceding consecutive
four fiscal quarters.
<PAGE> 31
25
"Wholly-Owned Subsidiary" means, with respect to any Person, at
any date, any subsidiary of such Person of which 100% of the outstanding shares
of capital stock or other equity interests having ordinary voting power is at
the time, directly or indirectly, owned by such Person.
"Withdrawal Liability" means liability to a Multiemployer Plan as
a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Classification of Loans and Borrowings. For purposes
of this Agreement, Loans may be classified and referred to by Class (e.g., a
"Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by Class and Type
(e.g., a "Eurodollar Revolving Loan"). Borrowings also may be classified and
referred to by Class (e.g., a "Revolving Borrowing") or by Type (e.g., a
"Eurodollar Borrowing") or by Class and Type (e.g., a "Eurodollar Revolving
Borrowing").
SECTION 1.03. Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time; provided
that, if the Company notifies the Administrative Agent that the Company requests
an amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the Company
that the Required Lenders request an amendment to any provision hereof for such
purpose), regardless of whether any such notice is given before or after such
change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
ARTICLE II
The Credits
SECTION 2.01. Commitments. Subject to the terms and conditions set
forth herein, each Lender agrees to make Revolving Loans to the Borrower from
time to time during the Availability Period in an aggregate principal amount
that will not result in (a) such Lender's Revolving Credit
<PAGE> 32
26
Exposure exceeding such Lender's Commitment or (b) the sum of the total
Revolving Credit Exposures plus the aggregate principal amount of outstanding
Competitive Loans exceeding the lesser of total Commitments or the Borrowing
Base at such time. Within the foregoing limits and subject to the terms and
conditions set forth herein, the Company may borrow, prepay and reborrow
Revolving Loans. No Loans may be borrowed or reborrowed after the end of the
Availability Period.
SECTION 2.02. Loans and Borrowings. (a) Each Revolving Loan shall
be made as part of a Borrowing consisting of Revolving Loans made by the Lenders
ratably in accordance with their respective Commitments. Each Competitive Loan
shall be made in accordance with the procedures set forth in Section 2.04. The
failure of any Lender to make any Loan required to be made by it shall not
relieve any other Lender of its obligations hereunder; provided that the
Commitments and Competitive Bids of the Lenders are several and no Lender shall
be responsible for any other Lender's failure to make Loans as required.
(b) Subject to Section 2.14, (i) each Revolving Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Revolving Loans as the Company may
request in accordance herewith, and (ii) each Competitive Borrowing shall be
comprised entirely of Eurodollar Competitive Loans. Each Lender at its option
may make any Eurodollar Loan by causing any domestic or foreign branch or
Affiliate of such Lender to make such Loan; provided that any exercise of such
option shall not affect the obligation of the Company to repay such Loan in
accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any Eurodollar
Revolving Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of $500,000 and not less than $3,000,000. At the time that
each ABR Revolving Borrowing is made, such Borrowing shall be in an aggregate
amount that is an integral multiple of $500,000 and not less than $3,000,000;
provided that an ABR Revolving Borrowing may be in an aggregate amount that is
equal to the entire unused balance of the total Commitments or that is required
to finance the reimbursement of an LC Disbursement as contemplated by Section
2.06(e). Each Competitive Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000 and not less than $20,000,000. Borrowings of
more than one Type and Class may be outstanding at the same time; provided that
there shall not at any time be more than a total of eight Eurodollar Revolving
Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Company shall not be entitled to request, or to elect to convert or continue,
any Eurodollar Borrowing if the Interest Period requested with respect thereto
would end after the Maturity Date.
SECTION 2.03. Requests for Revolving Borrowings. To request a
Revolving Borrowing, the Company shall notify the Administrative Agent of such
request by telephone (a) in the case of a Eurodollar Revolving Borrowing, not
later than 11:00 a.m., New York City time, three Business Days before the date
of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later than
11:00 a.m., New York City time, one Business Day before the date of the proposed
Borrowing; provided that any such notice of an ABR Revolving Borrowing to
finance the reimbursement of an LC Disbursement as contemplated by Section
2.06(e) may be given not later than 10:00 a.m., New York City time, on the date
of the proposed Borrowing. Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Borrowing Request approved by the
Administrative Agent substantially in the form set forth in EXHIBIT C and signed
by the Company. Each such telephonic and written Borrowing Request shall specify
the following information in compliance with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
<PAGE> 33
27
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Revolving Borrowing;
(iv) in the case of a Eurodollar Revolving Borrowing, the initial
Interest Period to be applicable thereto, which shall be a period
contemplated by the definition of the term "Interest Period"; and
(v) the location and number of the Company's account to which
funds are to be disbursed, which shall comply with the
requirements of Section 2.07.
If no election as to the Type of Revolving Borrowing is specified, then the
requested Revolving Borrowing shall be a Eurodollar Revolving Borrowing with an
Interest Period of one month. If no Interest Period is specified with respect to
any requested Eurodollar Revolving Borrowing, then the Company shall be deemed
to have selected an Interest Period of one month's duration. Promptly following
receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender's Revolving Loan to be made as part of the requested
Borrowing.
SECTION 2.04. Competitive Bid Procedure. (a) Subject to the terms
and conditions set forth herein, from time to time during the Availability
Period the Company may request Competitive Bids and may (but shall not have any
obligation to) accept Competitive Bids and borrow Competitive Loans; provided
that the sum of the total Revolving Credit Exposures plus the aggregate
principal amount of outstanding Competitive Loans at any time shall not exceed
the lesser of the total Commitments or the Borrowing Base at such time. To
request Competitive Bids, the Company shall notify the Administrative Agent of
such request by telephone, not later than 11:00 a.m., New York City time, four
Business Days before the date of the proposed Borrowing; provided that a
Competitive Bid Request shall not be made within 30 Business Days after the date
of any previous Competitive Bid Request. Each such telephonic Competitive Bid
Request shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Competitive Bid Request in a form approved by
the Administrative Agent and signed by the Company. Each such telephonic and
written Competitive Bid Request shall specify the following information in
compliance with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) the Interest Period to be applicable to such Borrowing,
which shall be a period contemplated by the definition of the term
"Interest Period"; and
(iv) the location and number of the Company's account to which
funds are to be disbursed, which shall comply with the
requirements of Section 2.07.
Promptly following receipt of a Competitive Bid Request in
accordance with this Section, the Administrative Agent shall notify the Lenders
of the details thereof by telecopy, inviting the Lenders to submit Competitive
Bids.
(b) Each Lender may (but shall not have any obligation to) make
one or more Competitive Bids to the Company in response to a Competitive Bid
Request. Each Competitive Bid by a
<PAGE> 34
28
Lender must be in a form approved by the Administrative Agent and must be
received by the Administrative Agent by telecopy, not later than 9:30 a.m., New
York City time, three Business Days before the proposed date of such Competitive
Borrowing. Competitive Bids that do not conform substantially to the form
approved by the Administrative Agent may be rejected by the Administrative
Agent, and the Administrative Agent shall notify the applicable Lender as
promptly as practicable. Each Competitive Bid shall specify (i) the principal
amount (which shall be a minimum of $5,000,000 and an integral multiple of
$1,000,000 and which may equal the entire principal amount of the Competitive
Borrowing requested by the Company) of the Competitive Loan or Loans that the
applicable Lender is willing to make, (ii) the Competitive Bid Rate or Rates at
which such Lender is prepared to make such Loan or Loans (expressed as a
percentage rate per annum in the form of a decimal to no more than four decimal
places) and (iii) the Interest Period applicable to each such Loan and the last
day thereof.
(c) The Administrative Agent shall promptly notify the Company by
telecopy of the Competitive Bid Rate and the principal amount specified in each
Competitive Bid and the identity of the Lender that shall have made such
Competitive Bid.
(d) Subject only to the provisions of this paragraph, the Company
may accept or reject any Competitive Bid. The Company shall notify the
Administrative Agent by telephone, confirmed by telecopy in a form approved by
the Administrative Agent, whether and to what extent it has decided to accept or
reject each Competitive Bid, not later than 10:30 a.m., New York City time,
three Business Days before the date of the proposed Competitive Borrowing;
provided that (i) the failure of the Company to give such notice shall be deemed
to be a rejection of each Competitive Bid, (ii) the Company shall not accept a
Competitive Bid made at a particular Competitive Bid Rate if the Company rejects
a Competitive Bid made at a lower Competitive Bid Rate, (iii) the aggregate
amount of the Competitive Bids accepted by the Company shall not exceed the
aggregate amount of the requested Competitive Borrowing specified in the related
Competitive Bid Request, (iv) to the extent necessary to comply with clause
(iii) above, the Company may accept Competitive Bids at the same Competitive Bid
Rate in part, which acceptance, in the case of multiple Competitive Bids at such
Competitive Bid Rate, shall be made pro rata in accordance with the amount of
each such Competitive Bid, and (v) except pursuant to clause (iv) above, no
Competitive Bid shall be accepted for a Competitive Loan unless such Competitive
Loan is in a minimum principal amount of $5,000,000 and an integral multiple of
$1,000,000; provided further that if a Competitive Loan must be in an amount
less than $5,000,000 because of the provisions of clause (iv) above, such
Competitive Loan may be for a minimum of $1,000,000 or any integral multiple
thereof, and in calculating the pro rata allocation of acceptances of portions
of multiple Competitive Bids at a particular Competitive Bid Rate pursuant to
clause (iv) above the amounts shall be rounded to integral multiples of
$1,000,000 in a manner determined by the Company. A notice given by the Company
pursuant to this paragraph shall be irrevocable.
(e) The Administrative Agent shall promptly notify each bidding
Lender by telecopy whether or not its Competitive Bid has been accepted (and, if
so, the amount and Competitive Bid Rate so accepted), and each successful bidder
will thereupon become bound, subject to the terms and conditions hereof, to make
the Competitive Loan in respect of which its Competitive Bid has been accepted.
(f) If the entity which is the Administrative Agent shall elect to
submit a Competitive Bid in its capacity as a Lender, it shall submit such
Competitive Bid directly to the Company at least one quarter of an hour earlier
than the time by which the other Lenders are required to submit their
Competitive Bids to the Administrative Agent pursuant to paragraph (b) of this
Section.
<PAGE> 35
29
SECTION 2.05. Additional Borrower(s); Release of Pledge. (a) Upon
any Subsidiary Partnership becoming a Wholly-Owned Subsidiary of the Company,
such Subsidiary Partnership shall, and at any time any Subsidiary Partnership or
any other Wholly-Owned Subsidiary of the Company may, become a Borrower (a "New
Borrower") under this Agreement subject to (i) the execution and delivery by the
New Borrower of an instrument substantially in the form of EXHIBIT G hereto
(including such changes as the Administrative Agent reasonably believes are
necessary in any case, including changes to reflect variations in local law);
(ii) if requested by the Administrative Agent in its sole discretion, the
execution and delivery by the New Borrower of instruments satisfactory to the
Administrative Agent in its sole discretion confirming that the Pledge Agreement
(x) shall apply in all respects to the Obligations of the New Borrower as a
Borrower and (y) shall continue to apply in respect of all other Obligations;
(iii) the execution and delivery of such other instruments, documents, legal
opinions and agreements as the Administrative Agent or the Issuing Bank shall
reasonably request in order that the New Borrower and its assets shall be in
substantially the same position in respect of the Administrative Agent, the
Issuing Bank and the Lenders as are the Borrowers and their assets hereunder;
and (iv) the execution and delivery to the Administrative Agent by the New
Borrower of all the certificates (including a certificate of a Financial Officer
of the Company to the effect that no Default exists or would exist after giving
effect to the addition of the New Borrower as a Borrower under this Agreement),
instruments, resolutions, documents, and opinions that would have been required
under Article IV in respect of the New Borrower had it been a Borrower on the
Effective Date.
(b) Upon the satisfaction of each of the conditions specified in
paragraph (a) above; provided that no Default has occurred and is continuing,
the Administrative Agent shall release the Lien under the Pledge Agreement in
respect of the Subsidiary Partnership Interests and debt securities of such New
Borrower. The release of any such Lien shall not impair or otherwise affect the
rights and remedies of the Secured Parties upon the occurrence and during the
continuance of any Event of Default.
(c) In the event that on or prior to the 270th day following the
Effective Date the Company has not caused each of the Subsidiary Partnerships to
become a Borrower under this Agreement, the Company shall immediately pledge to
the Administrative Agent as Collateral for the Obligations, for the ratable
benefit of the Secured Parties, all general partnership interests in each
Subsidiary Partnership that is not a Borrower under this Agreement on such date
by delivering to the Administrative Agent a pledge agreement in substantially
the form of the Pledge Agreement and otherwise in form and substance reasonably
satisfactory to the Administrative Agent, together with such other instruments
as the Administrative Agent acting on behalf of the Lenders may reasonably
request for the purpose of granting to the Secured Parties first and exclusive
security interests in such general partnership interests, together with other
reasonable assurances as to the enforceability and priority of the Liens under
the Security Documents with respect to such general partnership interests.
SECTION 2.06. Letters of Credit. (a) General. Subject to the terms
and conditions set forth herein, the Company may request the issuance of Letters
of Credit for its own account, in a form reasonably acceptable to the
Administrative Agent and the Issuing Bank, at any time and from time to time
during the period commencing on the Effective Date and ending on the date that
is 46 Business Days prior to the Maturity Date, provided that the amount of each
Letter of Credit so requested shall be not less than $300,000 and provided
further that no more than five Letters of Credit may be outstanding at any time.
In the event of any inconsistency between the terms and conditions of this
Agreement and the terms and conditions of any form of letter of credit
application or other agreement submitted by the Company to, or entered into by
the Company with, the Issuing Bank relating to any Letter of Credit, the terms
and conditions of this Agreement shall control.
<PAGE> 36
30
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Company shall hand
deliver or telecopy (or transmit by electronic communication, if arrangements
for doing so have been approved by the Issuing Bank) to the Issuing Bank and the
Administrative Agent (reasonably in advance of the requested date of issuance,
amendment, renewal or extension) a notice requesting the issuance of a Letter of
Credit, or identifying the Letter of Credit to be amended, renewed or extended,
the date of issuance, amendment, renewal or extension, the date on which such
Letter of Credit is to expire (which shall comply with paragraph (c) of this
Section), the amount of such Letter of Credit, the name and address of the
beneficiary thereof and such other information as shall be necessary to prepare,
amend, renew or extend such Letter of Credit. Each such notice shall be
accompanied by a pro forma Borrowing Base Certificate evidencing compliance with
this Agreement after giving effect to the issuance of such Letter of Credit. If
requested by the Issuing Bank, the Company also shall submit a letter of credit
application on the Issuing Bank's standard form in connection with any request
for a Letter of Credit. A Letter of Credit shall be issued, amended, renewed or
extended only if (and upon issuance, amendment, renewal or extension of each
Letter of Credit the Company shall be deemed to represent and warrant that),
after giving effect to such issuance, amendment, renewal or extension (i) the LC
Exposure shall not exceed $20,000,000 and (ii) the sum of the total Revolving
Credit Exposures plus the aggregate principal amount of outstanding Competitive
Loans shall not exceed lesser of the total Commitments or the Borrowing Base at
such time.
(c) Expiration Date. Each Letter of Credit shall expire at or
prior to the close of business on the earlier of (i) the date one year after the
date of the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension) and (ii) the date
that is 45 Business Days prior to the Maturity Date.
(d) Participations. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Bank or the Lenders, the Issuing Bank
hereby grants to each Lender, and each Lender hereby acquires from the Issuing
Bank, a participation in such Letter of Credit equal to such Lender's Applicable
Percentage of the aggregate amount available to be drawn under such Letter of
Credit. In consideration and in furtherance of the foregoing, each Lender hereby
absolutely and unconditionally agrees to pay to the Administrative Agent, for
the account of the Issuing Bank, such Lender's Applicable Percentage of each LC
Disbursement made by the Issuing Bank and not reimbursed by the Company on the
date due as provided in paragraph (e) of this Section, or of any reimbursement
payment required to be refunded to the Company for any reason. Each Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this paragraph in respect of Letters of Credit (subject to Section 2.06(c))
is absolute and unconditional and shall not be affected by any circumstance
whatsoever, including any amendment, renewal or extension of any Letter of
Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.
(e) Reimbursement. If the Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the Company shall reimburse such
LC Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 12:00 noon, New York City time, on the date that
such LC Disbursement is made, if the Company shall have received notice of such
LC Disbursement prior to 10:00 a.m., New York City time, on such date, or, if
such notice has not been received by the Company prior to such time on such
date, then not later than 12:00 noon, New York City time, on (i) the Business
Day that the Company receives such notice, if such notice is received prior to
10:00 a.m., New York City time, on the day of receipt, or (ii) the Business Day
immediately following
<PAGE> 37
31
the day that the Company receives such notice, if such notice is not received
prior to such time on the day of receipt; provided that, if such LC Disbursement
is not less than $5,000,000, the Company may, subject to the conditions to
borrowing set forth herein, request in accordance with Section 2.03 or 2.05 that
such payment be financed with an ABR Revolving Borrowing in an equivalent amount
and, to the extent so financed, the Company's obligation to make such payment
shall be discharged and replaced by the resulting ABR Revolving Borrowing. If
the Company fails to make such payment when due, the Administrative Agent shall
notify each Lender of the applicable LC Disbursement, the payment then due from
the Company in respect thereof and such Lender's Applicable Percentage thereof.
Promptly following receipt of such notice, each Lender shall pay to the
Administrative Agent its Applicable Percentage of the payment then due from the
Company, in the same manner as provided in Section 2.07 with respect to Loans
made by such Lender (and Section 2.07 shall apply, mutatis mutandis, to the
payment obligations of the Lenders), and the Administrative Agent shall promptly
pay to the Issuing Bank the amounts so received by it from the Lenders. Promptly
following receipt by the Administrative Agent of any payment from the Company
pursuant to this paragraph, the Administrative Agent shall distribute such
payment to the Issuing Bank or, to the extent that Lenders have made payments
pursuant to this paragraph to reimburse the Issuing Bank, then to such Lenders
and the Issuing Bank as their interests may appear. Any payment made by a Lender
pursuant to this paragraph to reimburse the Issuing Bank for any LC Disbursement
(other than the funding of ABR Revolving Loans as contemplated above) shall not
constitute a Loan and shall not relieve the Company of its obligation to
reimburse such LC Disbursement.
(f) Obligations Absolute. The Company's obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Company's obligations hereunder. Neither
the Administrative Agent, the Lenders nor the Issuing Bank, nor any of their
Related Parties, shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
Issuing Bank; provided that the foregoing (and the agreement of the Company in
the first sentence of this Section 2.06(f)) shall not be construed to excuse the
Issuing Bank from liability to the Company to the extent of any direct damages
(as opposed to consequential damages, claims in respect of which are hereby
waived by the Company to the extent permitted by applicable law) suffered by the
Company that are caused by the Issuing Bank's failure to exercise care when
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. The parties hereto expressly agree that,
in the absence of gross negligence or willful misconduct on the part of the
Issuing Bank (as finally determined by a court of competent jurisdiction), the
Issuing Bank shall be deemed to have exercised care in each such determination.
In furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented which appear on their
face to be in substantial
<PAGE> 38
32
compliance with the terms of a Letter of Credit, the Issuing Bank may, in its
sole discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.
(g) Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Administrative Agent and the Company by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve the Company of its obligation to
reimburse the Issuing Bank and the Lenders with respect to any such LC
Disbursement.
(h) Interim Interest. If the Issuing Bank shall make any LC
Disbursement, then, unless the Company shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Company reimburses such LC Disbursement,
at the rate per annum then applicable to ABR Revolving Loans; provided that, if
the Company fails to reimburse such LC Disbursement when due pursuant to
paragraph (e) of this Section, then Section 2.13(e) shall apply. Interest
accrued pursuant to this paragraph shall be for the account of the Issuing Bank,
except that interest accrued on and after the date of payment by any Lender
pursuant to paragraphs (d) or (e) of this Section to reimburse the Issuing Bank
shall be for the account of such Lender to the extent of such payment.
(i) Replacement of the Issuing Bank. The Issuing Bank may be
replaced at any time by written agreement among the Company, the Administrative
Agent, the replaced Issuing Bank and the successor Issuing Bank. The
Administrative Agent shall notify the Lenders of any such replacement of the
Issuing Bank. At the time any such replacement shall become effective, the
Company shall pay all unpaid fees accrued for the account of the replaced
Issuing Bank pursuant to Section 2.12(b). From and after the effective date of
any such replacement, (i) the successor Issuing Bank shall have all the rights
and obligations of the Issuing Bank under this Agreement with respect to Letters
of Credit to be issued thereafter and (ii) references herein to the term
"Issuing Bank" shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require. After the replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of an Issuing Bank under this Agreement with respect
to Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.
(j) Cash Collateralization. If any Event of Default shall occur
and be continuing, on the Business Day that the Company receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Lenders with LC Exposure representing at least 51% of the
total LC Exposure) demanding the deposit of cash collateral pursuant to this
paragraph, the Company shall deposit in an account with the Administrative
Agent, in the name of the Administrative Agent and for the benefit of the
Lenders, an amount in cash equal to the LC Exposure as of such date plus any
accrued and unpaid interest thereon; provided that the obligation to deposit
such cash collateral shall become effective immediately, and such deposit shall
become immediately due and payable, without demand or other notice of any kind,
upon the occurrence of any Event of Default with respect to the Company
described in clause (h) or (i) of Article VII. Such deposit shall be held by the
Administrative Agent as collateral for the payment and performance of the
obligations of the Company under this Agreement. The Administrative Agent shall
have exclusive dominion and control, including
<PAGE> 39
33
the exclusive right of withdrawal, over such account. Other than any interest
earned on the investment of such deposits, which investments shall be made at
the option and sole discretion of the Administrative Agent and at the Company's
risk and expense, such deposits shall not bear interest. Interest or profits, if
any, on such investments shall accumulate in such account. Moneys in such
account shall be applied by the Administrative Agent to reimburse the Issuing
Bank for LC Disbursements for which it has not been reimbursed and, to the
extent not so applied, shall be held for the satisfaction of the reimbursement
obligations of the Company for the LC Exposure at such time or, if the maturity
of the Loans has been accelerated (but subject to the consent of Required
Lenders with LC Exposure representing at least 51% of the total LC Exposure), be
applied to satisfy other obligations of the Company under this Agreement. If the
Company is required to provide an amount of cash collateral hereunder as a
result of the occurrence of an Event of Default, such amount (to the extent not
applied as aforesaid) shall be returned to the Company within three Business
Days after all Events of Default have been cured or waived.
SECTION 2.07. Funding of Borrowings. (a) Each Lender shall make
each Loan to be made by it hereunder on the proposed date thereof by wire
transfer of immediately available funds by 12:00 noon, New York City time, to
the account of the Administrative Agent most recently designated by it for such
purpose by notice to the Lenders. The Administrative Agent will make such Loans
available to the Company by promptly crediting the amounts so received, in like
funds, to an account of the Company maintained with the Administrative Agent in
New York City and designated by the Company in the applicable Borrowing Request
or Competitive Bid Request; provided that ABR Revolving Loans made to finance
the reimbursement of an LC Disbursement as provided in Section 2.06(e) shall be
remitted by the Administrative Agent to the Issuing Bank.
(b) Unless the Administrative Agent shall have received notice
from a Lender prior to the proposed date of any Borrowing that such Lender will
not make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the Company a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender and the Borrowers severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to the
Company to but excluding the date of payment to the Administrative Agent, at (i)
in the case of such Lender, the greater of the Federal Funds Effective Rate and
a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation or (ii) in the case of the Company, the
interest rate applicable to ABR Loans. If such Lender pays such amount to the
Administrative Agent, then such amount shall constitute such Lender's Loan
included in such Borrowing as of the date of Borrowing. If any interest is paid
by the Borrower as described above for any period with respect to any amount
funded by the Administrative Agent pursuant to this paragraph, the Borrower
shall not be required to pay interest on such amount pursuant to Section 2.13 in
respect of such period.
SECTION 2.08. Interest Elections. (a) Each Revolving Borrowing
initially shall be of the Type specified in the applicable Borrowing Request
and, in the case of a Eurodollar Revolving Borrowing, shall have an initial
Interest Period as specified in such Borrowing Request. Thereafter, the Company
may elect to convert such Borrowing to a different Type or to continue such
Borrowing and, in the case of a Eurodollar Revolving Borrowing, may elect
Interest Periods therefor, all as provided in this Section. The Company may
elect different options with respect to different portions of the affected
Borrowing, in which case each such portion shall be allocated ratably among the
Lenders holding the Loans comprising such Borrowing, and the Loans comprising
each such portion shall be considered a
<PAGE> 40
34
separate Borrowing. This Section shall not apply to Competitive Borrowings,
which may not be converted or continued.
(b) To make an election pursuant to this Section, the Company
shall notify the Administrative Agent of such election by telephone by the time
that a Borrowing Request would be required under Section 2.03 if the Company
were requesting a Revolving Borrowing of the Type resulting from such election
to be made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Interest Election
Request in a form approved by the Administrative Agent and signed by the
Company.
(c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to
different portions thereof, the portions thereof to be allocated to
each resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) below shall be specified for each
resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or
a Eurodollar Revolving Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Revolving
Borrowing, the Interest Period to be applicable thereto after giving
effect to such election, which shall be a period contemplated by the
definition of the term "Interest Period".
If any such Interest Election Request requests a Eurodollar Revolving Borrowing
but does not specify an Interest Period, then the Company shall be deemed to
have selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request,
the Administrative Agent shall advise each Lender of the details thereof and of
such Lender's portion of each resulting Borrowing.
(e) If the Company fails to deliver a timely Interest Election
Request with respect to a Eurodollar Revolving Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if
an Event of Default has occurred and is continuing and the Administrative Agent,
at the request of the Required Lenders, so notifies the Company, then, so long
as an Event of Default is continuing (i) no outstanding Revolving Borrowing may
be converted to or continued as a Eurodollar Borrowing and (ii) unless repaid,
each Eurodollar Revolving Borrowing shall be converted to an ABR Borrowing at
the end of the Interest Period applicable thereto.
SECTION 2.09. Termination and Reduction of Commitments. (a) Unless
previously terminated, the Commitments shall terminate on the Maturity Date.
<PAGE> 41
35
(b) The Company may at any time terminate, or from time to time
reduce, the Commitments; provided that (i) each reduction of the Commitments
shall be in an amount that is an integral multiple of $500,000 and not less than
$5,000,000 and (ii) the Company shall not terminate or reduce the Commitments
if, after giving effect to any concurrent prepayment of the Loans in accordance
with Section 2.11, the sum of the Revolving Credit Exposures plus the aggregate
principal amount of outstanding Competitive Loans would exceed the total
Commitments.
(c) The Company shall notify the Administrative Agent of any
election to terminate or reduce the Commitments under paragraph (b) of this
Section at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Company pursuant to this Section shall be irrevocable; provided that a notice of
termination of the Commitments delivered by the Company may state that such
notice is conditioned upon the effectiveness of other credit facilities, in
which case such notice may be revoked by the Company (by notice to the
Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Commitments
shall be permanent. Each reduction of the Commitments shall be made ratably
among the Lenders in accordance with their respective Commitments.
SECTION 2.10. Repayment of Loans; Evidence of Debt. (a) The
Borrowers hereby unconditionally promise to pay (i) to the Administrative Agent
for the account of each Lender the then unpaid principal amount of each
Revolving Loan on the Maturity Date, and (ii) to the Administrative Agent for
the account of each Lender the then unpaid principal amount of each Competitive
Loan on the last day of the Interest Period applicable to such Loan.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrowers to
such Lender resulting from each Loan made by such Lender, including the amounts
of principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, the Class and Type
thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrowers to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrowers
to repay the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced by a
Note. In such event, the Borrowers shall prepare, execute and deliver to such
Lender a Note payable to the order of such Lender (or, if requested by such
Lender, to such Lender and its registered assigns). Thereafter, the Loans
evidenced by such Note and interest thereon shall at all times (including after
assignment pursuant to Section 9.04) be represented by one or more Notes in such
form payable to the order of the payee named therein.
<PAGE> 42
36
SECTION 2.11. Prepayment of Loans. (a) The Borrowers shall have
the right at any time and from time to time to prepay any Borrowing in whole or
in part, subject to prior notice in accordance with paragraph (b) of this
Section; provided that the Borrowers shall not have the right to prepay any
Competitive Loan without the prior consent of the Lender thereof.
(b) The Company shall notify the Administrative Agent by telephone
(confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Revolving Borrowing, not later than 11:00 a.m., New
York City time, three Business Days before the date of prepayment and (ii) in
the case of prepayment of an ABR Revolving Borrowing, not later than 11:00 a.m.,
New York City time, one Business Day before the date of prepayment. Each such
notice shall be irrevocable and shall specify the prepayment date and the
principal amount of each Borrowing or portion thereof to be prepaid; provided
that, if a notice of prepayment is given in connection with a conditional notice
of termination of the Commitments as contemplated by Section 2.09, then such
notice of prepayment may be revoked if such notice of termination is revoked in
accordance with Section 2.09. Promptly following receipt of any such notice
relating to a Revolving Borrowing, the Administrative Agent shall advise the
Lenders of the contents thereof. Each partial prepayment of any Revolving
Borrowing shall be in an amount that would be permitted in the case of an
advance of a Revolving Borrowing of the same Type as provided in Section 2.02.
Each prepayment of a Revolving Borrowing shall be applied ratably to the Loans
included in the prepaid Borrowing. Prepayments shall be accompanied by accrued
interest to the extent required by Section 2.13.
(c) If at any time from and after the Closing Date: (i) the
Company merges or consolidates with another Person and the Company is not the
surviving entity, (ii) any Person and the Company or a Subsidiary merge into the
Company or a Subsidiary in a transaction in which the Company or a Subsidiary is
the surviving corporation and an Event of Default has occurred as a result
thereof or (iii) property management and leasing services for 20% or more of the
total number of Projects in which the Company has an ownership interest shall at
any time be provided by any Person other than the Company, any of its
consolidated Subsidiaries or the Manager or a Wholly Owned Subsidiary of Manager
(the date of any such event shall occur being the "Prepayment Date"), the
Borrowers shall be required to prepay the Loans in their entirety as if the
Prepayment Date were the Maturity Date and the Commitments thereupon shall be
terminated. The Borrowers shall immediately make such prepayment together with
the interest accrued to the date of the prepayment on the principal amount
prepaid and shall return or cause to be returned all Letters of Credit to the
Issuing Bank. In connection with the prepayment of any Loan prior to the
maturity thereof, the Borrowers shall also pay any applicable expenses pursuant
to Section 2.16. Each such prepayment shall be applied to prepay ratably the
Loans of the Lenders. Amounts prepaid pursuant to this clause (c) (other than
amounts prepaid pursuant to the first sentence of this clause (c)) may not be
reborrowed.
(d) If at any time from and after the Closing Date for any reason
the sum of the total Revolving Credit Exposures plus the aggregate amount of
outstanding Competitive Loans at any time exceeds the Borrowing Base, then the
Borrowers shall prepay a portion of the Loans in the amount of such excess
within three Business Days after such excess first occurs. If the prepayment of
all Loans does not suffice to eliminate such excess, then the Borrowers shall
deposit cash collateral under Section 2.06(j) in the amount of the remaining
excess within such three Business Days.
SECTION 2.12. Fees. (a) During the period from and including the
date hereof to but excluding the date on which such Commitment terminates, the
Borrowers agree to pay to the Administrative Agent for the account of each
Lender (i) in the event that neither Moody's nor S&P has established a rating
which is in effect for the Company or for Index Debt, an unused facility fee
equal to the Unused Facility Fee Rate on the daily amount of the Unused
Commitment of such Lender (the
<PAGE> 43
37
"Unused Facility Fee Amount") or (ii) in the event Moody's or S&P has
established a rating which is in effect for the Company or the Index Debt, a
facility fee equal to the Facility Fee Rate on the full amount of the Commitment
of such Lender (the "Facility Fee Amount"); provided that, if such Lender
continues to have any Revolving Credit Exposure after its Commitment terminates,
then the Facility Fee Amounts pursuant to clause (ii) above shall continue to
accrue on the daily amount of such Lender's Revolving Credit Exposure from and
including the date on which its Commitment terminates to but excluding the date
on which such Lender ceases to have any Revolving Credit Exposure. Accrued
Unused Facility Fee Amounts and Facility Fee Amounts pursuant to clause (i) or
(ii) above, as the case may be, shall be payable in arrears on the last day of
March, June, September and December of each year and on the date on which the
Commitments terminate, commencing on the first such date to occur after the date
hereof; provided that any fees pursuant to clause (i) or (ii) accruing after the
date on which the Commitments terminate shall be payable on demand. All fees
pursuant to clause (i) or (ii) shall be computed on the basis of a year of 360
days and shall be payable for the actual number of days elapsed (including the
first day but excluding the last day).
(b) The Borrowers agree to pay (i) to the Administrative Agent for
the account of each Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the same Applicable
Rate as interest on Eurodollar Revolving Loans on the average daily amount of
such Lender's LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date on which such Lender's
Commitment terminates and the date on which such Lender ceases to have any LC
Exposure, and (ii) to the Issuing Bank a fronting fee, which shall accrue at the
rate of 0.125% per annum on the average daily amount of the LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the Effective Date to but excluding the
later of the date of termination of the Commitments and the date on which there
ceases to be any LC Exposure, as well as the Issuing Bank's standard fees with
respect to the issuance, amendment, renewal or extension of any Letter of Credit
or processing of drawings thereunder. Participation fees and fronting fees
accrued through and including the last day of March, June, September and
December of each year shall be payable on the third Business Day following such
last day, commencing on the first such date to occur after the Effective Date;
provided that all such fees shall be payable on the date on which the
Commitments terminate and any such fees accruing after the date on which the
Commitments terminate shall be payable on demand. Any other fees payable to the
Issuing Bank pursuant to this paragraph shall be payable within 10 days after
demand. All participation fees and fronting fees shall be computed on the basis
of a year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).
(c) The Borrowers agree to pay to the Administrative Agent, for
its own account, fees payable in the amounts and at the times separately agreed
upon between the Company and the Administrative Agent.
(d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent (or to the Issuing
Bank, in the case of fees payable to it) for distribution, in the case of fees
pursuant to paragraph (a) above and participation fees, to the Lenders. Fees
paid shall not be refundable under any circumstances.
SECTION 2.13. Interest. (a) The Loans comprising each ABR
Borrowing shall bear interest at the Alternate Base Rate plus the Applicable
Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear
interest (i) in the case of a Eurodollar Revolving Loan, at the Adjusted LIBO
Rate for the Interest Period in effect for such
<PAGE> 44
38
Borrowing plus the Applicable Rate, or (ii) in the case of a Competitive Loan,
at the LIBO Rate for the Interest Period in effect for such Borrowing plus (or
minus, as applicable) the Margin applicable to such Loan.
(c) Notwithstanding the foregoing, if any principal of or interest
on any Loan or any fee or other amount payable by the Borrowers hereunder is not
paid when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the
rate otherwise applicable to such Loan as provided in the preceding paragraphs
of this Section or (ii) in the case of any other amount, 2% plus the rate
applicable to ABR Loans as provided in paragraph (a) of this Section.
(d) Accrued interest on each Loan shall be payable in arrears on
each Interest Payment Date for such Loan and, in the case of Revolving Loans,
upon termination of the Commitments; provided that (i) interest accrued pursuant
to paragraph (c) of this Section shall be payable on demand, (ii) in the event
of any repayment or prepayment of any Loan (other than a prepayment of an ABR
Revolving Loan prior to the end of the Availability Period), accrued interest on
the principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment and (iii) in the event of any conversion of any
Eurodollar Revolving Loan prior to the end of the current Interest Period
therefor, accrued interest on such Loan shall be payable on the effective date
of such conversion.
(e) All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall
be computed on the basis of a year of 365 days (or 366 days in a leap year), and
in each case shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). The applicable Alternate Base Rate,
Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent,
and such determination shall be conclusive absent manifest error.
SECTION 2.14. Alternate Rate of Interest. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall
be conclusive absent manifest error) that adequate and reasonable means
do not exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate,
as applicable, for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders
(or, in the case of a Eurodollar Competitive Loan, the Lender that is
required to make such Loan) that the Adjusted LIBO Rate or the LIBO
Rate, as applicable, for such Interest Period will not adequately and
fairly reflect the cost to such Lenders (or Lender) of making or
maintaining their Loans (or its Loan) included in such Borrowing for
such Interest Period;
then the Administrative Agent shall give notice thereof to the Company and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Company and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Revolving Borrowing to, or
continuation of any Revolving Borrowing as, a Eurodollar Borrowing shall be
ineffective, (ii) if any Borrowing Request requests a Eurodollar Revolving
Borrowing, such Borrowing shall be made as an ABR Borrowing and (iii) any
request by the Company for a Eurodollar Competitive Borrowing shall be
ineffective; provided that (A) if the circumstances giving rise to such notice
do not affect all the Lenders, then requests by the
<PAGE> 45
39
Company for Eurodollar Competitive Borrowings may be made to Lenders that are
not affected thereby and (B) if the circumstances giving rise to such notice
affect only one Type of Borrowings, then the other Type of Borrowings shall be
permitted.
SECTION 2.15. Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Lender (except any such
reserve requirement reflected in the Adjusted LIBO Rate) or the Issuing
Bank; or
(ii) impose on any Lender or the Issuing Bank or the London
interbank market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or
participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
Borrowers will pay to such Lender or the Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing Bank,
as the case may be, for such additional costs incurred or reduction suffered.
(b) If any Lender or the Issuing Bank determines that any Change
in Law regarding capital requirements has or would have the effect of reducing
the rate of return on such Lender's or the Issuing Bank's capital or on the
capital of such Lender's or the Issuing Bank's holding company, if any, as a
consequence of this Agreement or the Loans made by, or participations in Letters
of Credit held by, such Lender, or the Letters of Credit issued by the Issuing
Bank, to a level below that which such Lender or the Issuing Bank or such
Lender's or the Issuing Bank's holding company could have achieved but for such
Change in Law (taking into consideration such Lender's or the Issuing Bank's
policies and the policies of such Lender's or the Issuing Bank's holding company
with respect to capital adequacy), then from time to time the Borrowers will pay
to such Lender or the Issuing Bank, as the case may be, such additional amount
or amounts as will compensate such Lender or the Issuing Bank or such Lender's
or the Issuing Bank's holding company for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth
the amount or amounts necessary to compensate such Lender or the Issuing Bank or
its holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section shall be delivered to the Company and shall be conclusive absent
manifest error. The Borrowers shall pay such Lender or the Issuing Bank, as the
case may be, the amount shown as due on any such certificate within 10 days
after receipt thereof.
(d) Failure or delay on the part of any Lender or the Issuing Bank
to demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's or the Issuing Bank's right to demand such compensation; provided
that the Borrowers shall not be required to compensate a Lender or the Issuing
Bank pursuant to this Section for any increased costs or reductions incurred
more than 270 days prior to the date that such Lender or the Issuing Bank, as
the case may be, notifies the Company of the Change in Law giving rise to such
increased costs or reductions and of such Lender's or the Issuing Bank's
intention to claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 270-day period referred to above shall be extended to include the period of
retroactive effect thereof.
<PAGE> 46
40
(e) Notwithstanding the foregoing provisions of this Section, a
Lender shall not be entitled to compensation pursuant to this Section in respect
of any Competitive Loan if the Change in Law that would otherwise entitle it to
such compensation shall have been publicly announced prior to submission of the
Competitive Bid pursuant to which such Loan was made.
SECTION 2.16. Break Funding Payments. In the event of (a) the
payment of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Revolving Loan other than on the
last day of the Interest Period applicable thereto, (c) the failure to borrow,
convert, continue or prepay any Revolving Loan on the date specified in any
notice delivered pursuant hereto (regardless of whether such notice may be
revoked under Section 2.11(b) and is revoked in accordance therewith), (d) the
failure to borrow any Competitive Loan after accepting the Competitive Bid to
make such Loan, or (e) the assignment of any Eurodollar Loan other than on the
last day of the Interest Period applicable thereto as a result of a request by
the Company pursuant to Section 2.19, then, in any such event, the Borrowers
shall compensate each Lender for the loss, cost and expense attributable to such
event. In the case of a Eurodollar Loan, such loss, cost or expense to any
Lender shall be deemed to include an amount determined by such Lender to be the
excess, if any, of (i) the amount of interest which would have accrued on the
principal amount of such Loan had such event not occurred, at the Adjusted LIBO
Rate that would have been applicable to such Loan, for the period from the date
of such event to the last day of the then current Interest Period therefor (or,
in the case of a failure to borrow, convert or continue, for the period that
would have been the Interest Period for such Loan), over (ii) the amount of
interest which would accrue on such principal amount for such period at the
interest rate which such Lender would bid were it to bid, at the commencement of
such period, for dollar deposits of a comparable amount and period from other
banks in the eurodollar market. A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this
Section shall be delivered to the Administrative Agent and shall be conclusive
absent manifest error. The Borrowers shall pay such Lender the amount shown as
due on any such certificate within 10 days after receipt thereof.
SECTION 2.17. Taxes. (a) Any and all payments by or on account of
any obligation of the Borrowers hereunder shall be made free and clear of and
without deduction for any Indemnified Taxes or Other Taxes; provided that if the
Borrowers shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent, each
Lender or the Issuing Bank (as the case may be) receives an amount equal to the
sum it would have received had no such deductions been made, (ii) the Borrowers
shall make such deductions and (iii) the Borrowers shall pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable
law.
(b) In addition, the Borrowers shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrowers shall indemnify the Administrative Agent, each
Lender and the Issuing Bank, within 10 days after written demand therefor, for
the full amount of any Indemnified Taxes or Other Taxes paid by the
Administrative Agent, such Lender or the Issuing Bank, as the case may be, on or
with respect to any payment by or on account of any obligation of the Borrowers
hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) and any penalties, interest
and reasonable expenses arising therefrom or with respect thereto, whether or
not such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or
<PAGE> 47
41
liability delivered to the Borrowers by a Lender or the Issuing Bank, or by the
Administrative Agent on its own behalf or on behalf of a Lender or the Issuing
Bank, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes
or Other Taxes by the Borrowers to a Governmental Authority, the Borrowers shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) As a condition to becoming a Lender hereunder, any Foreign
Lender (including any assignee), that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which any of
the Borrowers is located, or any treaty to which such jurisdiction is a party,
with respect to payments under this Agreement shall deliver to the Company (with
a copy to the Administrative Agent), at the time or times prescribed by
applicable law, such properly completed and executed documentation prescribed by
applicable law or reasonably requested by the Company as will permit such
payments to be made without withholding or at a reduced rate.
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of
Set-offs. (a) The Borrowers shall make each payment required to be made by them
hereunder (whether of principal, interest, fees or reimbursement of LC
Disbursements, or of amounts payable under Section 2.15, 2.16 or 2.17, or
otherwise) prior to 12:00 noon, New York City time, on the date when due, in
immediately available funds, without set-off or counterclaim. Any amounts
received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at 380 Madison Avenue,
New York, New York, except payments to be made directly to the Issuing Bank as
expressly provided herein and except that payments pursuant to Sections 2.15,
2.16, 2.17 and 9.03 shall be made directly to the Persons entitled thereto. The
Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest
thereon shall be payable for the period of such extension. All payments
hereunder shall be made in dollars.
(b) If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal,
unreimbursed LC Disbursements, interest and fees then due hereunder, such funds
shall be applied (i) first, towards payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (ii) second, towards
payment of principal and unreimbursed LC Disbursements then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
principal and unreimbursed LC Disbursements then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, except pursuant to Section 2.19, obtain payment in
respect of any principal of or interest on any of its Revolving Loans or
participations in LC Disbursements resulting in such Lender receiving payment of
a greater proportion of the aggregate amount of its Revolving Loans and
participations in LC Disbursements than the proportion received by any other
Lender, then the Lender receiving such greater proportion shall purchase (for
cash at face value) participations in the Revolving Loans and participations in
LC Disbursements of other Lenders to the extent necessary so that the benefit of
all such payments shall be shared by the Lenders ratably in accordance with the
aggregate amount of principal of and accrued interest on their respective
Revolving Loans and participations in LC Disbursements;
<PAGE> 48
42
provided that (i) if any such participations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations
shall be rescinded and the purchase price restored to the extent of such
recovery, without interest, and (ii) the provisions of this paragraph shall not
be construed to apply to any payment made by the Borrowers pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by a
Lender as consideration for the assignment of or sale of a participation in any
of its Loans or participations in LC Disbursements to any assignee or
participant, other than to the Borrowers or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). The Borrowers
consent to the foregoing and agree, to the extent they may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against the Borrowers rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrowers in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice
from the Company prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or the Issuing Bank
hereunder that the Borrowers will not make such payment, the Administrative
Agent may assume that the Borrowers have made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute to the
Lenders or the Issuing Bank, as the case may be, the amount due. In such event,
if the Borrowers have not in fact made such payment, then each of the Lenders or
the Issuing Bank, as the case may be, severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender or Issuing Bank with interest thereon, for each day from and including
the date such amount is distributed to it to but excluding the date of payment
to the Administrative Agent, at the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to be
made by it pursuant to Section 2.05(c), 2.06(d) or (e), 2.07(b) or 2.18(d), then
the Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative
Agent for the account of such Lender to satisfy such Lender's obligations under
such Sections until all such unsatisfied obligations are fully paid.
SECTION 2.19. Mitigation Obligations; Replacement of Lenders. (a)
If any Lender requests compensation under Section 2.15, or if the Borrowers are
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.17, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.15 or 2.17, as the case may be, in the
future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrowers
hereby agree to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
(b) If any Lender requests compensation under Section 2.15, or if
the Borrowers are required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrowers may, at their sole expense and effort, upon notice to such Lender and
the Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement
(other than any outstanding Competitive Loans held by it) to an assignee that
shall assume
<PAGE> 49
43
such obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (i) the Borrowers shall have received the prior
written consent of the Administrative Agent (and, if a Commitment is being
assigned, the Issuing Bank), which consent shall not unreasonably be withheld,
(ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans (other than Competitive Loans) and
participations in LC Disbursements, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder, from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or the Borrowers (in
the case of all other amounts) and (iii) in the case of any such assignment
resulting from a claim for compensation under Section 2.15 or payments required
to be made pursuant to Section 2.17, such assignment will result in a reduction
in such compensation or payments. A Lender shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrowers to require
such assignment and delegation cease to apply.
ARTICLE III
Representations and Warranties
The Company and each Borrower jointly and severally represent and
warrant to the Lenders that:
SECTION 3.01. Organization; Powers. Each of the Company and its
Affiliates is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required. Neither the Company nor any of its Affiliates is a "foreign person"
within the meaning of Section 1445 of the Code.
SECTION 3.02. Authorization; Enforceability. (a) The Transactions
have been duly authorized by all necessary limited liability company action of
the Company and by all necessary partnership action of the Subsidiary
Partnerships. The Manager is the Person who executed this Agreement and the
other Loan Documents on behalf of the Company and the Manager is the sole Person
to whom the right to manage the Company has been delegated by the board of
directors of the Company and the Manager has the requisite power and authority
to execute and deliver, on behalf of the Company, this Agreement and the other
Loan Documents; and the Company has the requisite power and authority to perform
this Agreement and the other Loan Documents. This Agreement has been duly
authorized, executed and delivered by the Company and constitutes a legal, valid
and binding obligation of the Company, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law. The admission of the Administrative Agent as a limited partner of
each of the Subsidiary Partnerships upon the foreclosure of the pledge provided
for in the Pledge Agreement with respect to the limited partnership interests of
each Subsidiary Partnership has been duly authorized pursuant to each of the
Recognition Agreements and upon the foreclosure by the Administrative Agent of
such pledge with respect to the limited partnership interests of any Subsidiary
Partnership, the Administrative Agent or its designee will, without further
action (other than notice to such Subsidiary Partnership by the Administrative
Agent), constitute a duly admitted limited partner of such Subsidiary
Partnership.
<PAGE> 50
44
(b) Schedule 3.02 contains a diagram indicating the ownership
structure of the Company, and any other Person in which the Company holds a
direct or indirect partnership, joint venture or other equity interest,
indicating the nature of such interest with respect to each Person included in
such diagram and accurately sets forth (1) the correct legal name of such
Person, the jurisdiction of its incorporation or organization and the
jurisdictions in which it is qualified to transact business as a foreign
corporation, or otherwise, and (2) the authorized, issued and outstanding shares
or interests of each class of securities of the Company. None of such issued and
outstanding securities is subject to any vesting, redemption, or repurchase
agreement, and there are no warrants or options outstanding with respect to such
securities, except as noted on such Schedule. The outstanding capital stock of
the Company is duly authorized, validly issued, fully paid and nonassessable.
(c) The Consolidation has been consummated. Fewer than 5% of the
limited partnership units in each Predecessor Partnership were exchanged for
limited partnership units in the Subsidiary Partnerships. The Company's limited
partnership interest in each of the Subsidiary Partnerships is set forth on
Schedule 3.02(A).
SECTION 3.03. Governmental Approvals; No Conflicts. Except as
specified on Schedule 3.03, the Transactions (a) do not require any consent or
approval of, registration or filing with, or any other action by, any
Governmental Authority, except such as have been obtained or made and are in
full force and effect, (b) will not violate, and will not require any consent or
approval under, any applicable law or regulation or the certificate of
formation, limited liability company agreement, certificate of limited
partnership, limited partnership agreement or other organizational documents of
the Company or any of its Subsidiaries or any order of any Governmental
Authority, (c) will not violate or result in a default under any indenture,
agreement or other instrument binding upon any of the Company or any of its
Subsidiaries or its assets, or give rise to a right thereunder to require any
payment to be made by the Company or any of its Subsidiaries, and (d) will not
result in the creation or imposition of any Lien (except in favor of the
Administrative Agent, for the benefit of the Secured Parties) on any asset of
the Company or any of its Subsidiaries.
SECTION 3.04. Financial Condition; No Material Adverse Change. (a)
The Company has heretofore furnished to the Lenders (i) its audited balance
sheet as of August 31, 1997, reported on by Coopers & Lybrand L.L.P.,
independent public accountants, (ii) its pro forma unaudited balance sheets and
statements of income as of June 30, 1997 (giving effect to the Consolidation),
certified by its chief financial officer; and (iii) its pro forma unaudited
statements of income for the year ended December 31, 1996 (giving effect to the
Consolidation), certified by its chief financial officer. Such financial
statements present fairly, in all material respects, the financial position and
results of operations of the Company and its consolidated Subsidiaries as of
such dates and for such periods in accordance with GAAP, subject to (y) to
normal and recurring year-end audit adjustments and the absence of footnotes in
the case of the statements referred to in clause (ii) above and (z) any pro
forma financial statements contained in such consolidated financial statements
are not necessarily indicative of the consolidated financial position of the
Company and its Subsidiaries, as of the respective dates thereof and the
consolidated results of operations for the periods indicated.
(b) The Company has heretofore furnished to the Lenders (i) the
annual audited combined financial statements of the Predecessor Partnerships for
the fiscal year ended December 31, 1996, reported on by Coopers & Lybrand
L.L.P., independent public accountants, and (ii) unaudited combined financial
statements of the Predecessor Partnerships for the period ended September 30,
1997, certified by its chief financial officer. Such financial statements
present fairly, in all material respects, the financial position, results of
operations, cash flows and partners capital of the Predecessor Partnerships on a
combined basis, as of such dates and for such periods in accordance with GAAP,
<PAGE> 51
45
subject to normal, recurring, year-end audit adjustments and the absence of
footnotes in the case of the statements referred to in clause (ii) above.
(c) Neither the Company nor any of its Subsidiaries has any
Contingent Obligation or liability for any taxes, long-term leases or
commitments, not reflected in its audited financial statements delivered to the
Administrative Agent on or prior to the Closing Date or otherwise disclosed to
the Administrative Agent and the Lenders in writing, which will have or is
reasonably likely to have a Material Adverse Effect.
(d) Schedule 3.04 sets forth, as of the date hereof, all
Indebtedness of the Company and its Subsidiaries and, except as set forth on
Schedule 3.04, there are no defaults in the payment of principal or interest on
any such Indebtedness and no payments thereunder have been deferred or extended
beyond their stated maturity and there has been no material change in the type
or amount of such Indebtedness.
(e) Since September 30, 1997, there has been no material adverse
change in the business, assets, operations, prospects or condition, financial or
otherwise, of the Company and its Subsidiaries, taken as a whole.
SECTION 3.05. Properties. (a) Each of the Company and its
Subsidiaries has good title to, or valid leasehold interests in, all its real
and personal property material to its business, except for minor defects in
title that do not interfere with its ability to conduct its business as
currently conducted or to utilize such properties for their intended purposes.
(b) Each of the Company and its Subsidiaries owns, or is licensed
to use, all trademarks, tradenames, copyrights, patents and other intellectual
property material to its business, and the use thereof by the Company and its
Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 3.06. Litigation and Environmental Matters. (a) There are
no actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Company, threatened
against or affecting the Company or any of its Subsidiaries (i) as to which
there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other than the Disclosed
Matters) or (ii) that involve this Agreement or the Transactions.
(b) Except for the Disclosed Matters and except with respect to
any other matters that, individually or in the aggregate, could not reasonably
be expected to result in a Material Adverse Effect, neither the Company nor any
of its Subsidiaries (i) has failed to comply with any Environmental Law or to
obtain, maintain or comply with any permit, license or other approval required
under any Environmental Law, (ii) has become subject to any Environmental
Liability, (iii) has received notice of any claim with respect to any
Environmental Liability or (iv) knows of any basis for any Environmental
Liability.
(c) Since the date of this Agreement, there has been no change in
the status of the Disclosed Matters that, individually or in the aggregate, has
resulted in, or materially increased the likelihood of, a Material Adverse
Effect.
<PAGE> 52
46
SECTION 3.07. Compliance with Laws and Agreements. Each of the
Company, and its Subsidiaries is in compliance with all laws, regulations and
orders of any Governmental Authority applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. No Default has
occurred and is continuing.
SECTION 3.08. Investment and Holding Company Status. Neither the
Company nor any of its Subsidiaries is (a) an "investment company" as defined
in, or subject to regulation under, the Investment Company Act of 1940 or (b) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.
SECTION 3.09. Taxes. Each of the Company and its Subsidiaries has
timely filed or caused to be filed all Tax returns and reports required to have
been filed and has paid or caused to be paid all Taxes required to have been
paid by it, except (a) Taxes that are being contested in good faith by
appropriate proceedings and for which the Company or such Subsidiary, as
applicable, has set aside on its books adequate reserves with respect thereto in
accordance with GAAP or (b) to the extent that the failure to do so could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed by more
than $250,000 the fair market value of the assets of such Plan, and the present
value of all accumulated benefit obligations of all underfunded Plans (based on
the assumptions used for purposes of Statement of Financial Accounting Standards
No. 87) did not, as of the date of the most recent financial statements
reflecting such amounts, exceed by more than $250,000 the fair market value of
the assets of all such underfunded Plans.
SECTION 3.11. Disclosure. The Company has disclosed to the Lenders
all agreements, instruments and corporate or other restrictions to which it or
any of its Subsidiaries is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. None of the SEC Reports (as defined hereafter) and none
of the reports, financial statements, certificates or other information
furnished by or on behalf of the Company and the Subsidiaries to the
Administrative Agent or any Lender in connection with the negotiation of this
Agreement or delivered hereunder (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary, in the aggregate, to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided that, with respect to projected financial information, the
Company represents only that such information was prepared in good faith based
upon assumptions believed to be reasonable at the time.
SECTION 3.12. Insurance. Schedule 3.12 accurately sets forth all
insurance policies and programs in effect as of the Closing Date and thereafter
as of the most recently completed fiscal quarter with respect to the Property,
assets and business of the Company and its Subsidiaries, specifying for each
such policy and program, (i) the amount thereof, (ii) the risks insured against
thereby, (iii) the name of the insurer and each insured party thereunder, (iv)
the policy or other identification number thereof, and (v) the expiration date
thereof. Such insurance policies and programs are currently in full force and
effect, and, together with payment by the insured of scheduled deductible
payments, are in
<PAGE> 53
47
amounts sufficient to cover the replacement value of the respective improvements
at the Projects of the Company and/or its Subsidiaries.
SECTION 3.13. Leases. Except as set forth on Schedule 3.13, each
Lease pursuant to which the Company or any of its Subsidiaries or Joint Ventures
is lessor of a Property (the "Company Leases") constitutes a Triple Net Lease.
Except as set forth on Schedule 3.13, all Company Leases are in full force and
effect and no party to any of such Company Leases is in default of any payment
obligation thereunder or in default thereunder in any other material respect.
SECTION 3.14. SEC Reports. Since September 30, 1997, the Company
and each Predecessor Partnership has filed all forms, reports, statements
(including proxy statements) and other documents (such filings by the Company
are collectively referred to as the "SEC Reports"), required to be filed by it
with the Securities and Exchange Commission. The SEC Reports, including all SEC
Reports filed after the date of this Agreement and prior to the Effective Date,
(i) were or will be prepared in all material respects in accordance with the
requirements of the Securities Act of 1933, as amended, and the Securities
Exchange Act of 1934, as amended, as the case may be, and the rules and
regulations of the Securities Exchange Commission thereunder applicable to such
SEC Reports at the time of filing thereof and (ii) did not at the time they were
filed, or will not at the time they are filed, contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
SECTION 3.15. Lien under Pledge Agreement. The Pledge Agreement,
upon execution and delivery by the parties thereto, creates in favor of the
Administrative Agent, for the ratable benefit of the Secured Parties, a legal,
valid and enforceable first priority continuing security interest in the
Collateral and (i) with respect to the portion of the Collateral, if any,
constituting uncertificated securities, upon the due execution and delivery of
each of the Recognition Agreements by each of the parties thereto; and (ii) with
respect to the portion of the Collateral constituting certificated securities,
when certificates representing such securities, together with undated
instruments of transfer duly executed in blank shall have been delivered to the
Administrative Agent; and (iii) with respect to the portion of the Collateral
constituting "accounts" or "general intangibles" (as defined in Section 9-106 of
the Uniform Commercial Code), upon filing of appropriate Uniform Commercial Code
financing statements with the offices(s) specified in Schedule IV to the Pledge
Agreement, each such lien will constitute a fully perfected first priority lien
on and security interest in such Collateral, in each case prior and superior in
right to that of any other Person. Each lien referred to in this Section 3.15 is
and shall be the sole and exclusive lien on the Collateral subject thereto. The
Borrowers shall not grant or create (and shall not suffer any other Person to
grant or create) any other Lien on any Collateral, whether junior, equal or
superior in priority to the liens created by the Loan Documents.
SECTION 3.16. Representations and Warranties in Loan Documents.
All representations and warranties made by the Company and each other Borrower
in the Loan Documents are true and correct in all material respects as of the
date of this Agreement and as of any date that the Borrowers are expressly
obligated to confirm the same under this Agreement.
SECTION 3.17. Organizational Documents. The documents delivered
pursuant to Section 4.01 constitute, as of the Effective Date, true and correct
copies of all of the organizational documents of the Company and the Subsidiary
Partnerships.
<PAGE> 54
48
ARTICLE IV
Conditions
SECTION 4.01. Effective Date. The obligations of the Lenders to
make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall
not become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 9.02):
(a) The Administrative Agent (or its counsel) shall have received
from each party hereto either (i) a counterpart of this Agreement and
all other Loan Documents to which it is a party, signed on behalf of
such party or (ii) written evidence satisfactory to the Administrative
Agent (which may include telecopy transmission of a signed signature
page of each such Loan Document) that such party has signed a
counterpart of this Agreement and all other Loan Documents required to
be delivered by the Administrative Agent.
(b) The Administrative Agent shall have received (i) a favorable
written opinion (addressed to the Administrative Agent and the Lenders
and dated the Effective Date) of Reed Smith Shaw & McClay LLP, counsel
for the Company, and (ii) a favorable written opinion (addressed to the
Administrative Agent and the Lenders and dated the Effective Date) of
Arter & Hadden, special counsel to the Company), substantially in the
form of EXHIBIT G-1 AND EXHIBIT G-2, RESPECTIVELY, and covering such
other matters relating to the Company, this Agreement or the
Transactions as the Required Lenders shall reasonably request. The
Company hereby requests such counsel to deliver such opinions.
(c) The Administrative Agent shall have received such documents
and certificates as the Administrative Agent or its counsel may
reasonably request relating to the organization, existence and good
standing of the Company and its Affiliates, the authorization of the
Transactions and any other legal matters relating to the Company and
its Affiliates, this Agreement or the Transactions, all in form and
substance satisfactory to the Administrative Agent and its counsel.
(d) The Administrative Agent shall have received a certificate,
dated the Effective Date and signed by the President, a Vice President
or a Financial Officer of the Company, confirming compliance with the
conditions set forth in paragraphs (a) and (b) of Section 4.02.
(e) No change in the business, assets, management, operations,
financial condition or prospects of the Company or any of its
Properties shall have occurred since December 31, 1997 which change, in
the judgment of the Administrative Agent, will have or is reasonably
likely to have a Material Adverse Effect.
(f) Except as disclosed on Schedule 4.01(f), since December 31,
1997, the Company has not and shall not have (i) entered into any (as
determined in good faith by the Administrative Agent) commitment or
transaction, including, without limitation, transactions for borrowings
and capital expenditures, which are not in the ordinary course of the
Company's business, (ii) declared or paid any dividends or other
distributions, (iii) established compensation or employee benefit
plans, or (iv) redeemed or issued any equity Securities.
(g) Since December 31, 1997, no agreement or license relating to
the business, operations or employee relations of the Company or any of
its Properties shall have been terminated, modified, revoked, breached
or declared to be in default, the termination, modification,
<PAGE> 55
49
revocation, breach or default under which, in the reasonable judgment
of the Administrative Agent, would result in a Material Adverse Effect.
(h) The Administrative Agent shall have received evidence
satisfactory to it in its sole discretion that the waivers or consents
specified in Schedule 3.03 have been duly obtained.
(i) The Administrative Agent shall have received all fees and
other amounts due and payable on or prior to the Effective Date,
including, to the extent invoiced, reimbursement or payment of all
out-of-pocket expenses required to be reimbursed or paid by the
Borrowers hereunder.
(j) The Administrative Agent shall have received a completed
Borrowing Base Certificate duly executed by the President, a Vice
President or a Financial Officer of the Company.
(k) The Liens granted to the Administrative Agent for the benefit
of the Secured Parties pursuant to the Pledge Agreement shall have been
perfected in a manner satisfactory to each Lender and the
Administrative Agent shall have received all necessary uniform
commercial code financing statements and all certificates representing
any shares of capital stock, limited liability company interests or
partnership interests, notes or other debt or equity securities pledged
to the Administrative Agent under the Pledge Agreement, in each case
accompanied by undated stock powers or other instruments of transfer
satisfactory to the Administrative Agent duly endorsed in blank.
(l) The Listed Shares shall be listed for trading on the New York
Stock Exchange, Inc.
(m) The parties to each of the Recognition Agreements shall have
duly executed and delivered the Recognition Agreements to the
Administrative Agent.
The Administrative Agent shall notify the Borrower and the Lenders
of the Effective Date, and such notice shall be conclusive and binding.
SECTION 4.02. Each Credit Event. The obligation of each Lender to
make a Loan on the occasion of any Borrowing, and of the Issuing Bank to issue,
amend, renew or extend any Letter of Credit (such Borrowing, issuance,
amendment, renewal or extension referred to herein as a "Credit Event"), is
subject to the satisfaction of the following conditions:
(a) The representations and warranties set forth in this Agreement
and the other Loan Documents shall be true and correct on and as of the
date of such Borrowing or the date of issuance, amendment, renewal or
extension of such Letter of Credit, as applicable.
(b) At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such
Letter of Credit, as applicable, no Default shall have occurred and be
continuing.
(c) The Borrowers shall not have received written notice from the
Required Lenders that an event has occurred since the date of this
Agreement which has had, and continues to have, or is reasonable likely
to have, a Material Adverse Effect.
<PAGE> 56
50
(d) At least ten Business Days (or such lesser period as may be
acceptable to the Administrative Agent in its sole discretion in any
instance) prior to such Credit Event, the Company shall have provided
the Administrative Agent with all information necessary to confirm
compliance with the Borrowing Base criteria applicable to such Credit
Event, including a pro forma Borrowing Base Certificate showing that
all Borrowing Base requirements will be complied with after giving
effect to such Credit Event.
(e) The Administrative Agent shall have received a completed pro
forma Borrowing Base Certificate duly executed by the President, a Vice
President or a Financial Officer of the Company giving effect to such
Credit Event.
Each Borrowing and each issuance, amendment, renewal or extension
of a Letter of Credit shall be deemed to constitute a representation and
warranty by the Borrowers on the date thereof as to the matters specified in
paragraphs (a) and (b) of this Section.
ARTICLE V
Affirmative Covenants
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full and all Letters of Credit shall have expired or terminated and
all LC Disbursements shall have been reimbursed, the Company and Borrower
covenant and agree with the Lenders that:
SECTION 5.01. Financial Statements and Other Information. The
Company will furnish to the Administrative Agent and each Lender:
(a) Quarterly Reports.
(i) Company Quarterly Financial Reports. As soon as practicable,
and in any event within forty-five (45) days after the end of each fiscal
quarter in each fiscal year (other than the last fiscal quarter in each fiscal
year), the Financial Statements of the Company and its subsidiaries on Form 10-Q
as at the end of such period and a report setting forth in comparative form the
corresponding figures for the corresponding period of the previous fiscal year,
certified by a Financial Officer of the Company as fairly presenting the
consolidated and, for so long as such statements are prepared in the ordinary
course of business, consolidating, financial position of the Company and its
Subsidiaries as at the date indicated and the results of their operations and
cash flow for the period indicated in accordance with GAAP, subject to normal
quarterly adjustments.
(ii) Quarterly Compliance Certificates. Together with each
delivery of any quarterly report pursuant to paragraph (a)(i) of this Section
5.01, an Officer's Certificate of the Company (the "Quarterly Compliance
Certificates"), signed by a Financial Officer of the Company representing and
certifying (1) that the Financial Officer of the Company signatory thereto has
reviewed the terms of the Loan Documents, and has made, or caused to be made
under his/her supervision, a review in reasonable detail of the transactions and
consolidated and, for so long as such statements are prepared in the ordinary
course of business, consolidated, and consolidating financial condition of the
Company and its Subsidiaries, during the fiscal quarter covered by such reports,
that such review has not disclosed the existence during or at the end of such
fiscal quarter, and that such officer does not have knowledge of the existence
as at the date of such Officer's Certificate, of any condition or event which
constitutes a
<PAGE> 57
51
Default or mandatory prepayment event, or, if any such condition or event
existed or exists, specifying the nature and period of existence thereof and
what action the Company or any of its Subsidiaries has taken, is taking and
proposes to take with respect thereto; (2) the calculations (with such
specificity as the Administrative Agent may reasonably request) for the period
then ended which demonstrate compliance with the covenants and financial ratios
set forth in Article VI and, when applicable, that no Event of Default described
in Section 7.01 exists, (3) a schedule of the Company's outstanding
Indebtedness, including the amount, maturity, interest rate and amortization
requirements, as well as such other information regarding such Indebtedness as
may be reasonably requested by the Administrative Agent, (4) a schedule of Total
Adjusted EBITDA, (5) a schedule of Adjusted Unencumbered NOI, and (6)
calculations, in the form of EXHIBIT I attached hereto, evidencing compliance
with each of the financial covenants set forth in Article VI.
(iii) Quarterly Borrowing Base Certificate. As soon as available
and in any event within 30 days after the end of each fiscal quarter of the
Company, a completed Borrowing Base Certificate executed by a Financial Officer
of the Company or of the Manager on behalf of the Company, as of the last day of
such quarter.
(b) Annual Reports.
(i) Company Financial Statements. As soon as practicable, and in
any event within ninety (90) days after the end of each fiscal year, (i) the
Financial Statements of the Company and its Subsidiaries on Form 10-K as at the
end of such fiscal year and a report setting forth in comparative form the
corresponding figures from the consolidated Financial Statements of the Company
and its Subsidiaries for the prior fiscal year; (ii) a report with respect
thereto of Coopers & Lybrand L.L.P. or other independent certified public
accountants acceptable to the Administrative Agent, which report shall be
unqualified and shall state that such financial statements fairly present the
consolidated and, for so long as such statements are prepared in the ordinary
course of business, consolidating financial position of each of the Company and
its Subsidiaries as at the dates indicated and the results of their operations
and cash flow for the periods indicated in conformity with GAAP applied on a
basis consistent with prior years (except for changes with which Coopers &
Lybrand L.L.P. or any such other independent certified public accountants, if
applicable, shall concur and which shall have been disclosed in the notes to
such financial statements) (which report shall be subject to the confidentiality
limitations set forth herein); and (iii) in the event that the report referred
to in clause (ii) above is qualified, a copy of the management letter or any
similar report delivered to the Company or to any officer or employee thereof by
such independent certified public accountants in connection with such financial
statements. The Administrative Agent and each Lender (through the Administrative
Agent) may, with the consent of the Company (which consent shall not be
unreasonably withheld), communicate directly with such accountants, with any
such communication to occur together with a representative of the Company, at
the expense of the Administrative Agent (or the Lender requesting such
communication), upon reasonable notice and at reasonable times during normal
business hours.
(ii) Annual Compliance Certificates. Together with each delivery
of any annual report pursuant to clause (i) of this Section 5.01(b), Officer's
Certificates of the Company (the "Annual Compliance Certificate" and,
collectively with the Quarterly Compliance Certificate, the "Compliance
Certificates"), signed by the Company's Financial Officer, representing and
certifying (1) that the officer signatory thereto has reviewed the terms of the
Loan Documents, and has made, or caused to be made under his/her supervision, a
review in reasonable detail of the transactions and consolidated and, for so
long as such statements are prepared in the ordinary course of business,
consolidating financial condition of the Company and its Subsidiaries, during
the accounting period covered by such reports, that such review has not
disclosed the existence during or at the end of such accounting period, and that
such
<PAGE> 58
52
officer does not have knowledge of the existence as at the date of such
Officer's Certificate, of any condition or event which constitutes a Default or
mandatory prepayment event, or, if any such condition or event existed or
exists, specifying the nature and period of existence thereof and what action
the Company or any of its Subsidiaries has taken, is taking and proposes to take
with respect thereto; (2) the calculations (with such specificity as the
Administrative Agent may reasonably request) for the period then ended which
demonstrate compliance with the covenants and financial ratios set forth in
Article VI and, when applicable, that no Event of Default described in Section
7.01 exists, (3) a schedule of the Company's outstanding Indebtedness including
the amount, maturity, interest rate and amortization requirements, as well as
such other information regarding such Indebtedness as may be reasonably
requested by the Administrative Agent, (4) a schedule of Total Adjusted EBITDA,
(5) a schedule of Adjusted Unencumbered NOI, and (6) calculations, in the form
of EXHIBIT H attached hereto, evidencing compliance with each of the financial
covenants set forth in Article VI hereof.
(c) Tenant Bankruptcy Reports. As soon as practicable, and in
any event within ninety (90) days after the end of each fiscal year, a written
report, in form reasonably satisfactory to the Administrative Agent, of all
bankruptcy proceedings filed by or against any tenant of any of the Projects,
which tenant occupies two percent (2%) or more of the gross leasable area in the
Projects in the aggregate. The Company shall deliver to the Administrative Agent
and the Lenders, promptly upon the Company's learning thereof, notice of any
bankruptcy proceedings filed by or against, or the cessation of business or
operations of, any tenant of any of the Projects which tenant occupies two
percent (2%) or more of the gross leasable area in the Projects in the
aggregate.
(d) Concurrently with any delivery of financial statements
under clause (b) above, a certificate of the accounting firm that reported on
such financial statements stating whether they obtained knowledge during the
course of their examination of such financial statements of any Default (which
certificate may be limited to the extent required by accounting rules or
guidelines).
(e) Promptly following any request therefor, such other
information regarding the operations, business affairs and financial condition
of the Company or any Subsidiary, or compliance with the terms of this
Agreement, as the Administrative Agent or any Lender may reasonably request.
(f) Within 45 days after the end of each fiscal quarter of the
Company, a reasonably detailed description of each acquisition of any Real
Property by the Consolidated Businesses or any Joint Venture made during such
preceding calendar quarter; all certified by a Financial Officer.
SECTION 5.02. Notices of Material Events. (a) The Company will
furnish to the Administrative Agent and each Lender prompt written notice of the
following:
(i) the occurrence of any Default;
(ii) the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority
against or affecting the Company or any Affiliate thereof that, if
adversely determined, could reasonably be expected to result in a
Material Adverse Effect;
(iii) the occurrence of any ERISA Event that, alone or together
with any other ERISA Events that have occurred, could reasonably be
expected to result in liability of the Company and its Subsidiaries in
an aggregate amount exceeding $250,000; and
<PAGE> 59
53
(iv) any other development that results in, or could reasonably
be expected to result in, a Material Adverse Effect.
(b) The Company shall deliver to the Administrative Agent and
the Lenders written notice of each of the following not less than fifteen (15)
Business Days prior to the occurrence thereof: (a) a sale, transfer or other
disposition of assets, in a single transaction or series of related
transactions, for consideration in excess of $30,000,000, (b) an acquisition of
assets, in a single transaction or series of related transactions, for
consideration in excess of $30,000,000, and (c) the grant of a Lien with respect
to assets, in a single transaction or series of related transactions, in
connection with Indebtedness aggregating an amount in excess of $30,000,000. In
addition, simultaneously with delivery of any such notice, the Company shall
deliver to the Administrative Agent a certificate of an Authorized Officer
certifying that the Company is in compliance with this Agreement and the other
Loan Documents both on a historical basis and on a pro forma basis, exclusive of
the property sold, transferred and/or encumbered and inclusive of the property
to be acquired or the indebtedness to be incurred. To the extent such proposed
transaction would result in a failure to comply with the financial covenants set
forth herein, proceeds of such transaction (together with such additional
amounts as may be required), in an amount, as determined by the Administrative
Agent, equal to that which would be required to reduce the Obligations so that
Company will be in compliance with the covenants set forth herein upon the
consummation of the contemplated transaction, shall be applied to prepay the
Obligations.
(c) The Company shall promptly notify the Administrative Agent
upon obtaining knowledge of the bankruptcy or cessation of operations of any
tenant to which greater than two percent (2%) of the Company's share of
consolidated minimum rent is attributable.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Company setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
SECTION 5.03. Existence; Conduct of Business. The Company will,
and will cause each of its Subsidiaries to, do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises material
to the conduct of its business.
SECTION 5.04. Payment of Obligations. The Company will, and will
cause each of its Subsidiaries to, pay its obligations, including Tax
liabilities, that, if not paid, could result in a Material Adverse Effect before
the same shall become delinquent or in default, except where (a) the validity or
amount thereof is being contested in good faith by appropriate proceedings, (b)
the Company or such Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP and (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.
SECTION 5.05. Maintenance of Properties; Insurance. The Company
will, and will cause each of its Subsidiaries to, (a) keep and maintain (or
cause to be kept and maintained) all property material to the conduct of its
business in good working order and condition, ordinary wear and tear excepted,
and (b) maintain (or cause to be maintained), with financially sound and
reputable insurance companies, insurance in such amounts and for coverage of
general liability and property casualty or a "blanket" or umbrella policy or
substantially similar policies and programs as are acceptable to the
Administrative Agent.
<PAGE> 60
54
SECTION 5.06. Books and Records; Inspection Rights. The Company
will, and will cause each of its Subsidiaries to, keep proper books of record
and account in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities. The Company will, and
will cause each of its Subsidiaries to, permit any representatives designated by
the Administrative Agent or any Lender, upon reasonable prior notice, to visit
and inspect its properties, to examine and make extracts from its books and
records, and to discuss its affairs, finances and condition with its officers
and independent accountants, all at such reasonable times and as often as
reasonably requested.
SECTION 5.07. Compliance with Laws. The Company will, and will
cause each of its Subsidiaries to, comply with all laws, rules, regulations and
orders of any Governmental Authority applicable to it or its property, except
where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 5.08. Use of Proceeds and Letters of Credit. No Letters of
Credit and no part of the proceeds of any Loan will be used, whether directly or
indirectly, for any purpose that entails a violation of any of the Regulations
of the Board, including Regulations G, U and X. The proceeds of the Loans will
be used only for the purposes of:
(a) acquisition of Projects or Joint Venture Holdings,
(b) renovation of Properties owned by the Company or its
consolidated Subsidiaries;
(c) funding of TI Work and Tenant Allowances;
(d) financing expansions, renovations and new construction related
to Properties owned by the Company or its consolidated Subsidiaries;
(e) refinancing or repayment of existing or future Indebtedness
for borrowed money;
(f) working capital needs of the Company, provided, however, that
in no event, shall more than $20,000,000 be advanced for working capital (it
being understood that the use of Loan proceeds specified in paragraph (e) above
shall not constitute an advance for working capital).
(g) investments in Mortgage Assets; and
(h) redemptions or purchases (x) by the Company of Listed Shares
or (y) by the Company or any Subsidiary Partnership of Subsidiary Partnership
Interests.
SECTION 5.09. Company Status. The Company shall at all times (i)
remain a publicly traded company with securities listed on the New York Stock
Exchange; (ii) retain direct or indirect control of each of the Subsidiary
Partnerships; and (iii) maintain a minimum equity interest (voting and economic)
of not less than that owned as of the date hereof and set forth on Schedule
3.02A.
SECTION 5.10. Subordination. The Company shall cause the Manager
to subordinate its right to the Management Fee to the Obligations to the extent
set forth in the form of Subordination Agreement attached hereto as EXHIBIT J;
provided, however, that so long as no Event of Default has occurred which is
continuing or any other Event of Default has occurred which is continuing,
<PAGE> 61
55
the Manager shall be entitled to receive the Management Fee pursuant to the
terms of the Management Agreement.
SECTION 5.11 Further Assurances. The Company shall deliver the
Pledge Agreement, the Recognition Agreements and other collateral documents (all
of which shall be deemed part of the Security Documents), in form and substance
reasonably satisfactory to the Administrative Agent, as the Administrative Agent
acting on behalf of the Lenders may reasonably request from time to time for the
purpose of granting to, or maintaining or perfecting in favor of the Secured
Parties, first and exclusive security interests in any of the Collateral,
together with other reasonable assurances as to the enforceability and priority
of the Liens under the Security Documents and assurances of due recording and
documentation of copies of the Security Documents, as the Administrative Agent
may reasonably require to avoid impairment of the Liens and security interests
granted or purported to be granted pursuant to the Security Documents.
ARTICLE VI
Negative Covenants
Until the Commitments have expired or terminated and the principal
of and interest on each Loan and all fees payable hereunder have been paid in
full and all Letters of Credit have expired or terminated and all LC
Disbursements shall have been reimbursed, the Borrowers covenant and agree with
the Lenders that:
SECTION 6.01. Indebtedness and Other Financial Covenants.
(a) Indebtedness. As of the first day of each calendar quarter,
(i) Total Outstanding Indebtedness shall not exceed fifty-five percent
(55%) of Total Value ("Total Outstanding Indebtedness Limitation"), or
(ii) the sum, without duplication, of Secured Indebtedness of the
Company and of the Subsidiaries plus Secured Indebtedness of the Joint
Ventures (with appropriate adjustments for minority interests)
allocable in accordance with GAAP to the Company or any Subsidiary
(with appropriate adjustments for minority interests) shall not exceed
forty percent (40%) of the Total Value ("Total Secured Outstanding
Indebtedness Limitation").
(b) Minimum Combined Equity Value. The Combined Equity Value as of
the last day of each fiscal quarter shall be not less than
$400,000,000, plus an amount equal to eighty-five percent (85%) of the
Fair Market Value of all Net Offering Proceeds received by the Company
after the date hereof.
(c) Minimum Consolidated Interest Coverage Ratio. As of the first
day of each calendar quarter for the immediately preceding calendar
quarter, the ratio of (i) the sum of Adjusted NOI for such preceding
calendar quarter, to (ii) Total Interest Expense for such quarter shall
not be less than 2.25 to 1.0.
(d) Minimum Unsecured Interest Coverage Ratio. As of the first day
of each calendar quarter, the ratio of (i) Adjusted Unencumbered NOI
for the preceding calendar quarter to (ii) Unsecured Interest Expense
for the preceding calendar quarter shall not be less than 2.5 to 1.0.
<PAGE> 62
56
(e) Minimum Adjusted Unencumbered NOI. As of the first day of each
calendar quarter, Total Unsecured Outstanding Indebtedness shall not
exceed 55% of the sum of (i) Adjusted Unencumbered NOI in respect of
Unencumbered Eligible Projects owned for at least four fiscal quarters
prior to the date of determination for the immediately preceding four
fiscal quarters divided by .10; and (ii) for Unencumbered Eligible
Projects owned for less than four fiscal quarters at the date of
determination, the investment (at historical cost, without
depreciation) by the Company and/or its Subsidiaries (with appropriate
adjustments for minority interests).
(f) Minimum Fixed Charge Coverage Ratio. As of the first day of
each calendar quarter, the ratio of (i) Total Adjusted EBITDA for the
preceding calendar quarter, to (ii) Fixed Charges for the preceding
calendar quarter shall not be less than 2.0 to 1.0.
(g) Maximum Dividend Payout Ratio. The Company shall not make any
Restricted Payment during any fiscal quarter, which, when added to all
Restricted Payments made during the three immediately preceding fiscal
quarters, exceeds ninety percent (90%) of Total Adjusted EBITDA for the
four preceding fiscal quarters. For purposes of this provision,
"Restricted Payment" means (i) any dividend or other distribution on
any equity securities of the Company (except dividends payable solely
in equity securities of the Company or in rights to subscribe for or
purchase equity securities of the Company) or (ii) any payment on
account of the purchase, redemption, retirement or acquisition of (a)
any equity securities of the Company or (b) any option, warrant or
other right to acquire equity securities of the Company.
(h) Recourse Indebtedness. The Company will not create, incur,
assume or permit to exist any Secured Indebtedness other than
Nonrecourse Indebtedness. The Company will not permit any Subsidiary
to, and no Subsidiary shall, create, incur, assume or permit to exist
any Indebtedness other than (i) Indebtedness of any Subsidiary to the
Company evidenced by a promissory note (an "Intercompany Note") in the
form of EXHIBIT K hereto, (ii) Nonrecourse Indebtedness, and (iii)
Indebtedness of a Subsidiary (other than a Subsidiary Partnership) to a
Subsidiary (other than a Subsidiary Partnership).
(i) Leveraged Assets. Notwithstanding any other provision of this
Section 6.01, Lease Value, Non-Recourse Indebtedness, Adjusted NOI and
Adjusted EBITDA in respect of Leveraged Assets shall be excluded from
the calculations made pursuant Section 6.01(a) through (g), inclusive;
provided, that the exclusion of such Leveraged Assets from such
calculations shall in no event reduce the amount of such Lease Value,
Non-Recourse Indebtedness, Adjusted NOI and Adjusted EBITDA by more
than 10% of the amount of Lease Value, Non-Recourse Indebtedness,
Adjusted NOI and Adjusted EBITDA that would have been derived had such
Leveraged Assets not been so excluded; and provided further, that,
subject to the following sentence, to the extent that a Leveraged Asset
is excluded in accordance with the foregoing, such Leveraged Asset
shall be excluded for all purposes of such calculations. For purposes
of (i) the calculation set forth in Section 6.01(c), Adjusted NOI
attributable to Leveraged Assets, reduced by the amount of all interest
expense paid, accrued and/or capitalized in respect of such Leveraged
Assets, shall be included in the calculation of total Adjusted NOI
(such amount of Adjusted NOI from Leveraged Assets (as so reduced by
interest paid, accrued and/or capitalized in respect of such Leveraged
Assets) so included not to exceed 5% of total Adjusted NOI); and (ii)
the calculation set forth in Section 6.01(f), Adjusted EBITDA
attributable to Leveraged Assets, reduced by the amount of all interest
expense paid, accrued and/or capitalized in respect of such Leveraged
Assets, shall be included in the calculation of Total Adjusted EBITDA
(such amount of Adjusted EBITDA from Leveraged Assets (as so reduced by
interest paid, accrued
<PAGE> 63
57
and/or capitalized in respect of such Leveraged Assets) so included not
to exceed 5% of Total Adjusted EBITDA).
(j) Negative Pledge. From and after the date hereof, no Borrower
shall enter into, and the Company will not permit any Subsidiary to
enter into, and no Subsidiary shall enter into, any agreement
containing any provision prohibiting the creation or assumption of any
Lien upon its properties (other than mechanics liens or judgment liens
not more than 30 days past due and other than with respect to
prohibitions on liens set forth in a mortgage on a particular
property), revenues or assets, whether now owned or hereafter acquired,
or restricting the ability of the Company or any Borrower to amend or
modify this Agreement or any other Loan Document.
(k) Pro Forma Calculations. The Company shall comply with the
financial ratios set forth in this Section 6.01 as of the date of each
Borrowing. The Company shall recalculate the financial ratios by adding
the amount equal to such Borrowing to the Indebtedness reflected on the
most recently available financial statements, and adding thereto any
Indebtedness incurred since the date of such financial statement and
adding thereto the value of such assets (determined at cost) acquired
with such Indebtedness to Total Value. The Company shall deliver an
Officer's Certificate, signed by the Financial Officer of the Company,
certifying that the pro forma calculations as of the date of such
Borrowing demonstrate the Company's compliance with the covenants and
financial ratios set forth in this Section 6.01.
SECTION 6.02. Liens. No Borrower shall and the Company will not
permit any Subsidiary to, create, incur, assume or permit to exist any Lien on
any property or asset now owned or hereafter acquired by it, or assign or sell
any income or revenues (including accounts receivable) or rights in respect of
any thereof, except:
(a) Permitted Encumbrances;
(b) Liens with respect to Capital Leases of Equipment entered into
in the ordinary course of business of the Company pursuant to which the
aggregate Indebtedness under such Capital Leases does not exceed
$50,000 for any Project; and
(c) Liens securing Secured Indebtedness the incurrence of which is
not prohibited by Article VI.
Notwithstanding the foregoing, the Company shall not in any event create, incur,
assume or permit to exist any Lien on the Collateral, except pursuant to the
Loan Documents.
SECTION 6.03. Fundamental Changes. (a) No Borrower shall, and the
Company will not permit any Subsidiary to, merge into or consolidate with any
other Person, or permit any other Person to merge into or consolidate with it,
or sell, transfer, lease or otherwise dispose of (in one transaction or in a
series of transactions) all or substantially all of its assets, or all or
substantially all of the stock of any of its Subsidiaries (in each case, whether
now owned or hereafter acquired), or liquidate or dissolve, except (i) in
connection with the issuance, transfer, conversion or repurchase of limited
liability company interests in the Company, (ii) if at the time thereof and
immediately after giving effect thereto no Default shall have occurred and be
continuing any Person may merge into the Company or a Subsidiary in a
transaction in which the Company or a Subsidiary is the surviving corporation,
(iii) any Subsidiary may merge with any other Subsidiary; provided, that if any
Subsidiary shall be merged with a Subsidiary Partnership, the surviving
Subsidiary shall be the Subsidiary Partnership or shall become a
<PAGE> 64
58
Borrower under this Agreement and (iv) the sale of stock of a Subsidiary (other
than a Subsidiary Partnership), subject to the limitations set forth in Section
5.02(b).
(b) No Borrower shall, and the Company will not permit any of its
Subsidiaries to, engage to any material extent in any business other than
businesses of the type conducted by the Company and its Subsidiaries on the date
of execution of this Agreement and businesses reasonably related thereto.
SECTION 6.04. Investments, Loans, Advances, Guarantees and
Acquisitions. No Borrower shall, and the Company will not permit any of its
Subsidiaries to, purchase, hold or acquire (including pursuant to any merger
with any Person that was not a wholly owned Subsidiary prior to such merger) any
capital stock, evidences of indebtedness or other securities (including any
option, warrant or other right to acquire any of the foregoing) of, make or
permit to exist any loans or advances to, Guarantee any obligations of, or make
or permit to exist any investment or any other interest in, any other Person, or
purchase or otherwise acquire (in one transaction or a series of transactions)
any assets of any other Person constituting a business unit, except:
(a) Permitted Investments;
(b) investments in Real Property;
(c) investments (including loans) in or to the Subsidiaries;
(d) investments in Joint Ventures which are not Subsidiaries;
(e) investments in notes secured by mortgages on any Real
Property of any Person;
(f) investments in Real Property under construction;
(g) investments in Permitted REIT Investments;
(h) investments in Marketable Securities; and
(i) investments in securities of tenants under Leases, including
any capital stock, warrants, stock options or other equity
securities of such tenants and any underlying security
thereof, acquired in connection with or arising out of a
leasing transaction with such tenant and any subsequent
exercise of such warrant or stock options and the ownership
of such underlying security thereof.
Notwithstanding the foregoing, the investments set forth above shall be limited
in the following manner: (i) the aggregate investments of the types set forth in
clauses (d) through (f) (other than, in the case of clause (f), Real Property
under construction that is being built to suit a tenant under an Eligible Lease,
which shall be without limitation), shall not exceed 15% of Total Value for any
single type of such investment or 20% of Total Value for all such types of
investments; (ii) the aggregate investments of the type set forth in clause (g)
above shall not exceed $50,000,000 (valued at historical cost); and (iii) the
aggregate investments by the Company and its consolidated Subsidiaries of the
type set forth in clause (h) above shall not exceed $50,000,000.
SECTION 6.05. Hedging Agreements. No Borrower shall, and the
Company will not permit any of its Subsidiaries to, enter into any Hedging
Agreement, other than Hedging Agreements
<PAGE> 65
59
entered into in the ordinary course of business to hedge or mitigate risks to
which the Company or any Subsidiary is exposed in the conduct of its business or
the management of its liabilities.
SECTION 6.06. Control of Manager. W.P. Carey & Co., Inc. shall
maintain Control at all times of the Manager, prior to the date, if any, W. P.
Carey & Co., Inc. or the Manager is merged into the Company; provided that the
foregoing limitation shall not prohibit the merger of W.P. Carey & Co. Inc. or
the Manager with and into the Company.
SECTION 6.07. Margin Regulations; Securities Laws. Neither the
Company nor any of its Subsidiaries shall use all or any portion of the proceeds
of any credit extended under this Agreement to purchase or carry Margin Stock.
SECTION 6.08. Transactions with Affiliates. Neither the Company
nor any of its Subsidiaries shall directly or indirectly enter into or permit to
exist any transaction (including, without limitation, the purchase, sale, lease
or exchange of any property or the rendering of any service) with any holder or
holders of more than five percent (5%) of any class of equity securities of the
Company, or with any Affiliate of the Company which is not its Subsidiary, on
terms that are determined by the board of directors of the Company to be less
favorable to the Company or any of its Subsidiaries, as applicable, than those
that might be obtained in an arm's length transaction at the time from Persons
who are not such a holder or Affiliate. Nothing contained in this Section 6.08
shall prohibit (a) increases in compensation and benefits for officers and
employees of the Company or any of its Subsidiaries which are customary in the
industry or consistent with the past business practice of the Company or such
Subsidiary, provided that no Default has occurred and is continuing; (b) payment
of customary partners' indemnities; or (c) performance of any obligations
arising under the Loan Documents, (d) subject to Section 6.09, transactions
pursuant to the Management Agreement, and (e) any Restricted Payment permitted
by Section 6.01.
SECTION 6.09. Management Agreement. No Borrower shall, and the
Company will not permit any of its Subsidiaries to, consent to any amendment,
supplement, amendment and restatement, waiver or other modification of any of,
or enter into any forbearance from exercising any rights with respect to, the
terms or provisions contained in, or applicable to, the Management Agreement or
any schedules, exhibits or agreements related thereto, in each case which
amendment, supplement, amendment and restatement, waiver, modification, or
forbearance would adversely affect the Company's ability to perform hereunder or
which would increase the Company's or any of its Subsidiaries' obligations or
liabilities, contingent or otherwise (other than adjustments made pursuant to
the terms of the Management Agreement), except for such amendments, supplements,
amendments and restatements, waivers, modifications or acts of forbearance
which, in the reasonable judgment of the Required Lenders, would not be likely
to detrimentally and materially affect the Company and any of its Subsidiaries,
or the rights, benefits or interests of the Administrative Agent, the Issuing
Bank or the Lenders.
ARTICLE VII
Events of Default
SECTION 7.01. If any of the following events ("Events of Default")
shall occur:
(a) any Borrower shall fail to pay any principal of any Loan or
any reimbursement obligation in respect of any LC Disbursement when and
as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or otherwise;
<PAGE> 66
60
(b) any Borrower shall fail to pay any interest on any Loan or any
fee or any other amount (other than an amount referred to in clause (a)
of this Article) payable under this Agreement, when and as the same
shall become due and payable, and such failure shall continue
unremedied for a period of three Business Days;
(c) any representation or warranty made or deemed made by or on
behalf of the Company or any Subsidiary in or in connection with this
Agreement or any other Loan Document or any amendment or modification
hereof or thereof or waiver hereunder or thereunder, or in any report,
certificate, financial statement or other document furnished pursuant
to or in connection with this Agreement or any other Loan Document or
any amendment or modification hereof or thereof or waiver hereunder or
thereunder, shall prove to have been incorrect when made or deemed made
or furnished;
(d) the Company or any Subsidiary shall fail to observe or perform
any covenant, condition or agreement contained in Article V or in
Article VI or any covenant, condition or agreement in any Loan Document
that becomes effective upon an Event of Default;
(e) the Company or any Subsidiary shall fail to observe or perform
any covenant, condition or agreement contained in this Agreement or any
other Loan Document (other than those specified in clause (a), (b) or
(d) of this Article), and such failure shall continue unremedied for a
period of 30 days after notice thereof from the Administrative Agent to
the Company (which notice will be given at the request of any Lender);
(f) the Company or any Subsidiary shall fail to make any payment
(whether of principal or interest and regardless of amount) in respect
of any Material Indebtedness, when and as the same shall become due and
payable;
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that
enables or permits (with or without the giving of notice, the lapse of
time or both) the holder or holders of any Material Indebtedness or any
trustee or agent on its or their behalf to cause any Material
Indebtedness to become due, or to require the prepayment, repurchase,
redemption or defeasance thereof, prior to its scheduled maturity;
provided that this clause (g) shall not apply to Secured Indebtedness
that becomes due as a result of the voluntary sale or transfer of the
property or assets securing such Indebtedness unless prohibited by this
Agreement;
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or
other relief in respect of the Company or any Subsidiary or its debts,
or of a substantial part of its assets, under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect or (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the
Company or any Subsidiary or for a substantial part of its assets, and,
in any such case, such proceeding or petition shall continue
undismissed for 60 days or an order or decree approving or ordering any
of the foregoing shall be entered;
(i) the Company or any Subsidiary shall (i) voluntarily commence
any proceeding or file any petition seeking liquidation, reorganization
or other relief under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect,
(ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition described in clause (h)
of this Article, (iii) apply for or consent to the
<PAGE> 67
61
appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Company or any Subsidiary or
for a substantial part of its assets, (iv) file an answer admitting the
material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of creditors
or (vi) take any action for the purpose of effecting any of the
foregoing;
(j) the Company or any Subsidiary shall become unable, admit in
writing or fail generally to pay its debts as they become due;
(k) one or more judgments for the payment of money in an aggregate
amount in excess of $3,000,000 (excluding judgments entered in respect
of Nonrecourse Indebtedness) shall be rendered against the Company, any
Subsidiary or any combination thereof and the same shall remain
undischarged for a period of 30 consecutive days during which execution
shall not be effectively stayed, or any action shall be legally taken
by a judgment creditor to attach or levy upon any assets of the Company
or any Subsidiary to enforce any such judgment;
(l) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other ERISA Events that
have occurred, could reasonably be expected to result in liability of
the Company or any Subsidiary in an aggregate amount exceeding (i)
$250,000 in any year or (ii) $500,000 for all periods;
(m) a Change in Control shall occur;
(n) an event shall occur which has a Material Adverse Effect;
(o) the Company shall merge or liquidate with or into any other
Person and, as a result thereof and after giving effect thereto, (i)
the Company is not the surviving Person or (ii) such merger or
liquidation would effect an acquisition of or investment in any Person
not otherwise permitted under the terms of this Agreement;
(p) the Company or the Manager shall breach in any material
respect any material provision of the Management Agreement and such
breach shall continue unremedied for a period of 30 days; or
(q) a security interest purported to be created by any Security
Document shall cease to be, or shall be asserted by any Borrower not to
be, a valid, perfected, first priority security interest in the rights,
securities, assets, properties or other Collateral covered thereby, or
shall fail to constitute the sole and exclusive Lien on the Collateral
covered thereby; or any Borrower takes or authorizes any action that
impairs or otherwise adversely affects the Collateral (or any part
thereof) or any rights or remedies of the Secured Parties to enforce
and realize upon such Collateral; or the legality, validity or
enforceability of any Loan Document shall be contested by any Borrower,
then, and in every such event (other than an event with respect to the Company
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Company, take one or
more of the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and (ii)
declare the Loans then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be
<PAGE> 68
62
due and payable may thereafter be declared to be due and payable), and thereupon
the principal of the Loans so declared to be due and payable, together with
accrued interest thereon and all fees and other obligations of the Borrowers
accrued hereunder, shall become due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Company (iii) require cash collateral as contemplated by
Section 2.06(j), and (iv) enforce any rights and exercise any rights and
remedies available under any Loan Document or otherwise; and in the case of any
event with respect to the Borrowers described in clause (h) or (i) of this
Article, the Commitments shall automatically terminate and the principal of the
Loans then outstanding, together with accrued interest thereon and all fees and
other obligations of the Company accrued hereunder, shall automatically become
due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Company.
ARTICLE VIII
The Administrative Agent
SECTION 8.01. Each of the Lenders and the Issuing Bank hereby
irrevocably appoints the Administrative Agent as its agent and authorizes the
Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms hereof,
together with such actions and powers as are reasonably incidental thereto.
The bank serving as the Administrative Agent hereunder shall have
the same rights and powers in its capacity as a Lender as any other Lender and
may exercise the same as though it were not the Administrative Agent, and such
bank and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with the Company or any Subsidiary or other
Affiliate thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth herein. Without limiting the generality of the
foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing, (b) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby that the Administrative Agent is
required to exercise in writing by the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02), and (c) except as expressly set forth herein, the
Administrative Agent shall not have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to the Company or
any of its Subsidiaries that is communicated to or obtained by the bank serving
as Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02) or in the absence of its own gross negligence or
willful misconduct. The Administrative Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by the Company or a Lender, and the Administrative Agent
shall not be responsible for or have any duty to ascertain or inquire into (i)
any statement, warranty or representation made in or in connection with this
Agreement, (ii) the contents of any certificate, report or other document
delivered hereunder or in connection herewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere
<PAGE> 69
63
herein, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall
not incur any liability for relying upon, any notice, request, certificate,
consent, statement, instrument, document or other writing believed by it to be
genuine and to have been signed or sent by the proper Person. The Administrative
Agent also may rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not incur any
liability for relying thereon. The Administrative Agent may consult with legal
counsel (who may be counsel for the Company), independent accountants and other
experts selected by it, and shall not be liable for any action taken or not
taken by it in accordance with the advice of any such counsel, accountants or
experts.
The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided in this paragraph, the Administrative Agent may
resign at any time by notifying the Lenders, the Issuing Bank and the Company.
Upon any such resignation, the Required Lenders shall have the right, in
consultation with the Company, to appoint a successor. If no successor shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent gives notice
of its resignation, then the retiring Administrative Agent may, on behalf of the
Lenders and the Issuing Bank, appoint a successor Administrative Agent which
shall be a bank with an office in New York, New York, or an Affiliate of any
such bank. Upon the acceptance of its appointment as Administrative Agent
hereunder by a successor, such successor shall succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder. The fees payable by the Company to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Company and such successor. After the
Administrative Agent's resignation hereunder, the provisions of this Article and
Section 9.03 shall continue in effect for the benefit of such retiring
Administrative Agent, its sub-agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while it was
acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any related agreement or any document furnished hereunder or thereunder.
<PAGE> 70
64
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Company or any Borrower, to it at Carey Diversified
LLC, c/o W.P. Carey & Co., Inc., 50 Rockefeller Plaza, New York, New
York 10020, Attention of Steven Berzin, Chief Financial Officer
(Telecopy No. 212-977-3022);
(b) if to the Administrative Agent, to The Chase Manhattan Bank,
One Chase Manhattan Plaza, 8th Floor, New York, New York 10005,
Attention: Loan and Agency Services (Telecopy No. (212) 552-5701), with
a copy to The Chase Manhattan Bank, 270 Park Avenue, New York 10017,
Attention of William C. Veits, Esq. (Telecopy No. (212) 270-1268);
(c) if to the Issuing Bank, to The Chase Manhattan Bank, One Chase
Manhattan Plaza, 8th Floor, New York, New York 10005, Attention: Loan
and Agency Services (Telecopy No. (212) 552-5701); and
(d) if to any other Lender, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 9.02. Waivers; Amendments. (a) No failure or delay by the
Administrative Agent, the Issuing Bank or any Lender in exercising any right or
power hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Administrative Agent, the Issuing Bank and the Lenders
hereunder are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of this Agreement or
consent to any departure by the Company or any Borrower therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. Without limiting the generality of
the foregoing, the making of a Loan or issuance of a Letter of Credit shall not
be construed as a waiver of any Default, regardless of whether the
Administrative Agent, any Lender or the Issuing Bank may have had notice or
knowledge of such Default at the time.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Company and the Required Lenders or by the Company and the
Administrative Agent with the consent of the Required Lenders; provided that no
such agreement shall (i) increase the Commitment of any Lender without the
written consent of such Lender, (ii) reduce the principal amount of any Loan or
LC Disbursement or reduce the rate of interest thereon, or reduce any fees
payable hereunder, without the written consent of
<PAGE> 71
65
each Lender affected thereby, (iii) postpone the scheduled date of payment of
the principal amount of any Loan or LC Disbursement, or any interest thereon, or
any fees payable hereunder, or reduce the amount of, waive or excuse any such
payment, or postpone the scheduled date of expiration of any Commitment, without
the written consent of each Lender affected thereby, (iv) change Section 2.18(b)
or (c) in a manner that would alter the pro rata sharing of payments required
thereby, without the written consent of each Lender, (v) release any lien upon
any of the Collateral, or (vi) change any of the provisions of this Section or
the definition of "Required Lenders" or any other provision hereof specifying
the number or percentage of Lenders required to waive, amend or modify any
rights hereunder or make any determination or grant any consent hereunder,
without the written consent of each Lender; provided further that no such
agreement shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent or the Issuing Bank hereunder without, in addition, the
prior written consent of the Administrative Agent or the Issuing Bank, as the
case may be; provided, further, (x) that Schedule 3.13 may be amended by the
Company without the consent of the Required Lenders, solely to update such
schedule to include or exclude Leases listed therein which constitute or cease
to constitute Triple Net Leases, and (y) Schedules 3.02 and 4.01(f) may be
amended by the Company without the consent of the Required Lenders solely to
update the information contained therein.
SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The Company
shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates, including the reasonable fees, charges
and disbursements of counsel for the Administrative Agent, in connection with
the syndication of the credit facilities provided for herein, the preparation
and administration of this Agreement or any amendments, modifications or waivers
of the provisions hereof (whether or not the transactions contemplated hereby or
thereby shall be consummated), (ii) all reasonable out-of-pocket expenses
incurred by the Issuing Bank in connection with the issuance, amendment, renewal
or extension of any Letter of Credit or any demand for payment thereunder and
(iii) all out-of-pocket expenses incurred by the Administrative Agent, the
Issuing Bank or any Lender, including the fees, charges and disbursements of any
counsel for the Administrative Agent, the Issuing Bank or any Lender, in
connection with the enforcement or protection of its rights in connection with
this Agreement, including its rights under this Section, or in connection with
the Loans made or Letters of Credit issued hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.
(b) The Borrowers shall indemnify the Administrative Agent, the
Issuing Bank and each Lender, and each Related Party of any of the foregoing
Persons (each such Person being called an "Indemnitee") against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including the fees, charges and disbursements of any counsel
for any Indemnitee, incurred by or asserted against any Indemnitee arising out
of, in connection with, or as a result of (i) the execution or delivery of this
Agreement or any agreement or instrument contemplated hereby, the performance by
the parties hereto of their respective obligations hereunder or the consummation
of the Transactions or any other transactions contemplated hereby, (ii) any Loan
or Letter of Credit or the use of the proceeds therefrom (including any refusal
by the Issuing Bank to honor a demand for payment under a Letter of Credit if
the documents presented in connection with such demand do not strictly comply
with the terms of such Letter of Credit), (iii) any actual or alleged presence
or release of Hazardous Materials on or from any property owned or operated by
the Company or any of its Subsidiaries, or any Environmental Liability related
in any way to the Company or any of its Subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available
<PAGE> 72
66
to the extent that such losses, claims, damages, liabilities or related expenses
resulted from the gross negligence or willful misconduct of such Indemnitee.
(c) To the extent that any Borrower fails to pay any amount
required to be paid by it to the Administrative Agent or the Issuing Bank under
paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the
Administrative Agent or the Issuing Bank, as the case may be, such Lender's
Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent or the Issuing Bank in its capacity as such.
(d) To the extent permitted by applicable law, the Borrowers shall
not assert, and hereby waive, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement or any agreement or instrument contemplated hereby, the
Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable promptly
after written demand therefor.
SECTION 9.04. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby (including any
Affiliate of the Issuing Bank that issues any Letter of Credit), except that the
Borrowers may not assign or otherwise transfer any of their rights or
obligations hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by the Borrowers without such consent shall be
null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit) and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent,
the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); provided that
(i) except in the case of an assignment to a Lender or an Affiliate of a Lender,
each of the Borrowers and the Administrative Agent (and, in the case of an
assignment of all or a portion of a Commitment or any Lender's obligations in
respect of its LC Exposure, the Issuing Bank) must give their prior written
consent to such assignment (which consent shall not be unreasonably withheld),
(ii) except in the case of an assignment to a Lender or an Affiliate of a Lender
or an assignment of the entire remaining amount of the assigning Lender's
Commitment, the amount of the Commitment of the assigning Lender subject to each
such assignment (determined as of the date the Assignment and Acceptance with
respect to such assignment is delivered to the Administrative Agent) shall not
be less than $5,000,000 unless each of the Company and the Administrative Agent
otherwise consent, (iii) each partial assignment shall be made as an assignment
of a proportionate part of all the assigning Lender's rights and obligations
under this Agreement, except that this clause (iii) shall not apply to rights in
respect of outstanding Competitive Loans, (iv) the parties to each assignment
shall execute and deliver to the Administrative Agent an Assignment and
Acceptance, together with a processing and recordation fee of $3,500, and (v)
the assignee, if it shall not be a Lender, shall deliver to the Administrative
Agent an Administrative Questionnaire; and provided further that any consent of
the Company otherwise required under this paragraph shall not be required if an
Event of Default under Article VII has occurred and is
<PAGE> 73
67
continuing. Subject to acceptance and recording thereof pursuant to paragraph
(d) of this Section, from and after the effective date specified in each
Assignment and Acceptance the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Acceptance, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this Agreement
arising from and after the date of such assignment (and, in the case of an
Assignment and Acceptance covering all of the assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to be a party hereto
but shall continue to be entitled to the benefits of Sections 2.15, 2.16, 2.17
and 9.03). Any assignment or transfer by a Lender of rights or obligations under
this Agreement that does not comply with this paragraph shall be treated for
purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with paragraph (e) of this Section.
(c) The Administrative Agent, acting for this purpose as an agent
of the Borrowers, shall maintain at one of its offices in The City of New York a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans and LC Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive, and the Borrowers, the Administrative Agent,
the Issuing Bank and the Lenders may treat each Person whose name is recorded in
the Register pursuant to the terms hereof as a Lender hereunder for all purposes
of this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Company, the Issuing Bank and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Acceptance and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Borrowers, the
Administrative Agent or the Issuing Bank, sell participations to one or more
banks or other entities (a "Participant") in all or a portion of such Lender's
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans owing to it); provided that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Borrowers, the Administrative Agent, the Issuing
Bank and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver described in the first proviso to
Section 9.02(b) that affects such Participant. Subject to paragraph (f) of this
Section, the Borrowers agree that each Participant shall be entitled to the
benefits of Sections 2.15, 2.16 and 2.17 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section. To the extent permitted by law, each Participant also shall be
<PAGE> 74
68
entitled to the benefits of Section 9.08 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.18(c) as though it were a
Lender.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.15 or 2.17 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Company's prior written consent. A Participant that would be a Foreign Lender if
it were a Lender shall not be entitled to the benefits of Section 2.17 unless
the Company is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Company, to comply with Section
2.17(e) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
SECTION 9.05. Survival. All covenants, agreements, representations
and warranties made by the Borrowers herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any Loans
and issuance of any Letters of Credit, regardless of any investigation made by
any such other party or on its behalf and notwithstanding that the
Administrative Agent, the Issuing Bank or any Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
credit is extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any fee or any
other amount payable under this Agreement is outstanding and unpaid or any
Letter of Credit is outstanding and so long as the Commitments have not expired
or terminated. The provisions of Sections 2.15, 2.16, 2.17 and 9.03 and Article
VIII shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any provision hereof.
SECTION 9.06. Counterparts; Integration; Effectiveness. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement and
any separate letter agreements with respect to fees payable to the
Administrative Agent constitute the entire contract among the parties relating
to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. This
Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
Delivery of an executed counterpart of a signature page of this Agreement by
telecopy shall be effective as delivery of a manually executed counterpart of
this Agreement.
SECTION 9.07. Severability. Any provision of this Agreement held
to be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
<PAGE> 75
69
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other obligations at any time
owing by such Lender or Affiliate to or for the credit or the account of any or
all of the Borrowers against any of and all the obligations of the Borrowers now
or hereafter existing under this Agreement held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement and
although such obligations may be unmatured. The rights of each Lender under this
Section are in addition to other rights and remedies (including other rights of
setoff) which such Lender may have.
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of
Process. (a) This Agreement shall be construed in accordance with and governed
by the law of the State of New York.
(b) Each Borrower hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of the Supreme
Court of the State of New York sitting in New York County and of the United
States District Court of the Southern District of New York, and any appellate
court from any thereof, in any action or proceeding arising out of or relating
to this Agreement, or for recognition or enforcement of any judgment, and each
of the parties hereto hereby irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding may be heard and determined
in such New York State or, to the extent permitted by law, in such Federal
court. Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Administrative Agent,
the Issuing Bank or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement against the Borrowers or their properties
in the courts of any jurisdiction.
(c) Each of the Borrowers hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement in any court
referred to in paragraph (b) of this Section. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
(d) Each party to this Agreement irrevocably consents to service
of process in the manner provided for notices in Section 9.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER
<PAGE> 76
70
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings. Article and Section headings and the Table
of Contents used herein are for convenience of reference only, are not part of
this Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 9.12. Confidentiality. Each of the Administrative Agent,
the Issuing Bank and the Lenders agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a) to
its and its Affiliates' directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority, (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party to this Agreement, (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or the enforcement of rights hereunder,
(f) subject to an agreement containing provisions substantially the same as
those of this Section, to any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this
Agreement, (g) with the consent of the Company or (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section or (ii) becomes available to the Administrative Agent, the Issuing
Bank or any Lender on a nonconfidential basis from a source other than the
Company. For the purposes of this Section, "Information" means all information
received from the Company relating to the Company or its business, other than
any such information that is available to the Administrative Agent, the Issuing
Bank or any Lender on a nonconfidential basis prior to disclosure by the
Company. Any Person required to maintain the confidentiality of Information as
provided in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information.
SECTION 9.13. Interest Rate Limitation. Notwithstanding anything
herein to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts which are treated as interest
on such Loan under applicable law (collectively the "Charges"), shall exceed the
maximum lawful rate (the "Maximum Rate") which may be contracted for, charged,
taken, received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.
ARTICLE X
Multiple Borrowers
Each Borrower agrees (including any New Borrower) that the
representations and warranties made by, and the liabilities, obligations and
covenants of and applicable to, any or all of the Borrowers under this
Agreement, shall be in every case (whether or not specifically so stated in each
such case herein) joint and several in all circumstances. Every notice by or to
the Company shall be deemed also to constitute simultaneous notice by and to
each other Borrower, every act or omission by
<PAGE> 77
71
any Borrower also shall be deemed an act or omission of each other Borrower and
shall be binding upon each other Borrower, and the Administrative Agent, the
Issuing Bank and the Lenders are fully authorized by each Borrower to act and
rely also upon the representations and warranties, covenants, notices, acts and
omissions of each other Borrower. Without limiting the generality of the
foregoing, each Borrower agrees that the obligations of such Borrower hereunder
and under the other Loan Documents shall be enforceable against such Borrower
notwithstanding that this Agreement or any other Loan Document may be
unenforceable in any respect against any other Borrower.
ARTICLE XI
REIT Conversion
The Company has advised the Lenders that the Company is
contemplating a transaction whereby the Company may become controlled by an
entity which will elect to become taxable as a REIT for federal income tax
purposes. The Lenders acknowledge that the Company may elect to pursue such a
transaction and that such transaction may require amendments to the provisions
contained herein relating to mergers or other business combinations and relating
to the payment of dividends by the Company or the Subsidiaries. To the extent
that any such contemplated transaction requires such amendments, the Lenders
shall not unreasonably withhold or condition their consent to such amendments
and shall not impose any fee for reviewing and/or approving any proposed REIT
conversion requiring only such amendments, although the Company acknowledges
that it will pay the Lenders' costs and expenses, including attorneys fees and
costs, in reviewing any such proposed transaction.
Notwithstanding the foregoing paragraph, it is understood by the
parties hereto that the Company has not made any request related to any
particular transaction, or otherwise related to the foregoing, to the Lenders or
submitted any plan or proposal with respect thereto to the Lenders. This Article
shall not constitute the consent of the Lenders to such a contemplated
transaction, nor the approval of such a transaction or the Lenders' agreement to
modify, amend or waive any provision hereof or any other Loan Document.
<PAGE> 78
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the day and
year first above written.
CAREY DIVERSIFIED LLC
By: CAREY MANAGEMENT LLC
By: _______________________________
Name: John J. Park
Title: Senior Vice President
THE CHASE MANHATTAN BANK, individually
and as Administrative Agent,
By: ____________________________________
Name: John Mix
Title: Vice President
CREDITANSTALT CORPORATE
FINANCE, INC., as Lender
By: ____________________________________
Name:
Title:
By: ____________________________________
Name:
Title:
THE BANK OF NEW YORK, as Lender and
Documentation Agent
By: ____________________________________
Name:
Title:
<PAGE> 79
SCHEDULE 2.01
<PAGE> 80
SCHEDULE 3.02
<PAGE> 81
SCHEDULE 3.02A
<PAGE> 82
SCHEDULE 3.03
<PAGE> 83
SCHEDULE 3.04
<PAGE> 84
SCHEDULE 3.06
None.
<PAGE> 85
SCHEDULE 3.12
<PAGE> 86
SCHEDULE 3.13
<PAGE> 87
SCHEDULE 4.01(f)
<PAGE> 88
EXHIBIT A
[FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of [ ] (as
amended and in effect on the date hereof, the "Credit Agreement"), among [ ],
the Lenders named therein and The Chase Manhattan Bank, as Administrative Agent
for the Lenders, The Bank of New York, as Documentation Agent, and Chase
Securities, Inc., as Arranger. Terms defined in the Credit Agreement are used
herein with the same meanings.
The Assignor named on the reverse hereof hereby sells and
assigns, without recourse, to the Assignee named on the reverse hereof, and the
Assignee hereby purchases and assumes, from the Assignor, effective as of the
Date of Assignment ("Assignment Date") set forth below, the interests set forth
on the reverse hereof (the "Assigned Interest") in the Assignor's rights and
obligations under the Credit Agreement, including, without limitation, the
interests set forth on the reverse hereof in the Commitment of the Assignor on
the Assignment Date and [Competitive Loans] and Revolving Loans owing to the
Assignor which are outstanding on the Assignment Date, together with the
participations in Letters of Credit and LC Disbursements held by the Assignor on
the Assignment Date, but excluding accrued interest and fees to and excluding
the Assignment Date. The Assignee hereby acknowledges receipt of a copy of the
Credit Agreement. From and after the Assignment Date (i) the Assignee shall be a
party to and be bound by the provisions of the Credit Agreement and, to the
extent of the Assigned Interest, have the rights and obligations of a Lender
thereunder and (ii) the Assignor shall, to the extent of the Assigned Interest,
relinquish its rights (except as set forth in Section 9.04(b) of the Credit
Agreement and be released from its obligations under the Credit Agreement
arising from and after the Assignment Date.
This Assignment and Acceptance is being delivered to the
Administrative Agent together with (i) if the Assignee is a Foreign Lender, any
documentation required to be delivered by the Assignee pursuant to Section
2.17(e) of the Credit Agreement, duly completed and executed by the Assignee,
and (ii) if the Assignee is not already a Lender under the Credit Agreement, an
Administrative Questionnaire in the form supplied by the Administrative Agent,
duly completed by the Assignee. The [Assignee/Assignor] shall pay the fee
payable to the Administrative Agent pursuant to Section 9.04(b) of the Credit
Agreement.
This Assignment and Acceptance shall be governed by and
construed in accordance with the laws of the State of New York.
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
Effective Date of Assignment
("Assignment Date"):
A-1
<PAGE> 89
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
Percentage Assigned of
Facility/Commitment (set forth,
Principal Amount to at least 8 decimals, as a
Assigned (and identifying percentage of the Facility and
information as to individual the aggregate Commitments of all
Facility Competitive Loans) Lenders thereunder)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Commitment Assigned: $ %
- -----------------------------------------------------------------------------------------------------------
Revolving Loans:
- -----------------------------------------------------------------------------------------------------------
Competitive Loans:
- -----------------------------------------------------------------------------------------------------------
</TABLE>
The terms set forth above and on the reverse side hereof are hereby agreed to:
[Name of Assignor] , as Assignor
By:______________________________
Name:
Title:
[Name of Assignee] , as Assignee
By:______________________________
Name:
Title:
A-2
<PAGE> 90
The undersigned hereby consent to the within assignment: (1)
[Name of Borrower], The Chase Manhattan Bank,
as Administrative Agent,
By:______________________________ By:______________________________
Name: Name:
Title: Title:
The Chase Manhattan Bank, as
Issuing Bank,
By:______________________________
Name:
Title:
(1) Consents to be included to the extent required by Section 9.04(b) of the
Credit Agreement.
A-3
<PAGE> 91
EXHIBIT B
[Form of Borrowing Base Certificate]
Reference is made to the Credit Agreement, dated as of March
26, 1998 (as modified and supplemented and in effect from time to time, the
"Credit Agreement") among Carey Diversified LLC (the "Company"), certain lenders
party thereto, The Chase Manhattan Bank, as Issuing Bank and Administrative
Agent, The Bank of New York, as Documentation Agent, and Chase Securities, Inc.,
as Arranger. Unless otherwise indicated, defined terms used herein have the
meanings ascribed to them in the Credit Agreement.
Pursuant to Section 5.01 of the Credit Agreement, the
undersigned, the [President, Vice President or Chief Financial Officer of the
Company or the Manager] hereby certifies as follows:
This Borrowing Base Certificate has been prepared in
accordance with the provisions of the Credit Agreement.
This Borrowing Base Certificate and the information attached
hereto and the Schedules delivered herewith represent an accurate statement of
the matters purported to be set forth herein or therein as of the date set forth
above.
This Borrowing Base Certificate is accompanied by Annex 1 and
backup schedules showing the derivation hereof, as referred to in the Credit
Agreement.
IN WITNESS WHEREOF, the undersigned has caused this
certificate to be duly executed as of the _____ day of __________, 199___.
By:________________________________
Name:______________________________
Title:_____________________________
B-1
<PAGE> 92
Annex 1
"Borrowing Base" means, as of any date, the lesser of (i) $150,000,000 and (ii)
an amount equal to (A) the Lease Value less (B) 1.33 multiplied by the amount of
Total Unsecured Outstanding Indebtedness (excluding for such purpose only
Indebtedness outstanding in respect of Loans) of the Consolidated Businesses.
1. Lease Value(1):
(a) Sum of:
<TABLE>
<S> <C>
(i) Unencumbered Lease Value............................................ = $__________
Unencumbered Lease Value = (as of any date, the sum of the net
present value of the projected contractual income, net of the
projected expenses to be incurred by landlord, from all Eligible
Leases of Unencumbered Eligible Projects (with appropriate
adjustments with respect to minority interests in Joint Ventures
and the Subsidiaries through which such Projects are held to
reflect the actual percentage interest of income entitled to be
received where the collective ownership interests are less than
100%), discounted at an annual rate of 10.5%)(2)
multiplied by 75%...................... = $__________
plus:
(ii) Encumbered Lease Value.............................................. = $__________
Encumbered Lease Value = (as of any date, the sum of the net
present value of the projected contractual income, net of the
projected expenses to be incurred by landlord, from all Eligible
Leases of Encumbered Eligible Projects (with appropriate
adjustments with respect to minority interests in Joint Ventures
and the Subsidiaries through which such Projects are held to
reflect the
</TABLE>
(1) "Lease Value" means, as of any date, the sum of (i) 75% of Unencumbered
Lease Value; (ii) the excess, if any, of (A) 75% of Encumbered Lease Value
over (B) the amount of all Indebtedness in respect of Properties for which
the corresponding Eligible Lease was included in the calculation of
Encumbered Lease Value; and (iii) 50% of Residual Proceeds. Solely for
purposes of calculating Lease Value, not more than 15% of Lease Value may
consist of the sum of (x) amounts calculated pursuant to clause (ii) above;
(y) the sum of (1) Encumbered Lease Value attributable to Projects that are
not 100% owned by the Consolidated Businesses and/or the Subsidiary
Partnerships (but only to the extent that the value of such Project is
included in clause (ii) above) and (2) Unencumbered Lease Value attributable
to Projects that are not 100% owned by the Consolidated Businesses and/or
the Subsidiary Partnerships (but only to the extent that the value of such
Project is included in clause (i) above) and (z) the amount derived under
clause (iii) above. Solely for purposes of calculating Lease Value, not more
than 10% of Lease Value may consist of Lease Value attributable to Eligible
Leases other than Triple Net Leases.
(2) In determining Unencumbered Lease Value, income from lease extensions under
any Lease will be included only if the extension right with respect to such
Lease has been unconditionally and irrevocably exercised by the tenant (or
the tenant has lost its rights to terminate the lease prior to the automatic
extension thereof). In determining the amount of projected contractual
income, net of projected expenses to be incurred by landlord, from any
Eligible Lease, all amounts attributable to adjustments in rental
obligations of a tenant that are contingent (for example, rental increases
based upon a specified occupancy rate) or otherwise indeterminate (for
example, rental increases based upon index adjustments), shall be excluded.
B-2
<PAGE> 93
<TABLE>
<S> <C> <C>
actual percentage interest of income entitled to be
received where the collective ownership interests are less than
100%), discounted at an annual rate of 10.5%.)(3)
multiplied by 75%...................... = $_________
Less amount of all Indebtedness in respect of Properties
for which the corresponding Lease Value was included
(Schedule 1 attached hereto).................................... = $_________
equals................................................ = $
=========
plus:
(iii) Residual Proceeds (Schedule 2 attached hereto)...................... = $_________
Residual Proceeds = (as of any date, the sum of the projected Net
Cash Proceeds of the Company and the Subsidiaries (with
appropriate adjustments to account for minority interests in
respect of (i) a Project, (ii) the Subsidiary through which such
Project is held and (iii) any Joint Venture Holding) to be
derived from (x) the exercise of a purchase option by a tenant
under a Lease which option has been irrevocably and
unconditionally exercised, the purchase price has been determined
(by appraisal or otherwise), the tenant has no right to elect not
to close and the closing of which is required to occur within
twelve months of the date of determination or (y) an agreement of
sale entered into with a tenant where the purchase price has been
determined, the tenant has no right to terminate the agreement,
there are no conditions to closing thereunder other than delivery
of title and the closing will occur within twelve months of the
date of determination;)(4)
multiplied by 50%.......................................... = $_________
(b) Total Lease Value equals................................................................... = $
=========
</TABLE>
(3) In determining Encumbered Lease Value, income from lease extensions under
any Lease will be included only if the extension right with respect to
such Lease has been unconditionally and irrevocably exercised by the
tenant (or the tenant has lost its rights to terminate the lease prior to
the automatic extension thereof). Encumbered Lease Value shall not include
any amount in respect of an Encumbered Eligible Project unless the
Indebtedness in respect of such Encumbered Eligible Project is less than
or equal to 35% of the Encumbered Lease Value for such Encumbered Eligible
Project. In determining the amount of projected contractual income, net of
projected expenses to be incurred by landlord, from any Eligible Lease,
all amounts attributable to adjustments in rental obligations of a tenant
that are contingent (for example, rental increases based upon a specified
occupancy rate) or otherwise indeterminate (for example, rental increases
based upon index adjustments), shall be excluded.
(4) Provided that Net Cash Proceeds from the exercise of any purchase option
shall be included in the determination of Residual Proceeds only if the
actual price of such option has been determined and the creditworthiness
of the tenant exercising such purchase option shall be satisfactory to the
Administrative Agent in its sole discretion; provided, that any tenant
shall be deemed creditworthy by the Administrative Agent for purposes of
this definition if such tenant has been a tenant under a Lease of the
Property subject to such option or agreement of sale for at least 3 years,
has been timely in its payment of rent and fulfillment of all other
obligations under such Lease for the 12 month-period immediately preceding
the date of determination and is not the subject of any pending
bankruptcy, insolvency or other similar proceeding.
B-3
<PAGE> 94
2. Total Unsecured Outstanding Indebtedness (the portion of Total
Outstanding Indebtedness that is Unsecured Indebtedness)
(a) Total Outstanding Indebtedness is the sum of:
<TABLE>
<S> <C> <C>
(i) As of any date, the sum, without duplication, of (i) the
amount of Indebtedness of the Company and/or its
Subsidiaries set forth on the then most recent quarterly
financial statements of the Company, prepared in accordance
with GAAP, plus any additional Indebtedness incurred by the
Company and/or its Subsidiaries since the time of such
statements (with appropriate adjustments for minority
interests).............................................................. = $__________
plus:
(ii) the outstanding amount of Joint Venture Indebtedness
allocable in accordance with GAAP on account of ownership
of Joint Venture Holdings to any of the Company and/or its
Subsidiaries as of the time of determination (with
appropriate adjustments for minority interests) (Schedule 3
attached
hereto)................................................................. = $___________
plus:
(iii) the Contingent Obligations of the Company and/or its Subsidiaries
and, to the extent allocable to the Company and/or its Subsidiaries
in accordance with GAAP on account of ownership of Joint Venture
Holdings, of the Joint Ventures (with appropriate adjustments for
minority
interests).............................................................. = $___________
(b) Total Outstanding Indebtedness........................................... = $
===========
(c) Portion of Total Outstanding Indebtedness which is Unsecured................................ = $
===========
3. Borrowing Base
(a) Lesser of
(i) $150,000,000.......................................................... $150,000,000
OR;
(ii) Lease Value (Item 1(b))........................................... $___________
minus:
Total Unsecured Outstanding Indebtedness
(Item 2(c)) multiplied by 1.33.................................... $___________
equals..................................................... = $___________
Borrowing Base(5).................................................. = $
===========
</TABLE>
(5) Borrowing Base = Lesser of items 3(a)(i) and 3(a)(ii).
B-4
<PAGE> 95
EXHIBIT C
[Form of Borrowing Request]
__________, 199__
The Chase Manhattan Bank, as Administrative Agent
for the Lenders party to the Credit Agreement
referred to below
380 Madison Avenue
New York, New York 10017
Attention: Charles Hoagland
Ladies and Gentlemen:
Reference is hereby made to that certain Credit Agreement dated as of
March 26, 1998 (as the same may be amended, supplemented, restated or otherwise
modified from time to time, the "Credit Agreement", the terms defined therein
being used herein as therein defined), among Carey Diversified LLC, the Lenders
party thereto, The Chase Manhattan Bank, as Issuing Bank and Administrative
Agent, The Bank of New York, as Documentation Agent, and Chase Securities, Inc.,
as Arranger.
The Borrower hereby gives you notice, irrevocably, pursuant to Section
2.03 of the Credit Agreement that the Borrower hereby requests a Borrowing under
the Credit Agreement and, in that connection, sets forth below the information
relating to such Borrowing (the "Proposed Borrowing") as required pursuant to
the terms of the Credit Agreement:
(i) The funding date (which shall be a Business Day) of the Proposed
Borrowing is ____________, 199__.
(ii) The aggregate amount of the Proposed Borrowing is $__________.(1)
(iii) The Revolving Credit Exposure as of the date of this Notice of
Borrowing is $__________.
(iv) The proposed Borrowing will be a [Eurodollar Revolving Borrowing]
[ABR
(1) Such amount for any Eurodollar Revolving Borrowing must be in
a minimum amount of $3,000,000 and in integral multiples of $500,000 in
excess of that amount. At the time that each ABR Revolving Borrowing is
made, such Borrowing shall be in an aggregate amount that is an
integral multiple of $500,000 and not less than $3,000,000; provided
that an ABR Revolving Borrowing may be in an aggregate amount that is
equal to the entire unused balance of the total Commitments or that is
required to finance the reimbursement of an LC Disbursement.
C-1
<PAGE> 96
Borrowing].
(v) The requested Interest Period for the Proposed Borrowing which is a
Eurodollar Borrowing is from __________ and ending __________ (for a total of
_____ months).(2)
The Borrower hereby directs the Administrative Agent to disburse the
proceeds of the Loans comprising the Proposed Borrowing on the funding date
therefor as set forth on Schedule 1 attached hereto and made a part hereof,
whereupon the proceeds of such Loans shall be deemed received by or for the
benefit of the Borrower.
The Borrower hereby certifies that the conditions precedent contained
in Sections 4.01 and 4.02 of the Credit Agreement are satisfied on the date
hereof and will be satisfied on the funding date of the Proposed Borrowing.
CAREY DIVERSIFIED LLC
By: Carey Management LLC
By:___________________________
Name:
Title:
(2) To be specified if the proposed Borrowing is a Eurodollar Revolving
Borrowing. Such Interest Period must comply with the provisions of Section
2.08 of the Credit Agreement.
C-2
<PAGE> 97
SCHEDULE 1
to
Borrowing Request
dated __________, 199__
[Insert disbursement directions]
C-3
<PAGE> 98
EXHIBIT D
Form of Note
to
Credit Agreement dated as of March 26 , 1998
$__________ New York, New York
March __, 1998
FOR VALUE RECEIVED, Carey Diversified LLC, a Delaware limited
liability company (the "Borrower"), promises to pay to the order of
_______________ (the "Lender"), the unpaid principal amount of each Loan made by
the Lender to the Borrower on the dates and at the rate or rates provided for
pursuant to the Credit Agreement referred to below. The Borrower promises to pay
interest on the unpaid principal amount of each such Loan on the dates and at
the rate or rates provided for in the Credit Agreement. All such payments of
principal and interest shall be made in lawful money of the United States in
Federal or other immediately available funds at the office of the Administrative
Agent (as such terms are defined in the Credit Agreement).
All Loans made by the Lender, the respective types and
maturities thereof and all repayments of the principal thereof shall be recorded
by the Lender and, if the Lender so elects in connection with any transfer or
enforcement hereof, appropriate notations to evidence the foregoing information
with respect to each such Loan then outstanding may be endorsed by the Lender on
the schedule attached hereto, or on a continuation of such schedule attached to
and made a part hereof; provided that the failure of the Lender to make any such
recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Credit Agreement.
This Note is one of the Notes referred to in the Credit
Agreement, dated as of March 26, 1998, among the Borrower, the institutions from
time to time party thereto, The Chase Manhattan Bank, as Administrative Agent,
The Bank of New York, as Documentation Agent, and Chase Securities, Inc., as
Arranger (as the same may be amended, supplemented, restated, or otherwise
modified from time to time, the "Credit Agreement"). Terms defined in the Credit
Agreement are used herein with the same meanings. This Note is secured as
provided in the Security Documents described in the Credit Agreement. Reference
is made to the Credit Agreement for provisions for the prepayment hereof and the
acceleration of the maturity hereof upon the happening of certain events.
D-1
<PAGE> 99
THIS NOTE SHALL BE INTERPRETED, AND THE RIGHTS AND LIABILITIES
OF THE PARTIES HERETO DETERMINED, IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
BORROWER:
Carey Diversified LLC,
a Delaware limited liability company
By: Carey Management LLC
By: _____________________________________
Name: John J. Park
Title: Senior Vice President
D-2
<PAGE> 100
LOANS AND PAYMENTS OF PRINCIPAL
<TABLE>
<CAPTION>
Amount of
Amount of Type of Principal Maturity Notation
Date Loan Loan Repaid Date Made By
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
D-3
<PAGE> 101
EXHIBIT E
PLEDGE AGREEMENT
PLEDGE AGREEMENT
PLEDGE AGREEMENT (as it may be amended, supplemented, or
otherwise modified from time to time, this "Agreement") dated as of March 26,
1998 made by Carey Diversified LLC, a Delaware limited liability company (the
"Company"), in favor of THE CHASE MANHATTAN BANK, as Administrative Agent (in
such capacity, the "Administrative Agent"), for the benefit of the Secured
Parties (as defined in the Credit Agreement referred to below).
Reference is hereby made to the Credit Agreement dated as of
March 26, 1998 (as amended, supplemented, or otherwise modified from time to
time, the "Credit Agreement") among Carey Diversified LLC, the Lenders party
thereto, The Chase Manhattan Bank, as Issuing Bank, and The Chase Manhattan
Bank, as Administrative Agent, and The Bank of New York, as Documentation Agent.
Terms used herein as defined terms and not otherwise defined herein shall have
the meanings given thereto in the Credit Agreement.
The Secured Parties have agreed to make Loans to the
Borrowers, and the Issuing Bank has agreed to issue Letters of Credit for the
account of the Borrowers, pursuant to, and upon the terms and subject to the
conditions specified in, the Credit Agreement. The obligations of the Secured
Parties to make Loans and of the Issuing Bank to issue Letters of Credit are
conditioned on, among other things, the execution and delivery by the Company of
an agreement in the form hereof.
The Company hereby agrees in favor of the Administrative
Agent, for the benefit of the Secured Parties, as follows:
1. Grant of Security Interests; Certain Definitions. As
security for the payment and performance in full of all of the obligations and
liabilities of the Company under any Loan Document to which the Company is a
party (excluding contingent obligations pursuant to Section 9.03 of the Credit
Agreement arising after the termination of the Lenders' Commitments) (the
"Obligations"), the Company does hereby grant to the Administrative Agent, its
successors and assigns, for the benefit of the Secured Parties, a first and
exclusive continuing lien on and security interest in the property and property
rights listed on Schedule I hereto (hereinafter called the "Collateral"). For
purposes of this Agreement, the terms "Subsidiary Partnership" and "Subsidiary
Documents" shall have the meanings given thereto in Schedule I. The Company
shall not grant or suffer to exist any other lien on or security interest in, or
any other claim or encumbrance affecting, the Collateral or any part thereof.
2. Assurances; Subsidiary Documents. (a) At any time and from
time to time, upon demand of the Administrative Agent, at the Company's sole
expense, the Company will give, execute, file and record, or cause the same to
be done by other parties, any and all notices, financing statements, financing
statement amendments, continuation statements, instruments, documents or
agreements that the Administrative Agent may consider reasonably necessary to
create, confirm, preserve, maintain, continue, perfect or validate, or establish
the priority of, the security interest granted hereunder or to enable the
Administrative Agent to exercise or enforce its rights hereunder with respect to
such lien and security interest.
D-4
<PAGE> 102
(b) The Company has heretofore and/or contemporaneously
herewith furnished the Administrative Agent with true and correct copies of the
Subsidiary Documents (including originals of any certificates or other
instruments evidencing or representing any of the Collateral (each in
transferable form, duly endorsed if required or accompanied by executed undated
instruments of transfer in blank)). Without in any way impairing any applicable
restrictions on the rights of any Persons to in any way amend or modify any of
the Subsidiary Documents, the Company agrees promptly to furnish the
Administrative Agent with a copy of any amendment to or other modification of
any of the Subsidiary Documents.
3. Representations; Warranties; Covenants. The Company hereby
represents, warrants and covenants, to and with the Administrative Agent and for
the benefit of the Secured Parties, that:
(a) Except for the security interest granted to the
Administrative Agent hereunder, the Company (i) is and will at all times
continue to be the direct owner, beneficially and of record, of the Collateral
hereunder, (ii) holds in the manner aforesaid the Collateral hereunder free and
clear of all liens, claims, charges, restrictions, encumbrances, security
interests or voting agreements or trusts of any kind or nature, and has not
authorized and will not authorize (except in favor of the Administrative Agent
and the Secured Parties) the filing of any financing statement or other similar
notice, covering the Collateral or any part thereof, and (iii) will not make or
suffer any assignment or pledge, or create or suffer the creation of any lien,
claim, charge, encumbrance or security interest affecting, or voting agreement
or trust with respect to, the Collateral or any part thereof.
(b) Other than the Subsidiary Documents and the Intercompany
Notes, there are no certificates or other instruments or documents evidencing or
representing any of the Collateral, and the Company will cause any and all
instruments, documents, or certificates hereafter issued evidencing or
representing such Collateral (each in transferable form, duly endorsed if
required or accompanied by executed undated instruments of transfer in blank
satisfactory to the Administrative Agent) to be forthwith delivered to and
deposited with the Administrative Agent in pledge hereunder (and held apart
separately in trust for the benefit of the Administrative Agent and the Secured
Parties pending such delivery). There are no certificates or other instruments
or documents evidencing or representing any of the interests in any of the
Subsidiary Partnerships and the interests in the Subsidiary Partnerships have
not been represented by any certificates since the issuance thereof and at all
times subsequent thereto and including the date of this Agreement. The interests
in each of the Subsidiary Partnerships are not "certificated securities" nor are
the interests in the Subsidiary Partnerships credited to a "securities account"
within the meaning of the Uniform Commercial Code. After giving effect to this
Agreement, the Recognition Agreements and the other Loan Documents contemplated
hereby and thereby, no Person other than the Administrative Agent has "control"
within the meaning of Article 8 of the Uniform Commercial Code in respect of
securities if any, issued by any Subsidiary Partnership constituting Collateral.
None of the Subsidiary Partnerships has elected to have the interests in the
Subsidiary Partnerships governed by Article 8 of the Uniform Commercial Code.
The Company shall not permit or suffer (i) the interests in the Subsidiary
Partnerships to be represented by any certificates or otherwise become
"certificated securities" or the interests in the Subsidiary Partnerships to be
credited to a "securities account" within the meaning of the Uniform Commercial
Code or (ii) any Person other than the Administrative Agent to have "control"
within the meaning of Article 8 of the Uniform Commercial Code in respect of
securities, if any, issued by any Subsidiary Partnership constituting
Collateral. The Company will not cause or elect to have the interests in the
Subsidiary Partnerships to be governed by Article 8 of the Uniform Commercial
Code.
- 2 -
<PAGE> 103
(c) The Company (i) has, and at all times will have, good
right and legal authority to grant a security interest in the Collateral in the
manner hereby contemplated and (ii) will defend its and the Administrative
Agent's and the Secured Parties' title and interest thereto or therein, against
any and all attachments, liens, claims, charges, encumbrances, security
interests, agreements, trusts, or other impediments of any nature, however
arising, of all Persons whomsoever.
(d) No consent or approval of any governmental body or
regulatory authority or any securities exchange is necessary for the validity of
the grant of the security interest effected hereby, nor does the entering into
or performance hereunder by the Company constitute a default under the terms of
any indenture, agreement, instrument or document, or any order or decree of any
court, tribunal, or other Person or body, to which the Company is a party or by
which the Company or any Subsidiary Partnership or the property of any thereof
is bound or affected, except as set forth in Section 3.03 of the Credit
Agreement.
(e) The execution and delivery of this Agreement by the
Company is effective to vest in the Administrative Agent for the benefit of the
Secured Parties the rights in the Collateral as set forth herein. Without
limiting the foregoing, upon execution and delivery hereof, the Administrative
Agent shall have a valid and enforceable first priority continuing security
interest in the Collateral and (i) with respect to the portion of the
Collateral, if any, constituting uncertificated securities, upon the due
execution and delivery of each of the Recognition Agreements by each of the
parties thereto; and (ii) with respect to the portion of the Collateral
constituting certificated securities, when certificates representing such
securities, together with undated instruments of transfer duly executed in blank
shall have been delivered to the Administrative Agent; and (iii) with respect to
the portion of the Collateral constituting "accounts" or "general intangibles"
(as defined in Section 9-106 of the Uniform Commercial Code), upon filing of
appropriate Uniform Commercial Code financing statements with the offices(s)
specified in Schedule IV hereto, each such lien will constitute a fully
perfected first priority lien on and security interest in such Collateral, in
each case prior and superior in right to that of any other Person.
(f) Except as set forth in Schedule III, there are no (i)
calls or other required contributions (of cash or other property) or loans or
letters of credit or guaranties or other accommodations for or in respect of
which the Company is obligated, that have not been fully paid, made, or provided
in respect of the Company's interest in each of the Subsidiary Partnerships, or
(ii) loans payable to partners (other than the Company) in any of the Subsidiary
Partnerships except as set forth in the Subsidiary Documents, priorities in the
distribution of assets in favor of any partners (other than the Company) in any
of the Subsidiary Partnerships except as set forth in the Subsidiary Documents,
or any other arrangements involving the Company or between or among any partners
thereof, that would delay, take preference or priority over, or diminish the
percentage (from that in effect on the date hereof) or amount of, distributions
(nonliquidating, liquidating or otherwise) payable by any of the Subsidiary
Partnerships to the Company. The Company hereby agrees not to postpone or
subordinate to any other claim or indebtedness any rights of the Company to be
repaid in respect of any obligation or liability of any Subsidiary Partnership
to the Company.
(g) All necessary action on the part of the Company and any
partner thereof, to authorize the execution, delivery and performance of this
Agreement, and the creation and grant of the security interest hereunder in the
Collateral, has been duly and properly taken and all conditions to the
effectiveness of such security interest have been met. Without limiting the
foregoing, such security interest is permitted under the relevant Subsidiary
Documents and/or has been duly agreed to by all
- 3 -
<PAGE> 104
requisite action by the Subsidiary Partnerships and their partners, free of all
rights of first offer, rights of first refusal, buy/sell arrangements or other
rights of any of the Subsidiary Partnerships or any partner thereof, or any
other restrictions.
(h) There are no actions, suits or proceedings pending or, to
the knowledge of the Company, threatened against or affecting the Company or the
Subsidiary Partnerships, at law or in equity, or before or by any Federal,
state, municipal or other governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, which involve or affect this
Agreement, the Credit Agreement, any other Loan Document or the Collateral, or
which may have a material adverse effect on this Agreement, the Credit
Agreement, any other Loan Document and/or the Collateral.
(i) The principal place of business and chief executive office
of the Company, the office where the records regarding the Collateral, the
federal taxpayer identification number of the Company, and any tradename or
fictitious name under which the Company does business, or has done business at
any time during the period of five (5) years prior to the date hereof, are all
set forth on Schedule V hereto.
(j) The Company agrees that the foregoing representations and
warranties shall be deemed to have been made by it on the date of each Credit
Event on or after the date hereof by the Company under the Credit Agreement on
and as of the date of each such Credit Event as though made hereunder on and as
of the date of such Credit Event.
4. Distributions; Voting Rights; Company Obligations.
(a) Prior to the occurrence of an Event of Default, and after
the cure of such Event of Default, and the reimbursement by the Company of all
expenses incurred by the Administrative Agent and the Secured Parties resulting
from such Event of Default, the Company shall be entitled to receive payments
and distributions from the Subsidiary Partnerships. After written notice by the
Administrative Agent to the Company and the Subsidiary Partnerships, which the
Administrative Agent may give, in its sole discretion, upon the occurrence and
during the continuation of an Event of Default, or automatically, without
notice, in the case of the occurrence of and during the continuance of any Event
of Default under paragraph (h) or (i) of Article VII of the Credit Agreement,
all rights of the Company to receive payments and distributions (to be applied
in accordance with Section 8) under the preceding sentence shall cease, and all
such rights shall thereupon become vested in the Administrative Agent, which
shall have the sole and exclusive right and authority to receive and retain such
payments and distributions, it being further agreed that if any such
distribution is in the form of property other than cash, the Administrative
Agent may sell such property or any part thereof in accordance with Section 7
and apply the proceeds of sale in accordance with Section 8. The Administrative
Agent shall have the sole and exclusive right to receive and retain any payment
or distribution arising in respect of any payments and distributions received by
the Company or paid or made after the Company's rights to receive the same shall
have ceased under the preceding sentence, all of which shall be applied by the
Administrative Agent in accordance with Section 8. Any amounts paid or
distributed to the Company notwithstanding the preceding sentences of this
paragraph shall forthwith be delivered to the Administrative Agent in the form
received (except for the appropriate endorsement of any checks and except for
any other appropriate instruments of transfer), and all such amounts distributed
to the Company shall be received and held apart separately in trust for the
benefit of the Administrative Agent and the Secured Parties pending such
delivery. The Company hereby authorizes the Administrative Agent, at any time
after the occurrence and during the continuation of an Event of Default, to give
notice
- 4 -
<PAGE> 105
to the Subsidiary Partnerships that all payments and distributions in respect of
the partnership interests of the Company in the Subsidiary Partnerships, or
otherwise in respect of the Collateral, are to be made directly to the
Administrative Agent until written notice by the Administrative Agent to the
contrary.
(b) Prior to the occurrence of an Event of Default, and after
the cure of such Event of Default, and the reimbursement by the Company of all
expenses incurred by the Administrative Agent and the Secured Parties resulting
from such Event of Default, the Company shall be entitled to exercise any and
all voting and other consent rights, if any, pertaining to the Collateral or any
part thereof; provided that the Company shall not vote or exercise any right or
prerogative as a partner of the Subsidiary Partnerships in a manner detrimental
to the security interest of the Administrative Agent hereunder or in a manner
inconsistent in any material respect with the rights of the Administrative Agent
hereunder, or for any purpose not consistent with the terms of this Agreement
and the Credit Agreement; and provided that the foregoing shall be subject in
all respects to Section 5(a). Upon the occurrence and during the continuation of
an Event of Default, upon written notice from the Administrative Agent to the
Company, or automatically, without notice, in the case of any Event of Default
under paragraphs (h) or (i) of Article VII of the Credit Agreement, all rights
of the Company to exercise the foregoing voting and other consent rights, if
any, that it would otherwise be entitled to exercise pursuant to the preceding
sentence shall cease, and all such voting and consent rights shall thereupon, at
the written election of the Administrative Agent, be subject in each instance to
the prior approval of the Administrative Agent, except that the Company may at
any time exercise any voting right required in order to cause any Subsidiary
Partnership to become a Borrower under the Credit Agreement.
(c) Notwithstanding anything contained elsewhere herein, this
Agreement shall not in any way be deemed to obligate the Administrative Agent or
any Secured Party, or any purchaser at a foreclosure or other sale or
disposition of any Collateral, or any other transferee of the Administrative
Agent to assume any of the Company's obligations, duties, expenses or
liabilities in respect of the Collateral (collectively, "Company Obligations")
unless the Administrative Agent, or any such purchaser or other transferee,
otherwise expressly agrees to assume any or all of said Company Obligations in
writing. The Company agrees that it shall perform all its obligations as a
partner of the Subsidiary Partnerships (except to the extent that performance
thereof would contravene the terms or provisions of any Loan Document). In the
event of a foreclosure or other sale or disposition by the Administrative Agent,
the Company shall remain bound and obligated to perform the Company Obligations,
which have accrued prior to the foreclosure or other sale or disposition, and
the Administrative Agent and the Secured Parties, shall not be deemed to have
assumed any of such Company Obligations except as provided in the preceding
sentence.
5. Additional Covenants. The Company hereby covenants and agrees:
(a) that it will not, without the prior written consent of the
Administrative Agent (which may be given or withheld in its sole discretion)
vote for, enable, agree to or take any other action to permit (i) any material
amendment or modification to the Subsidiary Documents (including, without
limitation, any amendment or modification that could affect the treatment of the
Collateral under the Uniform Commercial Code or the perfection or priority of
the security interest therein granted under this Agreement) or (ii) any
Subsidiary Partnership to issue any partnership interests or other equity
securities of any nature or to issue any other securities convertible into or
granting the right to purchase or exchange for any partnership interests or
other equity securities of any nature of such Subsidiary Partnership, except
that the Company may at any time exercise any voting right required in order to
cause any Subsidiary Partnership to become a Borrower under the Credit
Agreement;
- 5 -
<PAGE> 106
(b) to give the Administrative Agent notice of (i) any notice
it has received regarding any sale or other disposition of assets, financing,
refinancing, condemnation, claim for insurance benefits, or other similar event
in respect of any of the Subsidiary Partnerships, or any of their subsidiaries,
and (ii) any call for any contribution to be made by the Company of cash or
other property to the Subsidiary Partnerships or for the Company to provide any
guaranty, letter of credit, or other accommodation in respect of any of the
Subsidiary Partnerships, or any of their subsidiaries, or their respective
obligations;
(c) that, to the extent permitted by law, the Administrative
Agent may file without the signature of the Company Uniform Commercial Code
financing statements and continuations and amendments thereof in respect of the
security interest hereunder, and that photographic or other reproductions of
this Agreement or of any financing statement or continuation thereof shall be
sufficient as a financing statement or continuation thereof;
(d) that the Company will give the Administrative Agent 30
days' prior notice of any change of principal place of business, chief executive
office, place where books and records covering the Collateral are kept, name,
identity, taxpayer identification number or change of structure in respect of
itself or the Subsidiary Partnerships, including, without limitation, notice of
any merger or consolidation to which the Company is a party, or of any other
event that might result in an impairment of the effectiveness of any Uniform
Commercial Code filing in respect of the Collateral;
(e) that the Company will defend the right, title and interest
of the Administrative Agent and the Secured Parties in and to the Collateral
against the claims and demands of all Persons whomsoever; and
(f) that at any time and from time to time, upon the written
request of the Administrative Agent, and at the sole expense of the Company, the
Company will promptly and duly execute and deliver such further instruments and
documents and take such further actions as the Administrative Agent may
reasonably request for the purposes of obtaining or preserving the full benefits
of this Agreement and of the rights and powers herein granted. If any amount
payable under or in connection with any of the Collateral shall be or become
evidenced by any promissory note, other instrument or chattel paper or
certificate, such note, instrument or chattel paper or certificate shall be
immediately delivered to the Administrative Agent, duly endorsed in a manner
satisfactory to the Administrative Agent, to be held as Collateral pursuant to
this Pledge Agreement. In the event that such promissory note, other instrument
or chattel paper or certificate is not delivered, the Company agrees to hold
such in trust for the benefit of the Administrative Agent and the Secured
Parties.
6. Costs and Expenses. The Company agrees that in the event that
the Administrative Agent shall retain or engage an attorney or attorneys to
collect or enforce or protect its and the Secured Parties' interests in respect
of the Collateral or this Agreement, including, without limitation, to advise
the Administrative Agent regarding its rights hereunder or under any instrument
or document referred to herein or delivered pursuant to this Agreement, or to
protect any of its rights with respect thereto, the Company shall pay on demand
all of the reasonable costs and expenses of such collection, enforcement,
protection, or advice, including reasonable attorneys' fees and disbursements
and reasonably allocated costs of internal counsel, and the Administrative Agent
may take judgment for all such amounts.
- 6 -
<PAGE> 107
7. Event of Default. Upon the occurrence and during the
continuation of an Event of Default, the Administrative Agent may (without any
obligation to seek performance of any guarantee or other accommodation in favor
of the Administrative Agent and the Secured Parties in respect of any
Obligations or to resort to any other security, right or remedy granted to it
under any other instrument or agreement, including, without limitation, any
other Loan Document or other instrument or agreement referred to herein) sell
the Collateral, or any part thereof, at public or private sale for cash, or upon
credit or for future delivery, as the Administrative Agent shall deem
appropriate. The Administrative Agent shall be authorized at any such sale (if
it deems it advisable to do so) to restrict the prospective bidders or
purchasers to Persons who will represent and agree that they are purchasing part
or all of the Collateral for their own account for investment and not with a
view to the distribution or sale thereof, and upon consummation of any such sale
the Administrative Agent shall have the right to assign, transfer and deliver to
the purchaser or purchasers thereof such of the Collateral so sold. Each such
purchaser at any such sale shall hold the property sold absolutely, free from
any claim or right on the part of the Company or any other partner of any
Subsidiary Partnership, and the Company hereby waives (to the fullest extent
permitted by law) all rights of redemption, stay and appraisal which the Company
now has or may at any time in the future have under any rule of law or statute
now existing or hereafter enacted. The Administrative Agent shall deal with
Collateral in its possession in the same manner as it deals with similar
property for its own account.
If notice is required, the Administrative Agent shall give the Company
at least 10 days' written notice (which the Company agrees is reasonable notice
within the meaning of Section 9-504(3) of the Uniform Commercial Code and any
other applicable law) of the Administrative Agent's intention to make any sale
of any of the Collateral. Such notice, in the case of a public sale, shall state
the time and place for such sale. Any such public sale shall be held at such
time or times within ordinary business hours and at such place or places as the
Administrative Agent may fix and state in the notice of such sale. At any such
sale, the Collateral, or portion thereof, to be sold may be sold in one lot as
an entirety or in separate parcels, as the Administrative Agent may (in its sole
and absolute discretion) determine. The Administrative Agent shall not be
obligated to make any sale of the Collateral or any part thereof if it shall
determine not to do so, regardless of the fact that notice of sale of such of
the Collateral shall have been given. The Administrative Agent may, without
notice or publication, adjourn any public or private sale or cause the same to
be adjourned from time to time by announcement at the time and place fixed for
sale, and such sale may, without further notice, be made at the time and place
to which the same was so adjourned. In case any sale of all or any part of the
Collateral is made on credit or for future delivery, the Collateral or any part
thereof so sold may be retained by the Administrative Agent until the sale price
is paid by the purchaser or purchasers thereof, but the Administrative Agent and
the Secured Parties shall not incur any liability in case any such purchaser or
purchasers shall fail to take up and pay for the Collateral or any part thereof
so sold and, in case of any such failure, such Collateral or any part thereof
may be sold again upon like notice, and in no event shall any portion of the
proceeds of any such sale be credited against payment of the costs, expenses and
obligations set forth in Section 8 until cash payment for the Collateral or any
part thereof so sold has been received by the Administrative Agent. At any
public or private sale of any of the Collateral, the Administrative Agent or any
Secured Party may bid for or purchase, free (to the fullest extent permitted by
law) from any equity or right of redemption, stay or appraisal on the part of
the Company with respect to the Collateral (all said rights being also hereby
waived and released to the fullest extent permitted by law), all of the
Collateral or any part thereof offered for sale and may make payment on account
thereof by using any claim then due and payable to the Administrative Agent in
respect of any of the Obligations as a credit against the purchase price, and
the Administrative Agent may, upon compliance with the terms of sale, hold,
retain and dispose of such property without further accountability to the
Company therefor. Without limiting the generality of the
- 7 -
<PAGE> 108
foregoing, the Company agrees that it shall be commercially reasonable for the
Administrative Agent to sell the Collateral to another partner of any of the
Subsidiary Partnerships. For purposes hereof, a written agreement to purchase
the Collateral or any portion thereof shall be treated as a sale thereof; the
Administrative Agent shall be free to carry out such sale pursuant to such
agreement, and the Company shall not be entitled to the return of the Collateral
or any portion thereof subject thereto, notwithstanding the fact that after the
Administrative Agent shall have entered into such an agreement all Events of
Default shall have been remedied and the Obligations paid in full. As an
alternative to exercising the power of sale herein conferred upon it, the
Administrative Agent may proceed by a suit or suits at law or in equity to
foreclose upon and to sell the Collateral or any portion thereof pursuant to a
judgment or decree of a court or courts having competent jurisdiction or
pursuant to a proceeding by a court-appointed receiver. Any sale pursuant to the
provisions of this Section shall be deemed to conform to the standards of
commercial reasonableness as provided in the Uniform Commercial Code or other
applicable law.
8. Application. The proceeds of any sale of any of the Collateral
pursuant to Section 7, any amounts received by the Administrative Agent under
Section 4(a), any other amounts received by the Administrative Agent in respect
of the Collateral, as well as any Collateral consisting of cash, shall be
applied by the Administrative Agent as follows:
FIRST, to the payment of all reasonable costs and expenses incurred by
the Administrative Agent in connection with such sale or otherwise in connection
with this Agreement or any of the Obligations, including, but not limited to,
all court costs and the reasonable fees and expenses of its experts, agents and
legal counsel (including reasonably allocated costs of internal counsel), the
repayment of all advances made by the Administrative Agent on behalf of the
Company or to protect the Collateral and/or the rights of the Administrative
Agent therein, and any other costs or expenses incurred in connection with the
reasonable exercise of any right or remedy hereunder;
SECOND, to the payment in full of the Obligations as provided in the
Credit Agreement;
THIRD, to the payment of the Obligations (other than those referred to
in FIRST and SECOND above) owing to the Administrative Agent for its own account
as Administrative Agent or otherwise; and
FOURTH, to the Company, its successors or assigns, subject to any
provision of law, or as a court of competent jurisdiction may otherwise direct.
The Administrative Agent shall have absolute discretion as to the time
of application of any such proceeds or other amounts. Upon any sale of the
Collateral by the Administrative Agent (including pursuant to a power of sale
granted by statute or under a judicial proceeding), the receipt by the
Administrative Agent or by the officer making the sale shall be a sufficient
discharge to the purchaser or purchasers of the Collateral so sold and such
purchaser or purchasers shall not be obligated to see to the application of any
part of the purchase money paid over to the Administrative Agent or such officer
or be answerable in any way for the misapplication thereof.
9. Attorney in Fact. The Company hereby appoints the
Administrative Agent the attorney-in-fact of the Company for the purpose of
carrying out any of the actions specified in the next sentence and executing any
instrument that the Administrative Agent may deem necessary or advisable to
accomplish the purposes hereof, which appointment is irrevocable and coupled
with an interest, any
- 8 -
<PAGE> 109
proxy or proxies heretofore given by the Company to any other Person being
hereby revoked. Without limiting the generality of the foregoing, the
Administrative Agent shall have the right, with full power of substitution
either in the Administrative Agent's name or in the name of the Company, to
execute, acknowledge, deliver, and record or file all documents, instruments,
agreements, financing statements and schedules or exhibits thereto in order to
preserve and perfect the security interest granted hereunder, and to ask for,
demand, sue for, collect, receive, receipt and give acquittance for any and all
moneys due or to become due under and by virtue of any of the Collateral, to
endorse checks, drafts, orders and other instruments for the payment of money
payable to the Company representing any distribution or other amount payable in
respect of the Collateral or any part thereof or on account thereof and to give
full discharge for the same, to settle, compromise, prosecute or defend any
action, claim or proceeding with respect thereto, and to sell, assign, endorse,
pledge, transfer and make any agreement respecting, or otherwise deal with, the
same; provided, however, that nothing contained in this Agreement shall be
construed as requiring or obligating the Administrative Agent or any Secured
Party to make any payment to any party in respect of the Collateral, or to make
any inquiry as to the nature or sufficiency of any payment received by the
Administrative Agent, or to present or file any claim or notice, or to take any
action with respect to the Collateral (or any other collateral for or any
guarantee in respect of any of the Obligations) or any part thereof or the
moneys due or to become due in respect thereof or any property covered thereby,
or to extend any credit or accommodation thereof to any party, and no action
taken by the Administrative Agent or omitted to be taken with respect to the
Collateral (or any other collateral for or any guarantee in respect of any of
the Obligations) or any part thereof shall give rise to any defense,
counterclaim or offset in favor of the Company or any of the Subsidiary
Partnerships or any guarantor of any of the Obligations or to any claim or
action against the Administrative Agent or any Secured Party, in the absence of
the gross negligence or willful misconduct of the Administrative Agent or such
Secured Party. The Company's appointment of the Administrative Agent as
attorney-in-fact, and the Administrative Agent's right to execute, acknowledge,
perform, deliver, record, or file documents (including the making of Uniform
Commercial Code financing statement filings without the signature of the
Company) and to endorse checks, drafts, orders and other instruments for the
payment of money payable to the Company representing any distribution or other
amount payable in respect of the Collateral or any part thereof or on account
thereof, shall commence on the date hereof. The Administrative Agent may perform
any duties hereunder either directly or by or through agents or attorneys, and
the Administrative Agent shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder. In furtherance thereof, any subsidiary owned or controlled by the
Administrative Agent, or its successors, as agent for the Administrative Agent,
may perform any or all of the duties of the Administrative Agent relating to the
valuation of securities and other instruments constituting Collateral hereunder.
10. No Obligation of Administrative Agent. The powers conferred on
the Administrative Agent hereunder are solely to protect its interest in the
Collateral and shall not impose any duty upon it to exercise any such powers.
The Administrative Agent may, in its sole and absolute discretion, but with no
obligation whatsoever to do so, expend or invest moneys to cure a default by the
Company as a partner of any of the Subsidiary Partnerships or otherwise protect
the Collateral. Except for the exercise of reasonable care in the custody of any
Collateral in its possession and the accounting for monies actually received by
it hereunder and the obligations of the Administrative Agent under Article 8,
the Administrative Agent shall have no duty as to any Collateral or as to the
taking of any necessary steps to preserve rights against prior parties or any
other rights pertaining to any Collateral. The Administrative Agent shall not be
responsible for the validity, sufficiency, collectibility or marketability of
any Collateral given to or held by it hereunder or for the validity or
sufficiency of the Credit Agreement or the Lien on the Collateral purported to
be created hereby.
- 9 -
<PAGE> 110
11. No Waiver. No failure on the part of the Administrative Agent
to exercise, and no delay in exercising, any right, power or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, power or remedy by the Administrative Agent preclude any other
or further exercise thereof or the exercise of any other right, power or remedy.
All rights and remedies of the Administrative Agent hereunder are cumulative and
are not exclusive of any other rights or remedies provided by law or otherwise.
The Administrative Agent shall not be deemed to have waived any rights hereunder
or under any other agreement or instrument unless such waiver shall be in
writing and signed by the Administrative Agent subject to requisite Lender
approval under the Loan Documents.
12. Securities Act and Related Matters. The Company understands
and acknowledges that compliance with certain prohibitions contained in the
Securities Act of 1933, as amended, and applicable state securities laws, might
very strictly limit the course of conduct of the Administrative Agent if the
Administrative Agent were to attempt to dispose of all or any part of the
Collateral, and might also limit the extent to which or the manner in which any
subsequent transferee of any Collateral could dispose of the same, including,
without limitation, to limit purchasers to those who agree to acquire the
Collateral for their own account, for investment and not with a view to the
resale or distribution thereof. The Company acknowledges that any such sales may
be at prices and on terms less favorable to the Administrative Agent than might
be achieved through a public sale without restrictions (including in a public
offering through a registration statement) and the Company agrees that any such
private sale shall be deemed to have been made in a commercially reasonable
manner notwithstanding the failure to effect such registration (whether or not
available) or otherwise offer the Collateral at a public sale. The Company
confirms that the Administrative Agent shall have sole and absolute discretion
in determining the type and conduct of all public and private sales of
Collateral (or any part thereof), in any manner and under any circumstances the
Administrative Agent may choose; and the Company clearly understands that
neither the Administrative Agent nor any agent of the Administrative Agent nor
any Secured Party is to have any such general duty or obligation to the Company,
and the Company will not attempt to hold the Administrative Agent or any agent
of the Administrative Agent or any Secured Party responsible for the sale of all
or any part of the Collateral at an inadequate price, even if the Administrative
Agent shall accept the first offer received or fail to approach more than one
possible purchaser, so long as the Administrative Agent has otherwise complied
with the requirements of this Agreement regarding such sale. Without limiting
the generality of the foregoing, the provisions of this Section would apply if,
for example, the Administrative Agent were to place all or any part of the
Collateral for private placement by an investment banking firm, or if such
investment banking firm purchased all or any part of the Collateral for its own
account, or if the Administrative Agent placed all or any part of the Collateral
privately with a purchaser or purchasers (including a customer of the
Administrative Agent). The provisions of this Section will apply notwithstanding
the existence of a public or private market upon which the quotations of sales
prices may exceed substantially the price at which the Administrative Agent
sells.
13. No Discharge of Company; No Assumption of Company Liabilities.
All rights of the Administrative Agent hereunder, the grant of the security
interest in the Collateral, and all Obligations of the Company hereunder, shall
be absolute and unconditional (subject to the terms of this Agreement),
irrespective of (i) any lack of validity or enforceability of the Credit
Agreement, any other Loan Document or any other agreement or instrument with
respect to any of the Obligations or of any other agreement or instrument
relating to any of the foregoing, (ii) any change in the time, manner or place
of payment of, or in any other term of, all or any part of the Obligations,
including, without limitation, any increase in amount, extension of the time of
payment of all or any amount due thereunder,
- 10 -
<PAGE> 111
any change in interest rates applicable thereto, any subordination thereof or of
other obligations thereto, or renewal of all or any thereof, or any other
amendment or waiver of or any consent to any departure from the terms of the
Credit Agreement or any other Loan Document, or any other agreement or
instrument, (iii) any exchange, release or nonperfection of any collateral
security in respect thereof, or any release or amendment or waiver of or
departure from any guarantee of all or any of the Obligations or the failure to
enforce any such collateral security or guarantee, (iv) any change in the
structure or tax characterization of the Company, or any transaction (including
any merger or consolidation) to which it may be a party (in each case whether or
not permitted under the Loan Documents), or (v) any other circumstance which
might otherwise constitute a defense available to, or a discharge, release, or
exoneration of, any Person in respect of the Obligations or in respect of this
Agreement, other than the final and indefeasible cash payment in full of the
Obligations. Nothing in this Agreement shall cause or obligate the
Administrative Agent or any Secured Party to assume or otherwise be or become
liable for any of the Company's obligations, liabilities, duties, expenses, or
costs in respect of any Collateral, under any Subsidiary Documents or under law
in respect of the Company or of any of the Subsidiary Partnerships. In no event
shall the Administrative Agent or any Secured Party be personally liable for any
taxes or other governmental charges imposed upon or in respect of (i) the
Collateral or (ii) the income or other distributions thereof.
14. Further Waivers. The Company hereby waives presentment,
demand, and protest (to the fullest extent permitted by applicable law) of any
kind in connection with this Agreement or any Collateral. Except notices which
are expressly provided for herein, the Company hereby waives notice (to the
fullest extent permitted by applicable law) of any kind in connection with this
Agreement. The Company hereby further waives any claims of any nature whatsoever
against the Administrative Agent (and its directors, shareholders or controlling
Persons, officers, employees, agents, nominees, counsel and each of them)
arising out of or related to the sale or transfer of the Collateral in
accordance with this Agreement or applicable law, notwithstanding that such sale
or transfer occurred at such time or in such a manner as to directly or
indirectly decrease the purchase price required to be paid for the Collateral.
The Administrative Agent shall not be liable with respect to any action taken,
suffered or omitted by it in good faith reasonably believed by it to be
authorized or within the discretion or rights or powers conferred on it by this
Agreement so long as such action is in accordance with this Agreement. The
Administrative Agent shall not be liable for any error of judgment made in good
faith by any of its officers, unless the Administrative Agent was grossly
negligent in ascertaining the pertinent facts. In the absence of bad faith on
its part, the Administrative Agent may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon any note,
notice, resolution, consent, certificate, affidavit, letter, telegram, teletype
message, statement, order or other document believed by it to be genuine and
correct and to have been signed or sent by the proper Person or Persons.
15. Termination and Release. This Agreement shall terminate (i) as
provided in Section 2.05 of the Credit Agreement or (ii) when all the
Obligations have been finally and indefeasibly paid in full in cash, in either
case at which time the Administrative Agent shall reassign and deliver to the
Company, or to such Person or Persons as the Company shall designate, against
receipt, such of the Collateral (if any) as shall not have been sold or
otherwise applied by the Administrative Agent pursuant to the terms hereof and
shall still be held by it hereunder, together with appropriate instruments of
reassignment and release; provided, however, that all indemnities of the Company
and obligations to reimburse expenses to the Administrative Agent contained in
this Agreement shall survive, and remain operative and in full force and effect
regardless of, the termination of this Agreement. Any such reassignment shall be
without recourse to or representation or warranty by the Administrative Agent
and
- 11 -
<PAGE> 112
solely at the expense of the Company. The Administrative Agent will release the
security interest hereunder in any Collateral as to which such release is
required by the terms of the Credit Agreement.
16. Rights Absolute. All rights of the Administrative Agent
hereunder, the security interest granted hereunder, and the obligations of the
Company under this Agreement shall be absolute and unconditional (subject to the
terms of this Agreement) and shall remain in full force and effect without
regard to, and shall not be released, discharged or in any way diminished by (i)
any lack of validity or enforceability of the Credit Agreement, any other Loan
Document (including this Agreement), any agreement with respect to any of the
Obligations or any other agreement or instrument relating to any of the
foregoing, (ii) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations or any other amendment or waiver of
or any consent to any departure from the Credit Agreement, any other Loan
Document or any other agreement or instrument relating to the foregoing, (iii)
any exchange, release or nonperfection of any Collateral, or any release or
amendment or waiver of or consent to or departure from any guarantee, for all or
any of the Obligations, (iv) any exercise or nonexercise by the Administrative
Agent of any right, remedy, power or privilege under or in respect of this
Agreement, any other Loan Document or applicable law, including, without
limitation, any failure by the Administrative Agent to set off or release in
whole or in part any balance of any deposit account or credit on its books in
favor of any Borrower any waiver, consent, extension, indulgence or other action
or inaction in respect of any thereof, or (v) any other act or thing or omission
or delay to do any other act or thing which may or might in any manner or to any
extent vary the risk of any Borrower would otherwise, but for this specific
provision to the contrary, operate as a discharge of or exonerate the Company as
a matter of law.
17. Amendments; Waivers. No amendment or waiver of any provision
of this Agreement, nor consent to any departure by the Company therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Administrative Agent acting with the consent of the requisite Lenders as set
forth in the Credit Agreement. Any such waiver, consent or approval shall be
effective only in the specific instance and for the purpose for which given. No
notice to or demand on the Company in any case shall entitle the Company to any
other or further notice or demand in the same, similar or other circumstances.
No waiver by the Administrative Agent of any breach or default of or by the
Company under this Agreement shall be deemed a waiver of any other previous
breach or default or any thereafter occurring.
18. Reliance; Survival; Severability. (a) All covenants,
agreements, representations and warranties made by the Company herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Administrative Agent and the Secured Parties and
shall survive the making of the Loans, the execution and delivery to the Secured
Parties of any Notes evidencing such Loans, and the issuance of any Letter of
Credit, regardless of any investigation made by the Administrative Agent or any
Secured Party or on its behalf, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any other fee or
amount payable under this Agreement or any other Loan Document is outstanding
and unpaid.
(b) Any provision of this Agreement that is illegal, invalid
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such illegality, invalidity or unenforceability
without invalidating the remaining provisions hereof or affecting the legality,
validity or enforceability of such provisions in any other jurisdiction. The
parties hereto agree to negotiate in good faith to replace any illegal, invalid
or unenforceable provision of this Agreement with a legal, valid
- 12 -
<PAGE> 113
and enforceable provision that, to the extent possible, will preserve the
economic bargain of this Agreement, or to otherwise amend this Agreement to
achieve such result.
19. Successors and Assigns. Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
successors and assigns of such party; and all covenants, promises and agreements
by or on behalf of the Company or the Administrative Agent that are contained in
this Agreement shall bind and inure to the benefit of their respective
successors and assigns. The Company may not assign or transfer any of its rights
or obligations hereunder or any interest herein or in the Collateral except as
expressly contemplated by this Agreement or the other Loan Documents (and any
such attempted assignment shall be void).
20. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW.
21. Headings. Any Article or Section headings in this Agreement
are for convenience only and shall not affect the construction hereof.
22. Notices. Notices, consents and other communications provided
for herein shall (except as otherwise expressly permitted herein) be in writing
and given as provided in Section 9.01 of the Credit Agreement, except that the
address of the Company for purposes hereof is set forth next to its signature
below. Communications and notices to the Company shall be given to it at its
address set forth in Schedule II hereto.
23. Additional Expenses; Indemnification. (a) The Company agrees
to pay upon demand to the Administrative Agent the amount of any and all
reasonable out-of-pocket expenses, including the reasonable fees and expenses of
its counsel and of any experts or agents, that the Administrative Agent may
incur in connection with (i) the administration of this Agreement, (ii) the
custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Collateral, (iii) the exercise or enforcement of
any of the rights of the Administrative Agent hereunder, or (iv) the failure by
the Company to perform or observe any of the provisions hereof. If the Company
shall fail to do any act or thing that it has covenanted to do hereunder or any
representation or warranty of the Company hereunder shall be breached, the
Administrative Agent may (but shall not be obligated to) do the same or cause it
to be done or remedy any such breach and there shall be added to the Obligations
the cost or expense incurred by the Administrative Agent in so doing.
(b) Without limitation of its indemnification obligations
under the other Loan Documents, the Company agrees to indemnify the
Administrative Agent and its officers, directors, employees, agents, attorneys,
and representatives (all of the foregoing, collectively, the " Indemnitees ")
against, and hold each of them harmless from, any and all losses, claims,
damages, liabilities and related expenses, including reasonable counsel fees and
expenses, incurred by or asserted against any of them arising out of, in any way
connected with, or as a result of, the execution, delivery or performance of
this Agreement or any claim, litigation, investigation or proceeding relating
hereto or to the Collateral, whether or not any Indemnitee is a party thereto,
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
have resulted from the gross negligence or willful misconduct of such
Indemnitee.
- 13 -
<PAGE> 114
(c) Any amounts payable as provided hereunder shall be
additional Obligations secured hereby. The provisions of this Section shall
remain operative and in full force and effect regardless of the termination of
this Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Obligations, the invalidity or unenforceability of any
term or provision of this Agreement or any other Loan Document or any
investigation made by or on behalf of the Administrative Agent. All amounts due
under this Section shall be payable on written demand therefor and shall bear
interest at the default rate (as provided in the Credit Agreement).
24. Counterparts. This Agreement may be executed in separate
counterparts (telecopies of any executed counterpart having the same effect as
manual delivery thereof), each of which shall constitute an original, but all of
which, when taken together, shall constitute but one Agreement.
25. Integration, Submission to Jurisdiction; Consent to Service.
(a) Except as expressly herein provided, this Agreement and the other Loan
Documents constitute the entire agreement among the parties relating to the
subject matter hereof and thereof. Any previous agreement among the parties with
respect to the transactions contemplated hereunder is superseded by this
Agreement and the other Loan Documents. Except as expressly provided herein or
in the other Loan Documents, nothing in this Agreement or in any other Loan
Document, expressed or implied, is intended to confer upon any party, other than
the parties hereto, any rights, remedies, obligations or liabilities under or by
reason of this Agreement or such other Loan Documents.
(b) The Company hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of the
Supreme Court of the State of New York sitting in New York County and of the
United States District Court for the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement, or for recognition or enforcement of any judgment,
and each of the parties hereto hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in such New York State or, to the extent permitted by law, in such
Federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Administrative Agent
may otherwise have to bring any action or proceeding relating to this Agreement
against the Company or its properties in the courts of any jurisdiction.
(c) The Company hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection which
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in any court referred to
in the preceding paragraph. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 22. Nothing in
this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law .
26. Irrevocable Authorization and Instruction to Subsidiary
Partnerships. The Company hereby authorizes and instructs each of the Subsidiary
Partnerships to comply with any
- 14 -
<PAGE> 115
instruction received by it from the Administrative Agent in writing that (a)
states that an Event of Default has occurred and is continuing and (b) is
otherwise in accordance with the terms of this Pledge Agreement, without any
other or further instructions from the Company, and the Company agrees that each
of the Subsidiary Partnerships shall be fully protected in so complying.
27. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
- 15 -
<PAGE> 116
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their duly authorized officers
and delivered as of the day and year first above written.
COMPANY:
CAREY DIVERSIFIED LLC
By: CAREY MANAGEMENT LLC
By: _______________________________
Name: John J. Park
Title: Senior Vice President
SECURED PARTY:
THE CHASE MANHATTAN BANK,
for itself and as Administrative Agent
By: _______________________________
Name: John Mix
Title: Vice President
- 16 -
<PAGE> 117
Schedule I to Pledge Agreement
1. (a) The limited partnership interests of the Company in, and all
other present and future right, title and interest of the Company as a limited
partner of, each of Corporate Property Associates, Corporate Property Associates
2, Corporate Property Associates 3, Corporate Property Associates 4, a
California limited partnership, Corporate Property Associates 5, Corporate
Property Associates 6- a California limited partnership, Corporate Property
Associates 7- a California limited partnership, Corporate Property Associates 8,
L.P., a Delaware limited partnership, and Corporate Property Associates 9, L.P.,
a Delaware limited partnership, and any successor(s) thereto (the "Subsidiary
Partnerships"), in each case as specified in Schedule II (as designated by the
limited partnership units indicated thereon), and the rights, interest, and
benefits in respect thereof of the Company (as a limited partner) arising under
the respective agreements, documents and/or certificates (including, without
limitation, the Amended and Restated Agreement of Limited Partnership of each of
the Subsidiary Partnerships, the certificate of limited partnership of each of
the Subsidiary Partnerships and any other publicly filed documents),
constituting or governing the Subsidiary Partnerships (collectively, the
"Subsidiary Documents"), including, without limitation, any security or other
investment property (as such terms are defined in the Uniform Commercial Code as
in effect in the State of organization of any of the Subsidiary Partnerships)
comprised by any of the foregoing, and all other benefits pertaining thereto
(including all rights, title and interest as a limited partner to participate in
the operation or management of the Subsidiary Partnerships) and any and all
general intangibles and accounts (as such terms are defined in the Uniform
Commercial Code as in effect in the State of New York) now owned or hereafter
arising or acquired relating to the Company's interest (as a limited partner) in
the Subsidiary Partnerships and/or any of the foregoing; including, without
limitation, the Company's right, title and interest now owned or hereafter
acquired, as a limited partner, in and to (i) all distributions by, and any
other payments from, the Subsidiary Partnerships, and all present and future
rights to receive any distributions or other payments from the Subsidiary
Partnerships, whether the same constitute distributions of capital, surplus, or
profits, or derive from any other source, including, without limitation, any
such distribution or payment derived from, representing, based upon, measured
by, or otherwise in respect of, (x) the operating revenues of any of the
Subsidiary Partnerships, or (y) any sale, assignment, transfer, or other
disposition (or transaction having comparable effect) of any assets of any of
the Subsidiary Partnerships, any mortgaging, encumbering, or other financing or
refinancing of any assets of any of the Subsidiary Partnerships, any insurance
proceeds or condemnation awards in respect of any assets of the Subsidiary
Partnerships, any merger, consolidation, or recapitalization of any of the
Subsidiary Partnerships, any redemption or liquidation of the interest of the
Company in any of the Subsidiary Partnerships, or any contribution of any
property to the Subsidiary Partnerships by any member or partner thereof; and
(ii) without limiting clause (i), any other payments or distributions, and any
rights to receive the same, from the Subsidiary Partnerships, in respect of (A)
any sale, assignment, transfer, encumbrance or other disposition (or transaction
having comparable effect) of any partner's interest in the Subsidiary
Partnerships or any rights in respect thereof, and (B) the debt securities of
the Subsidiary Partnerships to the Company specified in Section 2 below and the
instruments representing or evidencing such securities or any debt securities
hereafter obtained that are payable to the Company or otherwise pledged
hereunder and the instruments representing such securities together with any
payments of principal, interest, or of any other character in respect of any
such debt securities and any other debt owed by the Subsidiary Partnerships to
the Company, including, without limitation, all other benefits pertaining
thereto (including all rights, title and interest to such debt securities of the
Subsidiary Partnerships specified in this clause (B)) and any and all general
intangibles and accounts (as such terms are defined in the Uniform Commercial
Code as in effect in the State of New York) now owned or hereafter arising or
acquired by the Subsidiary Partnerships in respect of such debt securities (all
of
<PAGE> 118
which property and rights referred to in this paragraph (a) are referred to
collectively as the "Pledged Property");
(b) any custodial or other safekeeping or similar accounts in which any
of the Pledged Property or any of the property described in the following
paragraph (c) is deposited, any accounts containing or comprising any Pledged
Property and any securities entitlements or other rights in respect thereof;
(c) any general intangibles (as defined in Section 9-106 of the Uniform
Commercial Code) arising out of or constituted by the Subsidiary Partnership
limited partnership interests owned by the Company; and
(d) all of the proceeds, products, rents, issues and profits of any of
the property described in paragraph (a), paragraph (b), paragraph (c) or this
paragraph (d).
2. Debt Securities of Subsidiary Partnerships
Intercompany Note, dated as of March 24, 1998, of
Corporate Property Associates 9, L.P., a Delaware limited
partnership.
- ii -
<PAGE> 119
<TABLE>
<CAPTION>
Percentage of Operating Cash Distribution
-----------------------------------------
Limited Total
Partnership Limited
Type of Limited Units Held Partnership
Partnership Certificate Partnership by Non-CD Units General Special Limited
Subsidiary Partnership Interest No. Units(1) Partners Outstanding Partner Partners Partners(2)
- ---------------------- -------- --------- ----------- ----------- ----------- ------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Corporate Property limited NA 39,490 510 40,000 1% 1% 98%
Associates partner
Corporate Property limited NA 54,227 673 54,900 1% 1% 98%
Associates 2 partner
Corporate Property limited NA 64,878 1,122 66,000 1% 2% 97%
Associates 3 partner
Corporate Property limited NA 83,329 2,199 85,528 1% 6% 93%
Associates 4 - a partner
California limited
partnership
Corporate Property limited NA 111,658 1,542 113,200 1% 6% 93%
Associates 5 - a partner
California limited
partnership
Corporate Property limited NA 47,281 669 47,950 1% 6% 93%
Associates 6 - a partner
California limited
partnership
Corporate Property limited NA 44,197 1,012 45,209 1% 5% 94%
Associates 7 - a partner
California limited
partnership
Corporate Property limited NA 66,094 1,488 67,582 1% 10% 89%
Associates 8, L.P. partner
Corporate Property limited NA 58,990 928 59,918 1% 10% 89%
Associates 9, L.P. partner
</TABLE>
<TABLE>
<CAPTION>
Net Proceeds from Sale of Refinancing
-------------------------------------
Individual
General Special Limited
Subsidiary Partnership Partner Partner(3) Partner
- ---------------------- ------- -------- -------
<S> <C> <C> <C>
Corporate Property 1% 1% 98%
Associates
Corporate Property 1% 1% 98%
Associates 2
Corporate Property 1% 1% 98%
Associates 3
Corporate Property 1% 1% 98%
Associates 4 - a
California limited
partnership
Corporate Property 1% 1% 98%
Associates 5 - a
California limited
partnership
Corporate Property 1% 1% 98%
Associates 6 - a
California limited
partnership
Corporate Property 1% 1% 98%
Associates 7 - a
California limited
partnership
Corporate Property 1% 1% 98%
Associates 8, L.P.
Corporate Property 1% 1% 98%
Associates 9, L.P.
</TABLE>
(1) "Unit" means an interest of a limited partner in a Subsidiary Partnership
representing a specific capital contribution of $500 per unit for each
of Corporate Property Associates, Corporate Property Associates 2,
Corporate Property Associates 3, Corporate Property Associates 4- a
California limited partnership, Corporate Property Associates 5 and a
capital contribution of $1,000 per unit for each of Corporate Property
Associates 6- a California limited partnership, Corporate Property
Associates 7- a California limited partnership, Corporate Property
Associates 8, L.P. and Corporate Property Associates 9, L.P.
(2) Excludes Special Partners
(3) After the Individual Special Partner receives aggregate payments in an
amount specified in each partnership agreement, it will receive no
further distributions of sales or refinancing proceeds and the Limited
Partners will be paid the 1% attributable to the Individual Special
Partner.
<PAGE> 120
Schedule III to Security Agreement
Calls, Contributions, and Other Obligations
None.
Address of Company for Notices
c/o W.P. Carey & Co., Inc.
50 Rockefeller Plaza
2nd Floor
New York, New York 10022
Attn: Steven M. Berzin, Chief Financial Officer
<PAGE> 121
Schedule IV to Pledge Agreement
Offices for Filing Forms UCC-1
Secretary of State of California
Secretary of State
UCC Section
1500 11th Street, Room 255
Sacramento, CA 95814
or
Secretary of State
UCC Section
P.O. Box 942836
Sacramento, CA 94235-0001
Secretary of State of Delaware
Secretary of State
Division of Corporations - UCC Section
John G. Townsend Building
401 Federal Street, Suite 4
Dover, DE 19901
or
Secretary of State
Division of Corporations - UCC Section
P.O. Box 793
Dover, DE 19903
New York Filing Offices
New York State Department of State
Divisions of Corporations, State Records
and Uniform Commercial Code
41 State Street
Albany, New York 12231-0001
New York City Register
31 Chambers Street
New York, NY 10004
- ii -
<PAGE> 122
Schedule V to Security Agreement
Company's Principal Place of Business,
Chief Executive Office and Place Where
Records Regarding Collateral are Kept
50 Rockefeller Plaza
2nd Floor
New York, New York 10022
Company's Taxpayer Identification No.
13-3912578
Tradenames and Fictitious Names of the
Company and Subsidiary Partnerships
None.
- iii -
<PAGE> 123
EXHIBIT F
[Form of]
RECOGNITION AGREEMENT (as it may be amended, supplemented or
otherwise modified from time to time, this "Agreement") dated as of March 26,
1998 by and among CORPORATE PROPERTY ASSOCIATES [ ] L.P, a [California]
[Delaware] limited partnership (the "Partnership"), CAREY DIVERSIFIED LLC, a
Delaware limited liability company and the general partner and a limited partner
of the Partnership (the "Company"), and THE CHASE MANHATTAN BANK, a New York
banking corporation, as administrative agent (in such capacity, the
"Administrative Agent") under the Credit Agreement dated as of March 26, 1998
(as amended, supplemented or otherwise modified from time to time, the "Credit
Agreement") among the Company, as Borrower, the Lenders party thereto and The
Chase Manhattan Bank, as Issuing Agent and Administrative Agent, and The Bank of
New York, as Documentation Agent. Terms used herein as defined terms and not
otherwise defined herein shall have the meanings given to such terms in the
Credit Agreement.
The Company has requested that the Lenders make certain loans
and other extensions of credit to the Company pursuant to the Credit Agreement.
The Company is obligated as a borrower in respect of Obligations under the
Credit Agreement. It is a condition to the making of such requested loans and
other extensions of credit under the Credit Agreement that the Partnership and
the Company (collectively, the "Company Parties") enter into this Agreement with
and in favor of the Administrative Agent for the benefit of the Secured Parties.
NOW, THEREFORE, it is hereby agreed as follows:
1. The Partnership; Interests of the Partnership;
Capacity. Each of the Company Parties jointly and severally represents and
warrants to the Administrative Agent and for the benefit of the Secured Parties
that:
(a) The Partnership is a limited partnership
organized under the laws of the State of [California] [Delaware], existing
pursuant to a Certificate of Limited Partnership filed with the Office of the
Secretary of State of the State of [California] [Delaware] and governed by an
Amended and Restated Agreement of Limited Partnership, dated as of January 1,
1998 (the "Partnership Agreement") (collectively, together with all other
instruments and agreements setting forth the rights of the holders of equity
interests, including all partners, and Persons having any voting, consent, or
management rights, in respect of the Partnership, the "Partnership Documents"),
a true
<PAGE> 124
and correct copy of which, together with all such other Partnership Documents,
as currently in full force and effect, has been delivered by the Company to the
Administrative Agent.
(b) The Company owns 100% of the general partner interests in
the Partnership. The Company, Carey Management LLC, a Delaware limited liability
company and the corporate special partner of the Partnership and the manager of
the Company (the "Manager"), and William Polk Carey, an individual and
individual special partner of the Partnership (the "Individual Special
Partner"), own limited partnership interests in the Partnership as more
particularly described on Schedule 2 to this Agreement. The Manager and the
Individual Special Partner own all of the special limited partnership interests
in the Partnership.
(c) The Company is the only general partner of the
Partnership, and is the only Person having management rights (other than votes
or consents reserved to the limited partners generally) in respect of the
Partnership under the Partnership Documents and under applicable law.
(d) All consents, waivers, acknowledgments, agreements and
other acts by the Company hereunder are made and given in its capacity
as a limited partner (to the extent that it has a limited partnership interest
in the Partnership), in its capacity as a general partner under applicable
limited partnership law, and in its capacity as the general partner under the
Partnership Agreement, except as otherwise set forth herein.
2. Acknowledgment, Waiver and Consent, Amendment, Registration;
additional Parties. (a) The Company, as a limited partner in the Partnership,
hereby gives notice to the Partnership, and the Partnership acknowledges, that
pursuant to that certain Pledge Agreement between the Company and the
Administrative Agent, dated as of March 26, 1998 (as such agreement may be
amended, supplemented or otherwise modified from time to time, the "Pledge
Agreement"), the Company has granted to the Administrative Agent, for the
benefit of the Secured Parties, as collateral security for the payment and
performance of the Obligations, a security interest in, and has pledged to the
Administrative Agent, for the benefit of the Secured Parties, the Collateral
described in the Pledge Agreement, and set forth on Schedule 2 attached hereto
(collectively, the "Collateral"). The Partnership hereby acknowledges receipt of
a copy of the Pledge Agreement.
(b) Each Company Party hereby waives, in favor of the
Administrative Agent, the Secured Parties and the Company, the application of
any provisions of the Partnership Documents restricting the assignment or other
transfer of any interest in the Company or in the Collateral, or any similar or
other restriction under
- 3 -
<PAGE> 125
the Partnership Documents or (to the fullest extent that the same may be waived)
under applicable law, in respect of, and hereby irrevocably consents in all
respects, to (i) the grant by the Company to the Administrative Agent for the
benefit of the Secured Parties of the security interests in the Collateral under
the Pledge Agreement and the pledges of the limited partnership interests held
by the Company in the Partnerships, and any action taken by the Company or the
Administrative Agent to effect or perfect such security interests and pledges;
(ii) any change in the composition of the Lenders or other Secured Parties under
and in accordance with the Credit Agreement by assignment, participation or
otherwise; (iii) any assignment by the Administrative Agent to any successor(s)
in such capacity; (iv) any transfer of any Collateral to any Secured Party or
Affiliate thereof effected to enable such Secured Party or Affiliate to hold,
protect, preserve, or realize upon the Collateral prior or subsequent to an
Event of Default or as a transferee upon any foreclosure or other sale or
disposition of any of the Collateral in accordance with the Pledge Agreement;
and (v) any subsequent sale, assignment, disposition or other transfer referred
to in Section 2(c) hereof.
(c) Each Company Party further consents, in favor of the
Secured Parties and the Company, to (i) any subsequent sale, assignment, or
other transfer by the Administrative Agent, or any other Secured Party or
Affiliate thereof, of all or any of the Collateral acquired by such Secured
Party or Affiliate thereof pursuant to any foreclosure or other sale or
disposition of any of the Collateral in accordance with the Pledge Agreement and
applicable law, and (ii) the admission of any Secured Party or any Person or
Persons becoming the owner of the Collateral after an Event of Default, to the
Partnership, as a limited partner of the Partnership, in accordance with Section
7(b)(ii) hereof, such consent to be deemed given by the Company Parties for all
purposes of the Partnership Documents.
(d) Each Company Party hereby agrees that upon written notice
to the Company from the Administrative Agent that an Event of Default has
occurred and is continuing, the Administrative Agent shall be entitled to sell
or otherwise dispose of, or succeed to or otherwise retain, any and all of the
right, title and interest of the Company as a limited partner in the Partnership
and all other Collateral, all in accordance with the Pledge Agreement, free of
any restrictions on transfer imposed by any provision of the Partnership
Documents, and the Administrative Agent, or any Secured Party or Affiliate
thereof, or any assignee or other transferee or designee thereof, shall be
entitled to be substituted and admitted as a limited partner of the Partnership
as provided in Section 7(b)(ii) hereof.
(e) Each Company Party agrees that this Agreement shall
(without any further act by any Person) constitute the consent and waiver of the
general partner of the Partnership for the benefit of the Secured Parties and
the Company under
- 4 -
<PAGE> 126
the Partnership Documents to the extent that any term or provision thereof
(including, without limitation, Article XV thereof, and any other provision of
the Partnership Agreement that purports to restrict or impose conditions upon
the transfer of any interests in the Partnership or the time of effectiveness
thereof) would otherwise in any way be inconsistent with any term or provision
of, or right or remedy of the Administrative Agent or the Secured Parties, under
the Pledge Agreement, the Credit Agreement or this Agreement. The Partnership
further agrees that this Agreement shall constitute a consent and waiver under
the Partnership Documents of the contemplated pledge of the Company's general
partnership interest in the Partnership pursuant to Section 2.05(c) of the
Credit Agreement to the same extent as the Partnership's consent and waiver
related to the pledge of the Company's interest as a limited partner. The
Partnership further agrees to execute confirmatory instruments to reflect the
same if so requested from time to time by the Administrative Agent (and to file
the same if any inconsistency between this Agreement and any Partnership
Document relates to a filed instrument), as promptly as possible. The execution
of this Agreement by the Company Parties shall constitute their written consent
and prior approval for all purposes of the Partnership Documents and the
Partnership Agreement (to the extent the same may be required under the
Partnership Documents or the Partnership Agreement) to the entering into,
delivery, and performance of any Loan Documents to which any Company Party is a
party, including, without limitation, the making of any guaranty, and to the
assignment or grant of a security interest in or pledge of any property of the
Partnership to secure any obligation of any partner of the Partnership (or any
other party) or any guaranty by the Partnership.
(f) This Agreement constitutes (i) part of the books and
records of the Company Parties, and (ii) the instruction of the Company to the
Partnership to effect the registration on the books and records of the
Partnership of the pledges and security interests under the Pledge Agreement.
The Company and the Partnership each agree to so register such pledges and
security interests.
(g) The Company Parties shall not permit or suffer (x) the
interests in the Partnerships to be represented by any certificates or otherwise
become "certificated securities" within the meaning of the Uniform Commercial
Code or (y) any Person other than the Administrative Agent to have "control"
within the meaning of Article 8 of the Uniform Commercial Code in respect of
securities constituting Collateral.
3. No Other Transfer. Each of the Company Parties represents and
warrants that it has had no notice and has no knowledge of any previous
assignment or encumbrance, or other transfer of any interest of the Company in
the Collateral.
4. Obligations of the Company. (a) The Company represents and
warrants that (i) the Company is not in default of any obligation of the
Partnership as a
- 5 -
<PAGE> 127
general partner or limited partner of the Partnership, (ii) there has not been
any call upon or other obligation of the Company to make any contribution to the
Partnership, or to provide any loan or any guaranty, letter of credit, or other
financial accommodation to the Partnership or in respect of the obligations of
the Partnership, except such as have been made and provided in full, and (iii)
there are no calls for capital or other obligations to which the Partnership may
become subject under the Partnership Documents or any arrangements among
partners that would postpone, take preference or priority over, or otherwise
delay or diminish the percentage or amount of distributions from the Partnership
otherwise payable to the Company.
(b) Each of the Company Parties represents and warrants that
there are no loans or other obligations payable by it to, or other obligations
of the Partnership in favor of, the Partnership arising under the Partnership
Documents.
5. Certain Distributions. It is agreed that the Partnership shall
be entitled to, until written notice referred to in Section 6 hereof from the
Administrative Agent, remit to the Company all distributions and other payments
on account of the Collateral; provided that at all times when and as required by
the Pledge Agreement, amounts distributable or payable to the Company under the
Partnership Documents that are required under the Pledge Agreement to be paid to
the Administrative Agent thereunder shall be remitted directly to the
Administrative Agent to be applied in accordance with the terms of such Pledge
Agreement; and provided further that this Section 5 is in all respects subject
to Section 6 hereof.
6. Notice From Administrative Agent. The Company and the other
Company Parties agree that upon written notice to the Company from the
Administrative Agent that there has occurred and is continuing an Event of
Default, all payments and distributions whatsoever in respect of the Collateral
shall be remitted directly to the Administrative Agent (or as the Administrative
Agent shall otherwise direct in such notice) until written notice to the
contrary is received from the Administrative Agent. The Company hereby
irrevocably directs the Partnership to make payment directly to the
Administrative Agent (or as the Administrative Agent shall otherwise direct)
pursuant to any such written notice, and agrees that neither the Partnership nor
any other Company Party shall have any liability to the Company for honoring any
such written notice from the Administrative Agent, whether or not the Company
may claim, or subsequently establish, that, in respect of the Company, the
Administrative Agent was not entitled to give such notice.
7. No Liability; Information; Admission; Amendments. (a) Except
as otherwise set forth in the Pledge Agreement, each Company Party (i)
acknowledges and agrees that neither the Administrative Agent nor any Secured
Party has assumed, and that
- 6 -
<PAGE> 128
neither the Administrative Agent nor any Secured Party shall as a consequence of
any term or provision of this Agreement or of the Pledge Agreement assume, or be
deemed to have assumed, any obligation or liability of the Company or any other
partner of the Partnership, whether arising under any Partnership Documents,
under any other agreement, or under applicable law, and whether to any creditor
of the Partnership or to any limited partner or general partner of the
Partnership or to any other Person, and (ii) agrees that neither the
Administrative Agent nor any Secured Party shall, by virtue of the possession or
exercise of any rights under the Pledge Agreement, or any rights hereunder, be
obligated as a general partner or limited partner in the Partnership to the
Partnership or to any general partner or limited partner thereof, or be
obligated to any creditor of the Partnership, or to any other Person, for any
contribution of cash or other property, or in respect of any liability of the
Partnership or any general partner or limited partner thereof (whether by way of
indemnity, contribution or otherwise), or to provide any credit to the
Partnership or any accommodation thereof (unless and until the Administrative
Agent or any such Secured Party or other Person at its written election becomes
a partner of the Partnership, in which case such obligations, if any, in respect
of the Partnership, shall arise upon such terms and conditions as shall be
applicable pursuant to the then effective Partnership Documents and/or pursuant
to such other instruments and agreements as shall be executed by the
Administrative Agent or such other Secured Party or other Person in connection
with its becoming a partner thereof).
(b) The Company Parties agree that:
(i) the Administrative Agent (A) shall have the right
hereunder, during normal business hours, to inspect the books and records of the
Partnership, (B) shall, concurrently with the partners of the Partnership,
receive copies of all notices and other information sent to any Company Party as
a partner of the Partnership, and (C) without limiting the foregoing, shall
promptly receive copies of (x) all financial reports prepared in respect of the
Partnership and the Forms K-1 relating to the interests in the Partnership in
which a security interest is granted under the Pledge Agreement and (y) all
amendments to the Partnership Documents;
(ii) after written notice to the Partnership from the
Administrative Agent that there has occurred and is continuing an Event of
Default, the Administrative Agent, on behalf of the Secured Parties and any
Person or Persons becoming the owner of the Collateral after an Event of
Default, shall have, in addition to and not in limitation of the rights under
the preceding clause (i), (A) all rights to information pertaining to the
Partnership and its limited partners and general partners as would be provided
to a general partner or limited partner of a limited partnership under
applicable law in circumstances under which the governing limited partnership
agreement is silent as to such rights; and (B) the option in its sole and
absolute discretion exercisable
- 7 -
<PAGE> 129
by its written notice to the Partnership to such effect, to cause the
substitution of and admission of any Secured Parties or Affiliates, assignees,
other transferees or designees of any Secured Party and any Person or Persons
becoming the owner of the Collateral after an Event of Default as a limited
partner in the Partnership; provided that it is agreed that nothing herein shall
constitute any Secured Party or other Person a partner of the Partnership unless
and until such option is expressly so exercised; and
(iii) without the prior written consent of the
Administrative Agent hereunder, (A) the Partnership Documents shall not be
amended in any respect that is prohibited hereunder or under the Pledge
Agreement, (B) no new general partner shall be admitted the Partnership, nor
shall any Person become a general partner thereof, after the date hereof, (C) no
new equity security or interest in the Partnership having any equity feature
shall be created, (D) the interests in the Partnership of the Company shall not
be diminished or decreased in any other respect, and (E) no other action shall
be taken or any event or circumstance suffered to take place (unless permitted
by the Credit Agreement) if such action, event, or circumstance referred to in
this clause (E) would be reasonably likely to have a dilutive effect on the
interest of the Company in the Partnership.
8. Facilitation of Benefits. The Company Parties further agree,
in order to facilitate the ability of the Administrative Agent for the benefit
of the Secured Parties to realize upon the Collateral in accordance with the
Pledge Agreement in an expeditious manner, that (i) the Partnership shall make
as promptly as possible all such distributions and payments to which the
Administrative Agent would be entitled pursuant to the Pledge Agreement or the
terms hereof (or, should the Administrative Agent, any Secured Party, or any
Affiliate, assignee or other transferee, or designee thereof become the owner of
the Collateral, the Partnership Documents) and (ii) there shall not be
established or maintained reserves in amounts greater than reasonably and
customarily would be established or maintained in good faith under the
circumstances.
9. No Discharge. Each Company Party agrees that notwithstanding
any amendment, modification, or other change hereafter made in the Credit
Agreement, the Pledge Agreement or the terms and provisions applicable to any of
the Obligations or any guaranty of the Obligations, including, without
limitation, any increase of principal amount, changes in interest rates,
extension of maturities, release of collateral security therefor, release of any
guarantor or other surety in respect thereof, or any release or modification of
any rights of any partner of the Partnership or other party to this Agreement,
or any other occurrence that might exonerate or discharge a surety in respect of
any of the Obligations or, but for this specific provision to the contrary,
cause a release of any party hereunder, the obligations, consents, waivers, and
agreements of the Company Parties hereunder shall not be discharged or affected,
nor shall the rights of the Secured Parties or of the Administrative Agent for
the benefit of the Secured Parties
- 8 -
<PAGE> 130
hereunder be limited, and this Agreement shall continue in full force and effect
notwithstanding any such occurrence. Without limiting the generality of the
foregoing, it is specifically agreed that the obligations of the Company Parties
hereunder shall remain in full force and effect (including, without limitation,
the obligations of the Partnership under Section 6 hereof), as independent
obligations of each Company Party, notwithstanding (i) the invalidity or
unenforceability in whole or in part of the Credit Agreement, Pledge Agreement
or any other Loan Document, or (ii) to the fullest extent permitted by law, the
effect of any provisions of any bankruptcy or insolvency laws in respect of any
other Company Party or any other Person.
10. Notices. All notices permitted or required under this
Agreement shall be in writing and shall be given by certified or registered
mail, or recognized overnight courier service, directed to the parties at their
respective addresses set forth on the signature pages hereof, unless notice of a
new address for a party is given by it to the other parties in such manner.
11. Representations and Warranties. Each Company Party represents
and warrants that it has the full power and authority to enter into and perform
this Agreement, and that this Agreement constitutes the valid and binding
obligation of such Company Party enforceable in accordance with its terms
(except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or other laws affecting creditors'
rights generally and to general principles of equity, regardless of whether
considered in a proceeding in equity or at law). Each person executing and
delivering this Agreement in a representative capacity represents and warrants
that such person is duly authorized to act in such capacity on behalf of the
party represented.
12. Injunctive Relief. The parties hereto agree that certain of
the rights of the Administrative Agent hereunder are of a nature such that an
action for damages in connection with the breach thereof by a Company Party
would not provide an adequate remedy for the Administrative Agent and the
Secured Parties, and each Company Party agrees that the Administrative Agent and
the Secured Parties shall be entitled to injunctive relief and specific
performance in the case of a breach or attempted breach of any of the provisions
hereof.
13. Other Parties. This Agreement shall remain the unconditional,
absolute, and irrevocable obligation of each signatory hereto regardless of
whether any other Person (i) becomes a party hereto or to any other Loan
Document (whether or not any Loan Document so requires) or (ii) fails to become
or ceases to be a party hereto or to any other Loan Document (whether or not any
Loan Document requires that such Person be or become a party hereto or thereto).
- 9 -
<PAGE> 131
14. Information. Each Company Party assumes all responsibility for
being and keeping itself informed of the financial condition and assets of the
Partnership, and of all other circumstances bearing upon the risk of nonpayment
of the Obligations, and agrees the Administrative Agent has no duty to advise
any Company Party of information regarding such circumstances or risks.
15. Representations and Warranties in Loan Documents. Each Company
Party represents and warrants that all representations and warranties relating
to it in the Loan Documents are true and correct.
16. Amendments and Waivers. No amendment or waiver of any
provision of this Agreement, nor consent to any departure by any Company Party
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Administrative Agent with the written consent of the Required
Lenders. Any such waiver, consent or approval shall be effective only in the
specific instance and for the purpose for which given. No notice to or demand on
any Company Party in any case shall entitle any Company Party to any other or
further notice or demand in the same, similar or other circumstances. No waiver
of any breach or default of or by any Company Party under this Agreement shall
be deemed a waiver of any other previous breach or default or any thereafter
occurring.
17. Reliance; Unenforceabilily; Termination. (a) All covenants,
agreements, representations and warranties made by the Company Parties herein
and in the certificates or other instruments prepared or delivered in connection
with or pursuant to this Agreement or any other Loan Document (i) shall be
considered to have been relied upon by the Lenders and shall survive the making
by the Lenders of the Loans, and the execution and delivery to the Lenders of
any Notes evidencing such Loans, regardless of any investigation made by the
Lenders or on their behalf, and (ii) shall continue in full force and effect
until termination of the Pledge Agreement in accordance with Section 15 thereof.
(b) Any provision of this Agreement that is illegal, invalid
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such illegality, invalidity or unenforceability
without invalidating the remaining provisions hereof or affecting the legality,
validity or enforceability of such provisions in any other jurisdiction. The
parties hereto agree to negotiate in good faith to replace any illegal, invalid
or unenforceable provision of this Agreement with a legal, valid and enforceable
provision that, to the extent possible, will preserve the economic bargain of
this Agreement, or to otherwise amend this Agreement to achieve such result.
(c) This Agreement shall terminate at such time, if any, as
the Pledge Agreement terminates pursuant to Section 15 thereof.
- 10 -
<PAGE> 132
18. Irrevocable Authorization and Instruction to Partnership. The
Company hereby authorizes and instructs the Partnership to comply with any
instruction received by it from the Administrative Agent in writing that is in
accordance with the terms of this Agreement and the Pledge Agreement, without
any other or further instructions from the Company, and the Company agrees that
the Partnership shall be fully protected in so complying.
19. Successors and Assigns. Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
successors and assigns of such party; and all covenants, promises and agreements
by or on behalf of any Company Party that are contained in this Agreement shall
bind and inure to the benefit of each party hereto and their respective
successors and assigns. No Company Party may assign or transfer any of its
rights or obligations hereunder except as expressly contemplated by this
Agreement and the other Loan Documents (and any such attempted assignment shall
be void).
20. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO
THE PRINCIPLES THEREOF RELATING TO CONFLICT OF LAWS).
21. Headings. The Article and Section headings in this Agreement
are for convenience only and shall not affect the construction hereof. The rules
of interpretation of Section 1.03 of the Credit Agreement shall apply to this
Agreement.
22. Counterparts. This Agreement may be executed in separate
counterparts and by different parties hereto on different counterparts (telecopy
of any executed counterpart having the same effect as manual delivery thereof),
each of which shall constitute an original, but all of which, when taken
together, shall constitute but one Agreement.
23. Jurisdiction. (a) Each Company Party hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court for the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement, or for recognition or enforcement
of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.
- 11 -
<PAGE> 133
Nothing in this Agreement shall affect any right that the Administrative Agent
or any other Secured Party may otherwise have to bring any action or proceeding
relating to this Agreement against any Company Party or its properties in the
courts of any jurisdiction.
(b) Each Company Party hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement in any court
referred to in the preceding paragraph. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
(c) Each Company Party irrevocably consents to service of
process in the manner provided for notices in Section 10 hereof. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
24. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
25. Control Agreement. (a) As used in this Agreement, the term "Control
Collateral" at any time means all Collateral, if any, comprised of limited
partnership interests in the Partnership of which the Company at such time is
the registered owner and which constitute "uncerticated securities" (as that
term is used in Article 8 of the [Delaware][California] Uniform Commercial
Code).
(b) Notwithstanding anything to the contrary in this Agreement, or in
any other agreement or instrument, the Partnership hereby absolutely,
irrevocably and unconditionally agrees that it will comply with "instructions"
(as that term is used in Section 8-106 of the [Delaware][California] Uniform
Commercial Code) originated by
- 12 -
<PAGE> 134
the Administrative Agent without further consent by the Company with respect to
all Control Collateral. The parties intend by this subsection (b) to afford the
Administrative Agent "control" (as that term is used in Article 8 of the
[Delaware][California] Uniform Commercial Code) over the Control Collateral.
This subsection (b) and the other provisions of this Agreement shall be
construed consistently with the foregoing, and this subsection (b) shall
supersede any inconsistent provision of this Agreement or any other agreement or
instrument.
(c) The obligations of the Partnership set forth in subsection (b)
applied only as between the Partnership, on the one hand, and the Administrative
Agent, on the other hand. Nothing in subsection (b) shall be construed to limit
any duty the Administrative Agent may have to the Company or any other Person
(other than the Partnership), pursuant to this Agreement, the Pledge Agreement,
at law, or otherwise, limiting the Administrative Agent's right to give
instructions to the Partnership pursuant to subsection (b).
(d) The obligations of the Partnership under subsection (b) shall
continue in effect until the Administrative Agent notifies the Partnership in
writing that such obligations are to be terminated. The Administrative Agent
hereby agrees with the Company to give such notice to the Partnership upon
termination of the Pledge Agreement.
(e) Nothing in this Section 25 shall be construed (i) to imply that any
limited partnership interests in the Partnership now or hereafter existing are
securities governed by Article 8 of the Uniform Commercial Code of any state.
The provisions of this Section 25 are independent of the other provisions of
this Agreement, shall not be limited by or subject to any other provision of
this Agreement and shall apply notwithstanding any other provision of this
Agreement, and shall survive any termination of this Agreement.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
- 13 -
<PAGE> 135
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective officers as of
the day and year first above written.
Address:
CAREY DIVERSIFIED LLC
c/o W.P. Carey & Co., Inc. (the Company)
50 Rockefeller Plaza
2nd Floor By: Carey Management LLC, a
New York, New York 10022 Delaware limited liability company
Attn: Steven M. Berzin, Chief
Financial Officer
Phone: (212) 492-1100
Telecopy: (212) 977-3022 By:_______________________________
Name: John J. Park
Title: Senior Vice President
Address:
CORPORATE PROPERTY
c/o W.P. Carey & Co., Inc. ASSOCIATES, [ ], L.P.
50 Rockefeller Plaza (the Partnership)
2nd Floor
New York, New York 10022 By: Carey Diversified LLC, a
Attn: Steven M. Berzin, Chief Delaware limited liability company,
Financial Officer its General Partner
Phone: (212) 492-1100
- 14 -
<PAGE> 136
Telecopy: (212) 977-3022 By: Carey Management LLC, a
Delaware limited liability company
By:_______________________________
Name: John J. Park
Title: Senior Vice President
- 15 -
<PAGE> 137
Address:
The Chase Manhattan Bank THE CHASE MANHATTAN BANK, as
380 Madison Avenue Administrative Agent
New York, NY 10017
Attn: By:___________________________
Telephone: (212) 622-3400 Name: John Mix
Telecopier: (212) 622-3783 Title: Vice President
with a copy to:
The Chase Manhattan Bank
270 Park Avenue
New York, NY 10017
Attn:
Telephone: (212) 270-4300
Telecopier: (212) 270-1063
- 16 -
<PAGE> 138
SCHEDULE 1 THE COLLATERAL
1. (a) The limited partnership interests of the Company in, and all other
present and future right, title and interest of the Company as a limited partner
of, each of Corporate Property Associates, Corporate Property Associates 2,
Corporate Property Associates 3, Corporate Property Associates 4, a California
limited partnership, Corporate Property Associates 5, Corporate Property
Associates 6- a California limited partnership, Corporate Property Associates 7-
a California limited partnership, Corporate Property Associates 8, L.P., a
Delaware limited partnership, and Corporate Property Associates 9, L.P., a
Delaware limited partnership, and any successor(s) thereto (the "Subsidiary
Partnerships"), in each case as specified in Schedule 2 (as designated by the
limited partnership units indicated thereon), and the rights, interest, and
benefits in respect thereof of the Company (as a limited partner) arising under
the respective agreements, documents and/or certificates (including, without
limitation, the Amended and Restated Agreement of Limited Partnership of each of
the Subsidiary Partnerships, the certificate of limited partnership of each of
the Subsidiary Partnerships and any other publicly filed documents),
constituting or governing the Subsidiary Partnerships (collectively, the
"Subsidiary Documents"), including, without limitation, any security or other
investment property (as such terms are defined in the Uniform Commercial Code as
in effect in the State of organization of any of the Subsidiary Partnerships)
comprised by any of the foregoing, and all other benefits pertaining thereto
(including all rights, title and interest as a limited partner to participate in
the operation or management of the Subsidiary Partnerships) and any and all
general intangibles and accounts (as such terms are defined in the Uniform
Commercial Code as in effect in the State of New York) now owned or hereafter
arising or acquired relating to the Company's interest (as a limited partner) in
the Subsidiary Partnerships and/or any of the foregoing; including, without
limitation, the Company's right, title and interest now owned or hereafter
acquired, as a limited partner, in and to (i) all distributions by, and any
other payments from, the Subsidiary Partnerships, and all present and future
rights to receive any distributions or other payments from the Subsidiary
Partnerships, whether the same constitute distributions of capital, surplus, or
profits, or derive from any other source, including, without limitation, any
such distribution or payment derived from, representing, based upon, measured
by, or otherwise in respect of, (x) the operating revenues of any of the
Subsidiary Partnerships, or (y) any sale, assignment, transfer, or other
disposition (or transaction having comparable effect) of any assets of any of
the Subsidiary Partnerships, any mortgaging, encumbering, or other financing or
refinancing of any assets of any of the Subsidiary Partnerships, any insurance
proceeds or condemnation awards in respect of any assets of the Subsidiary
Partnerships, any merger, consolidation, or recapitalization of any of the
Subsidiary Partnerships, any redemption or liquidation of the interest of the
Company in any of the Subsidiary Partnerships, or any contribution of any
property to the Subsidiary Partnerships by any member or partner thereof; and
(ii) without limiting clause (i), any other payments or distributions, and any
rights to receive the same, from the Subsidiary Partnerships, in respect of (A)
any sale, assignment, transfer, encumbrance or other disposition (or transaction
having comparable effect) of any partner's interest in the Subsidiary
Partnerships or any rights in respect thereof, and (B) the debt securities of
the Subsidiary Partnerships to the Company specified in Section 2 below and the
instruments representing or evidencing such securities or any debt securities
hereafter obtained that are payable to the Company or otherwise pledged
hereunder and the instruments representing such securities together with any
payments of principal, interest, or of any other character in respect of any
such debt securities and any other debt owed by the Subsidiary Partnerships to
the Company, including, without limitation, all other benefits pertaining
thereto (including all rights, title and interest to such debt securities of the
Subsidiary Partnerships specified in this clause (B)) and any and all general
intangibles and accounts (as such terms are defined in the Uniform Commercial
Code as in effect in the State of New York) now owned or
<PAGE> 139
hereafter arising or acquired by the Subsidiary Partnerships in respect of such
debt securities (all of which property and rights referred to in this paragraph
(a) are referred to collectively as the "Pledged Property");
(b) any custodial or other safekeeping or similar accounts in which any
of the Pledged Property or any of the property described in the following
paragraph (c) is deposited, any accounts containing or comprising any Pledged
Property and any securities entitlements or other rights in respect thereof;
(c) any general intangibles (as defined in Section 9-106 of the Uniform
Commercial Code) arising out of or constituted by the Subsidiary Partnership
limited partnership interests owned by the Company; and
(d) all of the proceeds, products, rents, issues and profits of any of
the property described in paragraph (a), paragraph (b), paragraph (c) or this
paragraph (d).
2. Debt Securities of Subsidiary Partnerships
Intercompany Note, dated March 24, 1998 of Corporate Property
Associates 9, L.P., a Delaware limited partnership.
- ii -
<PAGE> 140
Schedule 2
Subsidiary Partnership and Partnership Interests
<TABLE>
<CAPTION>
Percentage of Operating Cash Distribution
Limited Total -----------------------------------------
Partnership Limited
Type of Limited Units Held Partnership
Partnership Certificate Partnership by Non-CD Units General Special Limited
Subsidiary Partnership Interest No. Units(1) Partners Outstanding Partner Partners Partners(2)
- ---------------------- -------- ----------- ----------- ----------- ----------- ------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Corporate Property limited NA 39,490 510 40,000 1% 1% 98%
Associates partner
Corporate Property limited NA 54,227 673 54,900 1% 1% 98%
Associates 2 partner
Corporate Property limited NA 64,878 1,122 66,000 1% 2% 97%
Associates 3 partner
Corporate Property limited NA 83,329 2,199 85,528 1% 6% 93%
Associates 4 - a partner
California limited
partnership
Corporate Property limited NA 111,658 1,542 113,200 1% 6% 93%
Associates 5 - a partner
California limited
partnership
Corporate Property limited NA 47,281 669 47,950 1% 6% 93%
Associates 6 - a partner
California limited
partnership
Corporate Property limited NA 44,197 1,012 45,209 1% 5% 94%
Associates 7 - a partner
California limited
partnership
Corporate Property limited NA 66,094 1,488 67,582 1% 10% 89%
Associates 8, L.P. partner
Corporate Property limited NA 58,990 928 59,918 1% 10% 89%
Associates 9, L.P. partner
</TABLE>
<TABLE>
<CAPTION>
Net Proceeds from Sale on Refinancing
------------------------------------
Individual
General Special Limited
Subsidiary Partnership Partner Partner(3) Partner
- ---------------------- ------- ---------- -------
<S> <C> <C> <C>
Corporate Property 1% 1% 98%
Associates
Corporate Property 1% 1% 98%
Associates 2
Corporate Property 1% 1% 98%
Associates 3
Corporate Property 1% 1% 98%
Associates 4 - a
California limited
partnership
Corporate Property 1% 1% 98%
Associates 5 - a
California limited
partnership
Corporate Property 1% 1% 98%
Associates 6 - a
California limited
partnership
Corporate Property 1% 1% 98%
Associates 7 - a
California limited
partnership
Corporate Property 1% 1% 98%
Associates 8, L.P.
Corporate Property 1% 1% 98%
Associates 9, L.P.
</TABLE>
(1) "Unit" means an interest of a limited partner in a Subsidiary Partnership
representing a specific capital contribution of $500 per unit for each
of Corporate Property Associates, Corporate Property Associates 2,
Corporate Property Associates 3, Corporate Property Associates 4- a
California limited partnership, Corporate Property Associates 5 and a
capital contribution of $1,000 per unit for each of Corporate Property
Associates 6- a California limited partnership, Corporate Property
Associates 7- a California limited partnership, Corporate Property
Associates 8, L.P. and Corporate Property Associates 9, L.P.
(2) Excludes Special Partners.
(3) After the Individual Special Partner receives aggregate payments in an
amount specified in each partnership agreement, it will receive no
further distributions of sales or refinancing proceeds and the Limited
Partners will be paid the 1% attributable to the Individual Special
Partner.
<PAGE> 141
EXHIBIT G
[Form of New Borrower Agreement]
To: The Chase Manhattan Bank
From: [Insert name of new Borrower]
Dated:
Dear Sirs:
1. We refer to the agreement (the "Credit Agreement") dated as of March 26,
1998 among Carey Diversified LLC, The Chase Manhattan Bank, as Issuing
Bank and Administrative Agent, The Bank of New York, as Documentation
Agent, and Chase Securities, Inc., as Arranger. and Chase Securities,
Inc., as Arranger and the financial institutions named therein as
Lenders.
2. Terms defined in the Credit Agreement bear the same meaning herein.
3. [Insert name of new Borrower] hereby agrees to become party to the Credit
Agreement as a Borrower, pursuant to the provisions of Section 2.05 of
the Credit Agreement and accordingly undertakes henceforth to perform and
assumes all the obligations expressed to be undertaken under the Credit
Agreement by a Borrower, in all respects as if it had been an original
party thereto.
4. All representations and warranties contained in the Credit Agreement
applicable to such Borrower as a Borrower are true and correct as if made
on the date hereof.
5. [Insert name of new Borrower's] administrative details are as follows:
Address:
Telephone No.:
Facsimile No.:
Attention:
6. This memorandum shall be governed by, and construed in accordance with,
New York law.
IN WITNESS WHEREOF THIS AGREEMENT has been executed the day and year first above
written.
[New Borrower]
--------------------------------
<PAGE> 142
EXHIBIT H-1
OPINION OF COUNSEL FOR THE BORROWER
[Original Opinion of Reed Smith Shaw & McClay LLP to be attached]*
* Full form of Opinion to be attached.
- 1 -
<PAGE> 143
EXHIBIT H-2
[FORM OF OPINION OF ARTER & HADDEN]
[Original Opinion to be attached]
- 1 -
<PAGE> 144
EXHIBIT I
FINANCIAL CALCULATION SCHEDULE PURSUANT TO 5.01
- 1 -
<PAGE> 145
EXHIBIT J
SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT (this "Agreement") is made and executed as
of March 26, 1998, among CAREY MANAGEMENT LLC, a Delaware limited liability
company, having an office at 50 Rockefeller Plaza, New York, New York 10020
("Manager"), THE CHASE MANHATTAN BANK, AS ADMINISTRATIVE AGENT, having an office
at 270 Park Avenue, New York, New York 10172 ("Agent"), and CAREY DIVERSIFIED
LLC, a Delaware limited liability company, having an office at 50 Rockefeller
Plaza, New York, New York 10020 ("Borrower").
WHEREAS, Borrower and Agent are parties to a certain Credit
Agreement, dated as of March 26, 1998, pursuant to which Agent and the lenders
which are signatories to the Credit Agreement (the "Lenders") have agreed to
make loans and other extensions of credit (the "Loans") to Borrower in an
aggregate principal amount of up to $150,000,000 upon the terms and conditions
set forth therein (as such Credit Agreement may be amended, modified or restated
from time to time, the "Credit Agreement"). All capitalized terms not defined in
this Agreement shall have the respective meanings assigned to them in the Credit
Agreement;
WHEREAS, as a condition to the making of the Loan, Borrower
has pledged to the Agent for the benefit of the Secured Parties all right, title
and interest of Borrower in, to and under the Collateral, as collateral for the
payment of the Obligations and the performance of all other covenants,
obligations and liabilities of Borrower pursuant to the Loan Documents ;
WHEREAS, Manager is the manager under that certain Management
Agreement dated as of October 15, 1997, between Manager, as manager, and
Borrower (such Management Agreement as the same may be modified, amended or
restated from time to time is hereinafter called the "Management Agreement")
pursuant to which Manager receives for its services to Borrower and its
subsidiaries a management fee, payable in cash (the "Cash Fees") and a
performance fee (the "Performance Fees") which is payable in listed shares (the
"Listed Shares") of Borrower and pursuant to which Manager is reimbursed by
Borrower for certain expenses (the "Expenses" and, together with the Cash Fees
and the Performance Fees, the "Management Fees and Expenses"); and
WHEREAS, Agent, Borrower and Manager desire to enter into this
Agreement to subordinate the Management Agreement and Manager's rights
thereunder as set forth herein to all Obligations under the Loan Documents upon
the occurrence of an Event of Default (as defined in the Credit Agreement);
NOW, THEREFORE, in consideration of the recitals set forth above, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
<PAGE> 146
Section 1. Each of the Borrower and the Manager, for itself and its
successors, and assigns, covenants and agrees that the payment of the Management
Fees and Expenses is hereby expressly subordinated, to the extent and in the
manner hereinafter set forth, to the prior payment in full in cash of all
Obligations. Borrower and Manager hereby agree that the Management Agreement and
all of Manager's rights thereunder shall be, in all respects, subject and
subordinate to the prior payment in full in cash of all Obligations when due and
payable under the Loan Documents; provided, that prior to the occurrence of an
Event of Default, Manager shall be entitled to receive all Management Fees and
Expenses in accordance with the Management Agreement; provided further, that
upon the occurrence and during the continuance of any Event of Default, Manager
shall be entitled to receive Expenses in an amount equal to the reasonable costs
of Manager in providing management services to Borrower and its subsidiaries as
required to be provided by the Manager pursuant to the Management Agreement (the
"Nonsubordinated Expenses") which amount shall not exceed the lesser of (i) the
amount that would be payable by Borrower in the event that it obtained such
services on an arm's-length basis from an unaffiliated third party or (ii) 0.5%
of the Total Capitalization (as defined in the Management Agreement). Any amount
of fees and expenses that would otherwise be payable to Manager as Management
Fees and Expenses under the Management Agreement but for the foregoing provision
in the preceding sentence (other than any fees payable upon termination of the
Management Agreement), if any, may, at the Manager's option, be paid to Manager
in Listed Shares or may be deferred and paid when no Event of Default has
occurred and is continuing or when all Obligations then due and payable have
been paid; provided further, that upon the occurrence and during the continuance
of any Event of Default, in no event shall Manager be entitled to receive any
fees payable upon termination of the Management Agreement. The provisions of
this Agreement shall constitute a continuing offer to all persons who, in
reliance upon such provisions, become holders of, or continue to hold,
Obligations, and such provisions are made for the benefit of the holders of
Obligations, and such holders are hereby made obligees hereunder the same as if
their names were written herein as such, and they and/or each of them may
proceed to enforce such provisions.
Section 2. Upon any distribution of assets of the Borrower upon
dissolution, winding up, liquidation or reorganization of the Borrower (whether
in bankruptcy, insolvency or receivership proceedings or upon an assignment for
the benefit of creditors or otherwise):
(a) the Agent and the Lenders shall first be entitled to
receive payment in full in cash of all Obligations then due and payable
(including, without limitation, post-petition interest at the rate provided in
the documentation with respect to the Obligations, whether or not such
post-petition interest is an allowed claim against the debtor in any bankruptcy
or similar proceeding) before Manager is entitled to receive any payment with
respect to the Management Agreement, other than payment of Nonsubordinated
Expenses which shall not exceed the lesser of (i) 0.5% of the Total
Capitalization (as defined in the Management Agreement) or (ii) such amount that
the bankruptcy court, trustee, creditors, receiver, liquidating trustee or other
trustee or agent may approve in any bankruptcy or similar proceeding;
- 3 -
<PAGE> 147
(b) the Agent and the Lenders shall first be entitled to
receive payment in full in cash of all Obligations then due and payable
(including, without limitation, post-petition interest at the rate provided in
the documentation with respect to the Obligations, whether or not such
post-petition interest is an allowed claim against the debtor in any bankruptcy
or similar proceeding) any payment or distributions of assets of the Borrower of
any kind or character, whether in cash, property or securities to which Manager
would be entitled under the Management Agreement, other than payment of
Nonsubordinated Expenses which shall not exceed the lesser of (i) 0.5% of the
Total Capitalization (as defined in the Management Agreement) or (ii) such
amount that the bankruptcy court, trustee, creditors, receiver, liquidating
trustee or other trustee or agent may approve in any bankruptcy or similar
proceeding; provided, further, that except for the provisions of this Agreement,
such amounts shall be paid by the liquidating trustee or agent or other person
making such payment or distribution, whether a trustee in bankruptcy, a
receiver, liquidating trustee or other trustee or agent, directly to the Agent
or its or their representative or representatives, to the extent necessary to
make payment in full in cash of all Obligations remaining unpaid, after giving
effect to any concurrent payment or distribution to the holders of such
Obligations; and
(c) in the event that, notwithstanding the foregoing
provisions of this Section 2, any payment or distribution of assets of the
Borrower of any kind or character, whether in cash, property or securities,
other than payment of Nonsubordinated Expenses which shall not exceed the lesser
of (i) 0.5% of the Total Capitalization (as defined in the Management Agreement)
or (ii) such amount that the bankruptcy court, trustee, creditors, receiver,
liquidating trustee or other trustee or agent may approve in any bankruptcy or
similar proceeding, shall be received by Manager on account of sums due pursuant
to the Management Agreement before all Obligations remaining unpaid or
unprovided for then due and payable are paid in full in cash, such payment or
distribution shall be received and held in trust for the Agent and the Lenders
and shall be paid over to the Agent or its or their representative or
representatives, or to the trustee or trustees under any indenture under which
any instruments evidencing any of such Obligations may have been issued, for
application to the payment of such Obligations until all such Obligations shall
have been paid in full in cash, after giving effect to any concurrent payment or
distribution to the Agent.
Section 3. No amendment or waiver of any provision of this Agreement,
nor consent to any departure by Borrower or Manager therefrom, shall in any
event be effective unless the same shall be in writing and signed by the Agent.
Any such waiver, consent or approval shall be effective only in the specific
instance and for the purpose for which given. No notice to or demand on Borrower
or Manager in any case shall entitle Borrower or Manager to any other or further
notice or demand in the same, similar or other circumstances. No waiver by the
Agent of any breach or default of or by Borrower or Manager under this Agreement
shall be deemed a waiver of any other previous breach or default or any
thereafter occurring.
Section 4. Whenever in this Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the successors and
assigns of such party; and all covenants, promises and agreements by or on
behalf of Borrower, Manager or the Agent that are contained
- 4 -
<PAGE> 148
in this Agreement shall bind and inure to the benefit of their respective
successors and assigns. Borrower and Manager may not assign or transfer any of
its rights or obligations hereunder or any interest herein except as expressly
contemplated by this Agreement or the other Loan Documents (and any such
attempted assignment shall be void).
SECTION 5. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE
PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW.
SECTION 6. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section 7. All notices which are required or permitted to be given or
served hereunder shall be in writing and shall be given in the manner set forth
in the Credit Agreement provided that Manager's address for notices shall be the
same address set forth in the Credit Agreement for Borrower.
Section 8. Borrower, Agent and Manager intend and believe that each
provision in this Agreement comports with all laws and judicial decisions. If
any provision or provisions, or if any portion of any provision or provisions,
in this Agreement is found by a court of law to be in violation of any law,
judicial decision, or public policy, and if such court should declare such
portion, provision or provisions of this Agreement to be illegal, invalid,
unlawful, void or unenforceable as written, then it is the intent of Borrower,
Agent and Manager that such portion, provision or provisions shall be given
force to the fullest possible extent that they are legal, valid and enforceable,
that the remainder of this Agreement shall be construed as if such illegal,
invalid, unlawful, void or unenforceable portion, provision or provisions were
not contained herein, and that the rights, obligations and interests of
Borrower, Agent and Manager under the remainder of this Agreement, shall
continue in full force and effect.
Section 9. (a) Except as expressly herein provided, this Agreement and
the other Loan Documents constitute the entire agreement among the parties
relating to the subject matter hereof. Any previous agreement among the parties
with respect to the transactions contemplated
- 5 -
<PAGE> 149
hereunder is superseded by this Agreement and the other Loan Documents. Except
as expressly provided herein or in the other Loan Documents, nothing in this
Agreement or in any other Loan Document, expressed or implied, is intended to
confer upon any party, other than the parties hereto, any rights, remedies,
obligations or liabilities under or by reason of this Agreement or such other
Loan Documents.
(b) Each of Borrower and Manager hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court for the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement, or for recognition or enforcement
of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that the Agent
may otherwise have to bring any action or proceeding relating to this Agreement
against Borrower, Manager or their properties in the courts of any jurisdiction.
(c) Each of Borrower and Manager hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement in
any court referred to in the preceding paragraph. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
(d) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 6. Nothing in
this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law .
Section 10. The provisions herein subordinating Manager's rights to
certain fees shall prevent Manager from asserting any claim or cause of action
against the Borrower arising due to non-payment of such fees, subject in any
event to the subordination of such fees and the payment thereof pursuant to this
Agreement.
Section 11. This Agreement may be executed in separate counterparts
(telecopies of any executed counterpart having the same effect as manual
delivery thereof), each of which shall constitute an original, but all of which,
when taken together, shall constitute but one agreement.
- 6 -
<PAGE> 150
The parties hereto have duly executed this Agreement as of the day and
year first above written.
CHASE MANHATTAN BANK,
AS ADMINISTRATIVE AGENT
ON BEHALF OF THE SECURED PARTIES
By:___________________________________________
Name: John Mix
Title: Vice President
MANAGER:
CAREY MANAGEMENT LLC,
By:___________________________________________
Name: John J. Park
Title: Senior Vice President
BORROWER:
CAREY DIVERSIFIED LLC
By Carey Management LLC
By: __________________________________________
Name: John J. Park
Title: Senior Vice President
J-1
<PAGE> 151
EXHIBIT K
[FORM OF INTERCOMPANY NOTE]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED
UNDER SAID ACT OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
$__________ March ___, 1998
New York, New York
INTERCOMPANY NOTE
FOR VALUE RECEIVED, _______________, a _______ [limited partnership]
[corporation] ("Maker"), hereby promises to pay to the order of Carey
Diversified LLC ("Holder") the principal sum of $__________ (plus accrued
interest thereon) in the manner set forth hereinafter.
ARTICLE I
TERMS OF INTERCOMPANY NOTE
Section 1.01. Interest; Principal; Prepayment. (a) The interest rate
("Interest Rate") on the unpaid principal balance shall be a rate per annum
equal to [insert rate].
(b) The interest shall be payable as follows: interest only
shall be due and payable on the first day of each month. Principal shall be
payable as follows: [insert terms]
(c) If the principal or accrued interest, if any, of this Note
is not paid on the [date demand is made] [Maturity Date], interest on the unpaid
principal and interest will accrue at a rate equal to the Interest Rate, if any,
plus 100 basis points per annum from maturity until the principal and interest
are fully paid.
(d) Any amounts hereunder may be prepaid without premium or
penalty at any time by the Maker.
(e) In the event Maker's net cash flow is insufficient to pay
the full amount due hereunder for any such month, Holder may at its option
either (i) defer the unpaid portion of such monthly payment to the next
succeeding month or (ii) capitalize the unpaid portion and add it to the
principal of this Note.
(f) All payments shall be made to the Holder at 50 Rockefeller
Plaza, New York, New York 10020.
K-1
<PAGE> 152
Section 1.02. Subordination. All loans made by the Holder to Maker
shall be subordinated in right of payment to the payment and performance of the
obligations of the Holder and any borrower under the Credit Agreement dated as
of the date hereof among the Holder, The Chase Manhattan Bank, as agent
("Agent") and the lenders who are parties to such Credit Agreement. Agent and
such lenders shall be a third party beneficiary of this Section 1.02 and shall
be entitled to enforce the provisions of this Section 1.02.
ARTICLE II
EVENTS OF DEFAULT
Section 2.01. Events of Default. If any payment hereunder is not made
within 10 days following the date when declared due, Holder may cause the
indebtedness evidenced hereby together with all accrued interest to be
immediately due and payable.
ARTICLE III
MISCELLANEOUS
Section 3.01. Amendments, Etc. No amendment or waiver of any provision
of this Note, or consent to depart herefrom, is permitted at any time for any
reason, except with the consent of the Holder and the Agent (until the Pledge
Agreement, as defined in the Credit Agreement is terminated).
Section 3.02. Assignment. No party to this Agreement may assign, in
whole or in part, any of its rights and obligations under this Note, except to
its legal successor in interest.
Section 3.03. Headings. Article and Section headings in this Note are
included for convenience of reference only and shall not constitute a part of
this Note for any other purpose.
Section 3.04. Entire Agreement. This Note sets forth the entire
agreement of the parties with respect to its subject matter and supersedes all
previous understandings, written or oral, in respect thereof.
Section 3.05. GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF).
K-2
<PAGE> 153
Section 3.06. Waivers. The Maker hereby waives presentment, demand for
payment, notice of protest and all other demands and notices in connection with
the delivery, acceptance, performance or enforcement hereof.
CORPORATE PROPERTY ASSOCIATES [ ]
a [ ] limited partnership
By: Carey Diversified LLC, general partner
By:_____________________________
K-3
<PAGE> 154
EXHIBIT L
FORM OF [QUARTERLY/ANNUAL] COMPLIANCE CERTIFICATE TO
ACCOMPANY REPORTS
_________, 199_
The Chase Manhattan Bank, as Administrative Agent, and the Lenders
party to the Credit Agreement referred to below 380 Madison Avenue New York, New
York 10017
Attention: Charles Hoagland
Ladies and Gentlemen:
Pursuant to Section [5.01(a)(ii)][5.01(b)(ii)] of that certain Credit
Agreement dated as of March 26, 1998 (as the same may be amended, supplemented,
restated or otherwise modified from time to time, the "Credit Agreement", the
terms defined therein being used herein as therein defined) among Carey
Diversified LLC, a Delaware limited liability company (the "Borrower"), the
institutions from time to time party thereto as Lenders, and The Chase Manhattan
Bank, as Administrative Agent, , The Bank of New York, as Documentation Agent,
and Chase Securities, as Arranger, the undersigned, ____________________, the
____________________ of Carey Diversified LLC, a Delaware limited liability
company (the "Company") hereby certifies that:
1. The undersigned has reviewed the terms of the Loan Documents,
and has made, or caused to be made under (his/her] supervision, a review in
reasonable detail of the consolidated financial condition of the Company and its
consolidated Subsidiaries during the accounting period covered by the financial
statements identified below. To the best of the undersigned's knowledge, such
review has not disclosed the existence during or at the end of such accounting
period, and as of the date hereof the undersigned does not have knowledge, of
the existence of any condition or event which constitutes a Default or a
continuing Default.(1)
2. The financial statements, reports and copies of certain
instruments and documents attached hereto, namely,
(1) If such condition or event exists or existed, specify (i) the nature
and period of such condition or event and (ii) the action taken, being
taken or proposed to be taken with respect thereto.
L-1
<PAGE> 155
A. Compliance Certificate, dated
B. ______________________, dated
C. ______________________, dated
D. ______________________, dated
are true and complete copies of the aforesaid which constitute part of or are
based upon the customary books and records of the Company, and, to the best of
the undersigned's knowledge and belief, there exist no facts or circumstances
which would have a Material Adverse Effect.
_____________________________
Name:
Title:
L-2
<PAGE> 1
EXHIBIT 99.1
CAREY
DIVERSIFIED
Company Contact: Agency Contact:
Matthew B. Walley Guy B. Lawrence
(212) 492-8992 (212) 308-3333
FAX: 333-2631 FAX: 207-8096
FOR IMMEDIATE RELEASE
CAREY DIVERSIFIED ESTABLISHES $150 MILLION CREDIT
FACILITY WITH CHASE MANHATTAN BANK
NEW YORK, NY - March 26, 1998 - Carey Diversified LLC (NYSE:CDC), an entity
managed by W.P. Carey & Co., Inc., announced that it has closed on a $150
million unsecured revolving credit facility. The LIBOR-based facility has been
syndicated to a group of banks led by The Chase Manhattan Bank. The credit
facility will be used primarily to retire existing higher priced debt and to
fund Carey Diversified's ongoing acquisitions.
Commenting on the facility, Gordon F. DuGan, President of Carey Diversified,
noted, "The facility will provide Carey Diversified with ready access to short
term capital for funding our aggressive acquisition program and will allow us to
pay down higher rate debt."
John J. Park, Chief Financial Officer of Carey Diversified, added, "We have used
$60 million of the facility to pay down existing debt with an average interest
rate of 9%."
Carey Diversified is a market leader in the ownership and net-leasing of
corporate properties. Carey Diversified's portfolio consists of 198 properties
in 37 states, totaling more than 20 million square feet. Carey Diversified
leases properties to manufacturing, technology, retailing and communications
companies including Detroit Diesel, Gibson Greetings, Inc., Dr. Pepper Bottling
Company of Texas, Wal-Mart, AT&T, The Gap and more than 70 others nationwide.
Additional information about Carey Diversified LLC is available on the company's
website at http://www.cdllc.com.
This press release contains forward-looking statements within the meaning of the
Federal securities laws. A number of factors could cause the company's actual
results, performance or achievement to differ materially from those anticipated.
Among those risks, trends and uncertainties are the general economic climate;
the supply of and demand for office and industrial properties; interest rate
levels; the availability of financing; and other risks associated with the
acquisition and ownership of properties, including risks that the tenants will
not pay rent, or that costs may be greater than anticipated. For further
information on factors that could impact the company, reference is made to the
company's filings with the Securities and Exchange Commission.
Carey Diversified LLC
50 Rockefeller Plaza
New York, New York 10020
http://www.cdllc.com.
