<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) December 15, 1995
-------------------------------
IRT Property Company
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Georgia 1-7859 58-1366611
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
200 Galleria Parkway, Suite 1400, Atlanta, GA 30339
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (770) 955-4406
----------------------------
N/A
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
1
<PAGE> 2
ITEM 5. OTHER EVENTS
On December 15, 1995, IRT Property Company (the "Company") obtained a
$100,000,000 unsecured revolving term loan maturing January 4, 1999. Not later
than June 30th of each year commencing June 30, 1996, the Company may request
to extend the maturity date for an additional twelve month period beyond the
existing maturity date.
The following five banks have committed to fund portions of the term
loan:
<TABLE>
<CAPTION>
Bank Dollar Commitment
---- -----------------
<S> <C>
NationsBank of Georgia, N.A. $ 35,000,000
CoreStates Bank, N.A. 20,000,000
AmSouth Bank of Alabama 20,000,000
Signet Bank/Virginia 15,000,000
SouthTrust Bank of Alabama, N.A. 10,000,000
</TABLE>
The interest rate is, at the option of the Company, either a) prime,
fluctuating daily, or b) the adjusted London Interbank Offered Rates ("LIBOR")
plus the "Applicable Margin" based upon the Standard & Poor rating of the
senior unsecured long-term debt obligations of the Company set forth below for
periods of one, two, three, six or twelve months at the option of the Company.
The Applicable Margin is as follows:
<TABLE>
<CAPTION>
Rating Applicable Margin
------ -----------------
<S> <C>
A 1.30%
A- 1.35%
BBB+ 1.45%
BBB-/BBB
or lower 1.50%
</TABLE>
Prepayments may be made on prime rate and LIBOR advances with 3
business days prior written notice provided that the Company will reimburse the
lenders for any loss or out-of-pocket expense incurred in connection with any
LIBOR prepayment. The Company pays a fee of 0.25% per annum of the aggregate
unused portion of the commitment.
The loan agreement contains restrictive covenants pertaining to net
worth, the ratio of debt to equity, interest coverage, debt service coverage,
net operating losses, and the ratio of total liabilities to total assets. The
Company has agreed not to encumber certain properties ("Negative Pledge
Properties"). The commitment may fluctuate up to a maximum of $100,000,000
based on 65% of the value of the Negative Pledge Properties.
On December 15, 1995, the Company terminated the existing $50,000,000
secured revolving term loan dated July 31, 1992.
2
<PAGE> 3
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
(a) Financial Statements of Business Acquired.
None.
(b) Pro Forma Financial Information.
None.
(c) Exhibits
(10) The Company's revolving term loan agreement dated
December 15, 1995 (exclusive of exhibits thereto).
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
January 2, 1996 IRT PROPERTY COMPANY
BY: /s/Mary M. Thomas
----------------------------------
Mary M. Thomas
Executive Vice President and Chief
Financial Officer
3
<PAGE> 1
EXHIBIT 10
LOAN AGREEMENT
IRT PROPERTY COMPANY,
NATIONSBANK OF GEORGIA, N.A.,
CORESTATES BANK, N.A.,
AMSOUTH BANK OF ALABAMA,
SIGNET BANK\VIRGINIA AND
SOUTHTRUST BANK OF ALABAMA, NATIONAL ASSOCIATION
and
NATIONSBANK OF GEORGIA, N.A.,
as Administrative Agent for the Banks
December 15, 1995
$100,000,000
<PAGE> 2
LOAN AGREEMENT
AMONG
IRT PROPERTY COMPANY,
NATIONSBANK OF GEORGIA, N.A.,
CORESTATES BANK, N.A.,
AMSOUTH BANK OF ALABAMA
SIGNET BANK\VIRGINIA and
SOUTHTRUST BANK OF ALABAMA, NATIONAL ASSOCIATION
AND
NATIONSBANK OF GEORGIA, N.A.
As Administrative Agent for the Banks
<TABLE>
<S> <C>
ARTICLE 1 - Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 2 - Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 2.1 The Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 2.2 Manner of Borrowing and Disbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 2.3 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 2.4 Fees and Commissions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 2.5 Reduction of Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 2.6 Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 2.7 Repayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 2.8 Notes; Loan Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 2.9 Manner of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 2.10 Application of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 2.11 Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 2.12 Capital Adequacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 2.13 Bank Tax Forms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 2.14 Extension of the Maturity Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE 3 - Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 3.1 Conditions Precedent to Initial Advance . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 3.2 Conditions Precedent to Each Advance . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>
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<PAGE> 3
<TABLE>
Index Page
(Con.'t)
<S> <C>
ARTICLE 4 - Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 4.1 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 4.2 Survival of Representations and Warranties, etc. . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE 5 - General Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 5.1 Preservation of Existence and Similar Matters . . . . . . . . . . . . . . . . . . . . . . . 30
Section 5.2 Business: Compliance with Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 5.3 Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 5.4 Accounting Methods and Financial Records . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 5.5 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 5.6 Payment of Taxes and Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 5.7 Visits and Inspections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 5.8 Payment of Indebtedness; Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 5.9 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 5.10 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 5.11 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 5.12 Payment of Wages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 5.13 Accuracy and Completeness of Information . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 5.14 Compliance with Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 5.15 Indemnity in Regard to Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . 34
Section 5.16 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 5.17 Broker's Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 5.18 Delivery of Mortgages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE 6 - Information Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 6.1 Quarterly Operations Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 6.2 Quarterly Consolidated Financial Statements and Information . . . . . . . . . . . . . . . . 36
Section 6.3 Annual Consolidated Financial Statements and Information; Certificate of No Default . . . . 37
Section 6.4 Performance Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 6.5 Copies of Other Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 6.6 Notice of Litigation and Other Matters . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 6.7 Matters Affecting the Negative Pledge Property . . . . . . . . . . . . . . . . . . . . . . 39
Section 6.8 Notices from the Borrower Regarding Environmental Matters . . . . . . . . . . . . . . . . . 39
</TABLE>
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<PAGE> 4
<TABLE>
Index Page
(Con.'t)
<S> <C>
ARTICLE 7 - Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 7.1 Indebtedness of the Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 7.2 Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 7.3 Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 7.4 Amendment and Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 7.5 Liquidation; Disposition or Acquisition of Assets . . . . . . . . . . . . . . . . . . . . . 41
Section 7.6 Limitation on Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 7.7 Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 7.8 Borrower Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 7.9 Indebtedness Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 7.10 Interest Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 7.11 Collateral Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 7.12 Total Liabilities to Total Assets Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 7.13 Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 7.14 Debt Service Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 7.15 Value of Unencumbered Real Estate Assets . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 7.16 Affiliate Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 7.17 ERISA Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE 8 - Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 8.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 8.2 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE 9 - The Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 9.1 Appointment and Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 9.2 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 9.3 Interest Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 9.4 Consultation with Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 9.5 Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 9.6 Administrative Agent and Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 9.7 Responsibility of the Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 9.8 Action by Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 9.9 Notice of Default or Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 9.10 Responsibility Disclaimed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 9.11 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 9.12 Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 9.13 Successor Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
</TABLE>
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<PAGE> 5
<TABLE>
Index Page
(Con.'t)
<S> <C>
ARTICLE 10 - Change in Circumstances Affecting LIBOR Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 10.1 LIBOR Basis Determination Inadequate or Unfair . . . . . . . . . . . . . . . . . . . . . . 49
Section 10.2 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 10.3 Increased Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 10.4 Effect On Other Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 10.5 Claims for Increased Costs and Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE 11 - Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 11.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 11.2 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 11.3 Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 11.4 Set-Off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 11.5 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 11.6 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 11.7 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 11.8 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 11.9 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 11.10 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 11.11 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 11.12 Amendment and Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 11.13 Other Relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 11.14 Bank Wiring Instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 11.15 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
ARTICLE 12 - Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 12.1 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
</TABLE>
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<PAGE> 6
Exhibits
<TABLE>
<S> <C>
Exhibit A - Form of Note
Exhibit B - Form of Request for Advance
Exhibit C - Form of Opinion of Borrower's Counsel
Exhibit D - Form of Borrower's Loan Certificate
Schedules
Schedule 1 - Negative Pledge Property
Schedule 2 - Liens of Record
Schedule 3 - Indebtedness
Schedule 4 - Environmental Matters
</TABLE>
- v -
<PAGE> 7
LOAN AGREEMENT
IRT PROPERTY COMPANY,
NATIONSBANK OF GEORGIA, N.A,
CORESTATES BANK, N.A.,
AMSOUTH BANK OF ALABAMA,
SIGNET BANK\VIRGINIA,
SOUTHTRUST BANK OF ALABAMA, NATIONAL ASSOCIATION
and
NATIONSBANK OF GEORGIA, N.A.,
as Administrative Agent for the Banks,
agree as follows as of the 15th day of December, 1995:
ARTICLE 1 - Definitions.
For the purposes of this Agreement:
"Administrative Agent" shall mean NationsBank of Georgia, N.A. (or any
successor Administrative Agent appointed in accordance with this Agreement),
acting as administrative agent for the Banks.
"Administrative Agent's Office" shall mean the office of the
Administrative Agent located at the address set forth in Section 11.1 hereof,
or such other office as may be designated pursuant to the provisions of Section
11.1 hereof.
"Advance" or "Advances" shall mean amounts advanced by the Banks to
the Borrower pursuant to Article 2 hereof on the occasion of any borrowing.
"Affiliate" shall mean any Person directly or indirectly controlling,
controlled by, or under common control with the Borrower excluding, however,
directors, officers or employees of the Borrower.
"Agreement" shall mean this Loan Agreement.
"Agreement Date" shall mean December 15, 1995.
"Applicable Law" shall mean, in respect of any Person, all provisions
of constitutions, statutes, rules, regulations, and orders of governmental
bodies or regulatory agencies applicable to such Person, including, without
limitation, all orders and decrees of all courts and arbitrators in proceedings
or actions to which the Person in question is a party or by which it is bound.
"Applicable Margin" shall mean, in the case of the LIBOR Basis, as of
any calculation date, the Applicable Margin set forth below opposite the rating
then assigned by S&P to the senior
<PAGE> 8
unsecured long-term debt obligations of the Borrower set forth below (changes
in the Applicable Margin shall be effective on the date any such rating
changes):
<TABLE>
<CAPTION>
APPLICABLE
RATINGS ASSIGNED BY S&P MARGIN
----------------------- ----------
<S> <C> <C>
(i) A or above 1.30%
(ii) A- 1.35%
(iii) BBB+ 1.45%
(iv) BBB-/BBB or below (including no 1.50%
rating)
</TABLE>
"Authorized Signatory" shall mean, with respect to any Person, such
senior personnel of such Person as may be duly authorized and designated in
writing by the Person to execute documents, agreements, and instruments on
behalf of the Person. The Authorized Signatories of the Borrower as of the
Agreement Date are as set forth in the Borrower's Loan Certificate delivered
pursuant to Section 3.1 hereof.
"Availability Restriction" shall mean, as of any particular time, the
product of (a) the Value of Negative Pledge Property and (b) sixty-five percent
(65%).
"Available Commitment" shall mean, as of any particular time, (a) the
lesser of (i) the Commitment and (ii) the Availability Restriction minus (b)
the Loans then outstanding.
"Banks" shall mean those banks whose names are set forth on the
signature pages hereof under the heading "Banks" and any assignees of the Banks
which hereafter become parties hereto pursuant to and in accordance with
Section 11.5 hereof; and "Bank" shall mean any one of the foregoing Banks.
"Borrower" shall mean IRT Property Company, a Georgia corporation.
"Business Day" shall mean a day on which banks are not authorized or
required to be closed and foreign exchange markets are open for the transaction
of business required for this Agreement in Atlanta, Georgia and London,
England, as relevant to the determination to be made or the action to be taken.
"Capital Expenditures" shall mean expenditures for the purchase or
improvement of assets of long-term use which are capitalized in accordance with
GAAP.
"Capitalized Lease Obligation" shall mean that portion of any
obligation of a specified Person as lessee under a lease which at the time
would be required to be capitalized on the balance sheet of such lessee in
accordance with GAAP.
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<PAGE> 9
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended from time to time (42 U.S.C. Section
9601 et seq.).
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Commitment" shall mean the several obligations of the Banks to
advance funds in the aggregate sum of up to $100,000,000 to the Borrower
pursuant to the terms hereof, as such obligations may be reduced from time to
time pursuant to the terms hereof.
"Commitment Ratios" shall mean the percentages as of the date of
determination in which the Banks are severally bound to satisfy the Commitment
to make Advances to the Borrower pursuant to the terms hereof, which as of the
Agreement Date are as set forth below:
<TABLE>
<CAPTION>
Percentage
(Rounded to the Dollar
Bank nearest 1/10%) Commitment
---- -------------- ----------
<S> <C> <C>
NationsBank of Georgia, N.A. 35% $35,000,000
CoreStates Bank, NA. 20% $20,000,000
AmSouth Bank of Alabama 20% $20,000,000
Signet Bank\Virginia 15% $15,000,000
SouthTrust Bank of Alabama,
National Association 10% $10,000,000
TOTAL: 100% $100,000,000
</TABLE>
"Debt Service" shall mean with respect to any period the debt service
on the Commitment calculated using an implied rate equal to the 7-year Treasury
rate plus 1.75%, with a 25-year amortization period.
"Debt Service Coverage Ratio" shall mean, as of any calculation date,
the ratio of the NOI for all Negative Pledge Properties as of the calculation
date to Debt Service.
"Default" shall mean any event, act or condition specified in Section
8.1 hereof which with any passage of time or giving of notice (or both) would
constitute such event an Event of Default.
"Default Rate" shall mean a simple per annum interest rate equal to the
sum of (a) the otherwise applicable rate of interest plus (b) two percent (2%).
"EBITDA" shall mean the amount equal to the net earnings of the
Borrower in a single fiscal year plus the sum for such year of (1) all federal
and state income taxes payable by the Borrower plus (2) the total depreciation
and amortization actually taken on the books and records of the
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Borrower with respect to all the tangible assets of the Borrower, and plus (3)
all Interest on Indebtedness for Money Borrowed.
"Environmental Laws" means all present and future federal, state and
local laws, including the applicable rules and regulations promulgated
thereunder, all judicial interpretations thereof, all judgments, decrees, order
concessions, grants, franchises, agreements, and other governmental
restrictions and rules of common law relating to the environment or to health
or safety risks arising therefrom, including, without limitation, CERCLA, the
Resource Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901 et
seq.), the Hazardous Materials Transportation Act (49 U.S.C. Section
6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C. Section
1251 et seq.), the Clean Air Act (42 U.S.C. Section 7401 et seq.), the Toxic
Substances Control Act (15 U.S.C. Section 2601 et seq.), the National
Environmental Policy Act (42 U.S.C. Section 4321 et seq.) and the Safe
Drinking Water Act (42 U.S.C. Section 300f-Section 300j), as they may be
amended from time to time.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as in effect on the Agreement Date and as such Act may be amended thereafter
from time to time.
"ERISA Affiliate" shall mean (a) any corporation which is a member of
the same controlled group of corporations (within the meaning of Code Section
414(b)) as is the Borrower, (b) any other trade or business (whether or not
incorporated) under common control (within the meaning of Code Section 414(c))
with the Borrower, (c) any other corporation, partnership or other organization
which is a member of an affiliated service group (within the meaning of Code
Section 414(m)) with the Borrower, or (d) any other entity required to be
aggregated with the Borrower pursuant to regulations under Code Section 414(o).
"Event of Default" shall mean any of the events specified in Section
8.1 hereof, provided that any requirement for notice or lapse of time, or both,
has been satisfied.
"Funds From Operations" shall mean net cash flow from operating
activities (as determined by GAAP) before changes in accrued assets and
liabilities.
"GAAP" shall mean, as in effect from time to time, generally accepted
accounting principles consistently applied.
"Governmental Authority" shall mean any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Guaranty" or "Guaranteed," as applied to an obligation (each a
"primary obligation"), shall mean and include (a) any guaranty, direct or
indirect, in any manner, of any part or all of such primary obligation, and (b)
any agreement, direct or indirect, contingent or otherwise, the practical
effect of which is to assure in any way the payment or performance (or payment
of damages in the event of non-performance) of any part or all of such primary
obligation, including, without limiting the foregoing, any reimbursement
obligations as to amounts drawn down by beneficiaries of outstanding letters of
credit, and any obligation of such Person (the "primary obligor"), whether or
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not contingent, (i) to purchase any such primary obligation or any property or
asset constituting direct or indirect security therefor, (ii) to advance or
supply funds (1) for the purchase or payment of such primary obligation or (2)
to maintain working capital, equity capital or the net worth, cash flow,
solvency or other balance sheet or income statement condition of any other
Person, (iii) to purchase property, assets, securities or services primarily
for the purpose of assuring the owner or holder of any primary obligation of
the ability of the primary obligor with respect to such primary obligation to
make payment thereof or (iv) otherwise to assure or hold harmless the owner or
holder of such primary obligation against loss in respect thereof.
"Hazardous Materials" means any and all hazardous or toxic substances,
pollutants, contaminants, petroleum and gas products, including (without
limitation) solid, semi-solid, liquid or gaseous substances which are toxic,
ignitable, corrosive, carcinogenic or otherwise dangerous to human, plant or
animal health and well-being, including (without limitation) crude oil or any
fraction thereof, natural gas, natural gas liquids, liquified natural gas or
synthetic gas usable for fuel, and including (without limitation) materials
defined as hazardous wastes or substances under any of the Environmental Laws.
"Indebtedness" shall mean, with respect to the Borrower or any of its
Subsidiaries, (a) all items, except items of consolidated shareholders' equity
or capital stock or surplus or general contingency or deferred tax reserves,
which in accordance with generally accepted accounting principles would be
included in determining total liabilities as shown on the liability side of a
consolidated balance sheet of the Borrower and (b) all reimbursement
obligations with respect to outstanding letters of credit.
"Indebtedness for Money Borrowed" shall mean, with respect to any
specified Person, all money borrowed by such Person and Indebtedness
represented by notes payable by such Person and drafts accepted representing
extensions of credit to such Person, all obligations of such Person evidenced
by bonds, debentures, notes, or other similar instruments, all Indebtedness of
such Person upon which interest charges are customarily paid, and all
Indebtedness of such Person issued or assumed as full or partial payment for
property or services, whether or not any such notes, drafts, obligations, or
Indebtedness represent Indebtedness for money borrowed. For purposes of this
definition, interest which is accrued but not paid on the original due date or
within any applicable cure or grace period as provided by the underlying
contract for such interest shall be deemed Indebtedness for Money Borrowed.
"Interest on Indebtedness for Money Borrowed" shall mean the total
interest due and payable by Borrower and any of its Subsidiaries in any period
with respect to, or as a result of, Indebtedness for Money Borrowed.
"Interest Period" shall mean, (a) in connection with any Prime Rate
Advance, the period beginning on the date such Advance is made and ending on
(and shall include) the last day of the calendar month in which such Advance is
made, provided, however, that if a Prime Rate Advance is made on the last day
of any calendar month, it shall have an Interest Period ending on (and shall
include) the last day of the following calendar month; and (b) in connection
with any LIBOR Advance, the term of such Advance selected by the Borrower or
otherwise determined in accordance
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with this Agreement. Notwithstanding the foregoing, however, (i) any
applicable Interest Period which would otherwise end on a day which is not a
Business Day shall be extended to the next succeeding Business Day unless, with
respect to LIBOR Advances only, such Business Day falls in another calendar
month, in which case such Interest Period shall end on the next preceding
Business Day, (ii) with respect to LIBOR Advances only, any applicable Interest
Period which begins on a day for which there is no numerically corresponding
day in the calendar month during which such Interest Period is to end shall
(subject to clause (i) above) end on the last day of such calendar month, and
(iii) no Interest Period shall extend beyond the Maturity Date or such earlier
date as would interfere with the repayment obligations of the Borrower
hereunder. Interest shall be due and payable with respect to any Advance as
provided in Section 2.3 hereof.
"Interest Rate Basis" shall mean the Prime Rate Basis, or the LIBOR
Basis as appropriate.
"LIBOR Advance" shall mean an Advance which the Borrower requests to be
made as a LIBOR Advance or which is deemed to be a LIBOR Advance in accordance
with the provisions of Section 2.2 hereof, and which shall be in a principal
amount of at least $2,500,000 and in an integral multiple of $1,000,000.
"LIBOR Basis" shall mean a simple per annum interest rate equal to the
sum of (a) the quotient of (1) LIBOR divided by (2) one minus the LIBOR Reserve
Percentage, stated as a decimal, plus (b) the Applicable Margin. If the LIBOR
Basis as so calculated is not expressed as an even multiple of one sixteenth of
one percent (1/16%), the LIBOR Basis shall be rounded upward to the nearest
one-sixteenth of one percent (1/16%) and shall apply to Interest Periods of one
(1), two (2), three (3), six (6) and twelve (12) months, and, once determined,
shall remain unchanged during the applicable Interest Period, except for
changes to reflect adjustments in the LIBOR Reserve Percentage.
"LIBOR" shall mean, for any Interest Period, the average (rounded
upward to the nearest one-sixteenth (1/16) of one percent) of the interest
rates per annum at which deposits in United States Dollars for such Interest
Period are offered to the Administrative Agent in the eurodollar interbank
borrowing market at approximately 11:00 a.m. (Eastern time) two (2) Business
Days before the first day of such Interest Period, in an amount approximately
equal to the principal amount of, and for a length of time approximately equal
to the Interest Period for, the LIBOR Advance sought by the Borrower.
"LIBOR Reserve Percentage" shall mean the percentage which is in effect
from time to time under Regulation D of the Board of Governors of the Federal
Reserve System, as such regulation may be amended from time to time, as the
maximum reserve requirement applicable with respect to Eurocurrency Liabilities
(as that term is defined in Regulation D), whether or not any Bank has any
Eurocurrency Liabilities subject to such reserve requirement at that time. The
LIBOR Basis for any LIBOR Advance shall be adjusted as of the effective date of
any change in the LIBOR Reserve Percentage.
"Lien" shall mean, with respect to any property, any mortgage, lien,
pledge, assignment, charge, security interest, title retention agreement, levy,
execution, seizure, attachment,
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garnishment, or other encumbrance of any kind in the nature of any of the
foregoing in respect of such property, whether or not choate, vested, or
perfected.
"Loan Documents" shall mean, without limitation, this Agreement, the
Notes, all legal opinions or reliance letters issued by counsel to the Borrower
in connection herewith, all Requests for Advance, and all other documents,
instruments, certificates and agreements executed or delivered in connection
with or contemplated by this Agreement.
"Loans" shall mean, collectively, amounts advanced by the Banks to the
Borrower under the Commitment, not to exceed the Commitment, and evidenced by
the Notes.
"Majority Banks" shall mean, at any time, (a) if there are no Loans
outstanding, Banks the total of whose Commitment Ratios exceeds sixty-six and
two-thirds percent (66-2/3%), or (b) if there are Loans outstanding, Banks the
total of whose Loans outstanding exceeds sixty-six and two-thirds percent
(66-2/3%) of the total principal amount of the Loans outstanding hereunder.
"Materially Adverse Effect" shall mean a materially adverse effect upon
the business, assets, liabilities, financial condition, results of operations,
or business prospects of the Borrower or upon the ability of the Borrower to
perform any material obligations under this Agreement or any other Loan
Documents; in any case, whether resulting from any single act, omission,
situation, status, event, or undertaking, or several acts, omissions,
situations, statuses, events, or undertakings.
"Maturity Date" shall mean January 4, 1999, or such earlier date as
payment of the Loans shall be due (whether by acceleration or otherwise) or
such later date as to which payment of the Loans may be extended in accordance
with the terms hereof.
"Multiemployer Plan" shall have the meaning set forth in Section
4001(a)(3) of ERISA.
"Necessary Authorizations" shall mean all authorizations, consents,
permits, approvals, licenses, and exemptions from, and all filings and
registrations with, and all reports to, any governmental or other regulatory
authority whether federal, state, or local, and all agencies thereof necessary,
appropriate or useful for the conduct of the businesses and the ownership (or
lease) of the properties and assets of the Borrower and its Subsidiaries.
"Negative Pledge Properties" shall mean those certain real properties
owned by the Borrower or any of its wholly-owned Subsidiaries and, as of the
Agreement Date, more particularly described on Schedule 1 attached hereto and
shall (a) include any other properties which the Banks whose Commitment Ratios
equal 100% of the total Commitment Ratios, in their sole discretion, permit to
be designated as "Negative Pledge Properties" hereunder and (b) exclude any
properties which the Borrower requests to have removed from the pool of
Negative Pledge Properties.
"Net Book Value" shall mean, for any asset of the Borrower or its
Subsidiaries, the cost basis of such asset less the accumulated depreciation
for such asset as set forth in the books and records of the Borrower, all
determined in accordance with GAAP.
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"Net Proceeds" shall mean, with respect to any issuance by the Borrower
of any common stock, the gross sales price for the securities being sold, net
of (a) amounts reserved, if any, for taxes payable with respect to the sale,
(b) reasonable and customary transaction costs payable by the Borrower, (c)
contingencies with respect to such sale appropriately reserved for by the
Borrower, and (d) until actually received by the Borrower, any portion of the
sales price held in escrow or paid in installments.
"Net Worth" shall mean the sum of (1) consolidated shareholder's equity
of the Borrower as calculated pursuant to GAAP plus (2) the total accumulated
depreciation reflected on the consolidated balance sheet of Borrower with
respect to all the tangible assets of the Borrower.
"NOI" shall mean, for any Negative Pledge Property, (a) the total
income of such property less (b) the sum of (i) all operating expenses of such
property and (ii) capital expense reserve in the amount of ten cents ($.10) per
square foot of building space, except that no such capital expense reserve
shall be charged with respect to building space for which a Person other than
the Borrower or its Subsidiaries has a contractual responsibility for
structural repairs and replacements.
"Nonrecourse" shall mean, with respect to Indebtedness of the Borrower
or its Subsidiaries, Indebtedness for which the Borrower or such Subsidiary has
no personal liability (other than to the extent of the property securing such
Indebtedness) except under circumstances which are reasonable and customary in
the commercial real estate lending industry.
"Notes" shall mean those certain promissory notes in the aggregate
principal amount of up to $100,000,000; one such note issued to each of the
Banks by the Borrower, each one in substantially the form of Exhibit A attached
hereto, any other promissory notes issued pursuant to this Agreement in respect
of the Commitment, and any extensions, renewals or amendments to any of the
foregoing.
"Obligations" shall mean (a) all payment and performance obligations of
the Borrower and all other obligors to the Banks and the Administrative Agent
under this Agreement and the other Loan Documents, as they may be amended from
time to time, or as a result of making the Loans, and (b) the obligation to pay
an amount equal to the amount of any and all damages which the Banks and the
Administrative Agent, or any of them, may suffer by reason of a breach by
either Borrower or any other obligor of any obligation, covenant, or
undertaking with respect to this Agreement or any other Loan Document.
"Overnight Federal Funds Rate" shall mean the rate on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published for such day by the Federal Reserve Bank of
New York.
"Payment Date" shall mean the first Business Day of each calendar
month.
"Permitted Liens" shall mean, as applied to any specified Person:
(a) Any Lien in favor of the Administrative Agent or the
Banks given to secure the Obligations;
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(b) (i) Liens on real estate for real estate taxes
not yet delinquent and (ii) Liens for taxes, assessments, judgments,
governmental charges or levies, or claims the non-payment of which is being
contested in good faith by appropriate proceedings and for which adequate
reserves have been set aside on such Person's books, but only so long as no
foreclosure, distraint, sale, or similar proceedings have been commenced with
respect thereto and which remain unstayed for a period of thirty (30) days
after their commencement;
(c) Liens of carriers, warehousemen, mechanics, laborers,
and materialmen incurred in the ordinary course of business for sums not yet
due or being contested in good faith, if such reserve or appropriate provision,
if any, as shall be required by GAAP shall have been made therefor;
(d) Liens incurred in the ordinary course of business in
connection with worker's compensation and unemployment insurance;
(e) Restrictions on the transfer of assets imposed by any
agreement, or by any federal, state or local statute, regulation or ordinance
applicable to such Person;
(f) Easements, rights-of-way, restrictions, and other
similar encumbrances on the use of real property which do not interfere with
the ordinary conduct of the business of such Person, or Liens incidental to the
conduct of the business of such Person or to the ownership of its properties
which were not incurred in connection with Indebtedness or other extensions of
credit and which do not in the aggregate materially detract from the value of
such properties or materially impair their use in the operation of the business
of such Person;
(g) Purchase money mortgages or security interests,
conditional sale arrangements and other similar security interests and
mortgages or security interests subject to which such property is acquired
(together with any renewal or other refinancing thereof), on any property or
assets hereinafter acquired by such Person (hereafter referred to individually
as a "Purchase Money Security Interest"); provided, however, that:
(i) the transaction in which any Purchase Money
Security Interest is proposed to be created is not otherwise prohibited
by this Agreement;
(ii) any Purchase Money Security Interest shall
attach only to the property or asset acquired in such transaction and
shall not extend to or cover any other assets or properties of such
Person;
(iii) the Indebtedness secured or covered by any
Purchase Money Security Interest shall not exceed the cost of the
property or asset acquired; and
(iv) the Indebtedness secured by Purchase Money
Security Interests shall be Nonrecourse to the Borrower or any of its
Subsidiaries;
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(h) Liens of record on the Agreement Date as set forth on
Schedule 2 attached hereto;
(i) Liens securing Indebtedness permitted under Section
7.1 hereof; and
(j) leases with respect to which Borrower (or any of its
Subsidiaries) is the lessor with respect to real property owned by the Borrower
or such Subsidiary and which are entered into by the Borrower or such
Subsidiary in the ordinary course of its business.
"Person" shall mean an individual, corporation, partnership, limited
liability company, trust, or unincorporated organization, or a government or
any agency or political subdivision thereof.
"Plan" shall mean an employee benefit plan within the meaning of
Section 3(3) of ERISA maintained by or contributed to by the Borrower or any
ERISA Affiliate.
"Prime Rate" shall mean, at any time, the fluctuating and floating rate
per annum equal to the rate of interest announced by the Administrative Agent
as its reference rate for the determination of interest rates for loans of
varying maturities in U.S. Dollars to United States residents of varying
degrees of creditworthiness and being quoted by the Administrative Agent as its
"prime rate." The Prime Rate is not necessarily the lowest rate of interest
charged to borrowers of the Administrative Agent.
"Prime Rate Advance" shall mean an Advance which the Borrower requests
to be made as a Prime Rate Advance or is deemed to be a Prime Rate Advance in
accordance with the provisions of Section 2.2 hereof.
"Prime Rate Basis" shall mean a simple interest rate per annum equal to
the Prime Rate. The Prime Rate Basis shall be adjusted automatically as of the
opening of business on the effective date of each change in the Prime Rate to
account for such change.
"Property" shall mean any real property or personal property, plant,
building, facility, structure, underground storage tank or unit, equipment,
inventory or other asset owned, leased or operated by the Borrower or any of
its Subsidiaries (including, without limitation, any surface water thereon or
adjacent thereto and soil and groundwater thereunder).
"REIT" shall mean a Real Estate Investment Trust (or REIT) as such term
is defined in the Code.
"Reportable Event" shall have the meaning set forth in Section 4043(b)
of ERISA.
"Request for Advance" shall mean any certificate signed by an
Authorized Signatory of the Borrower requesting an Advance hereunder which will
increase the aggregate amount of the Loans outstanding, which certificate shall
be denominated a "Request for Advance," and shall be in substantially the form
of Exhibit B attached hereto. Each Request for Advance shall, among other
things, (a) specify the date of the Advance, which shall be a Business Day, (b)
specify the amount
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of the Advance and the use of the proceeds thereof, (c) the type of the
Advance, (d) with respect to LIBOR Advances, the Interest Period selected by
the Borrower, (e) state that there shall not exist, on the date of the
requested Advance and after giving effect thereto, a Default or an Event of
Default, and (f) state that all conditions precedent to the making of the
Advance have been satisfied.
"S&P" shall mean Standard & Poor's Ratings Group, a division of
McGraw-Hill, Inc.
"Senior Management" shall mean the Chairman and Chief Executive
Officer, President and Chief Operating Officer and Executive Vice President and
Chief Financial Officer of the Borrower.
"Solvent" shall mean, with respect to any Person on a particular date,
that on such date (i) the fair value of the property (tangible or intangible)
of such Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person, (ii) the amount
that will be required to pay the probable liabilities of such Person on its
debts as they become absolute and matured will not be greater than the fair
salable value of the assets of such Person at such time, (iii) such Person is
able to realize upon its assets and pay its debts and other liabilities,
contingent obligations and other commitments as they mature in the normal
course of business, and (iv) such Person is not engaged in a business or a
transaction, and is not about to engage in a business or a transaction, for
which such Person's property would constitute unreasonably small capital after
giving due consideration to prevailing practices in the industry in which such
Person is engaged. In computing the amount of any contingent liability at any
time, it is intended that such liability will be computed at the amount which,
in light of all the facts and circumstances existing at such time, represents
the amount that might reasonably be expected to become an actual or matured
liability.
"Subsidiary" shall mean, as applied to any Person, (a) any corporation
of which fifty percent (50%) or more of the outstanding stock (other than
directors' qualifying shares) having ordinary voting power to elect a majority
of its board of directors, regardless of the existence at the time of a right
of the holders of any class or classes of securities of such corporation to
exercise such voting power by reason of the happening of any contingency, or
any partnership of which fifty percent (50%) or more of the outstanding
partnership interests is at the time owned by such Person, or by one or more
Subsidiaries of such Person, or by such Person and one or more Subsidiaries of
such Person, and (b) any other entity which is controlled or capable of being
controlled by such Person, or by one or more Subsidiaries of such Person, or by
such Person and one or more Subsidiaries of such Person.
"Total Assets" shall mean, as of any date, (a) the sum of (i) the
undepreciated book value of all real estate assets of the Borrower plus (ii)
the aggregate book value of all other assets of the Borrower, determined in
accordance with GAAP, less (b) the book value of all intangible assets of the
Borrower determined in accordance with GAAP.
"Total Liabilities" shall mean, as of any date, all items shown as
liabilities on the Borrower's consolidated balance sheet and shall include,
without limitation, all contingent liabilities and subordinated debt of the
Borrower.
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<PAGE> 18
"Unencumbered Real Estate Assets" shall mean the interest in real
property (excluding raw land) which is owned by the Borrower or any of its
wholly-owned Subsidiaries and which is not subject to any mortgage debt or
security interests and shall include, without limitation, all Borrower held
mortgage note receivables.
"Unsecured Senior Debt" shall mean the sum of (a) the Obligations and
(b) Indebtedness for Money Borrowed of the type permitted under Section 7.1(h)
hereof, exclusive of Indebtedness for Money Borrowed which is subordinated to
the Obligations on terms satisfactory to the Majority Banks and Indebtedness
for Money Borrowed which is secured by assets of the Borrower or any of its
Subsidiaries.
"Use" means use, ownership, development, construction, maintenance,
management, operation or occupancy.
"Value of Negative Pledge Property" shall mean, as of any calculation
date, the aggregate sum of the NOI for all Negative Pledge Properties as of the
last day of the most recently completed fiscal quarter (or fiscal year), for
the twelve (12) consecutive months immediately preceding such last day of the
most recently completed fiscal quarter (or fiscal year) capitalized at a rate
of ten percent (10%).
"Value of Unencumbered Real Estate Assets" shall mean, as of any
calculation date, the sum of (a) the NOI for all Unencumbered Real Estate
Assets (other than property held for sale and mortgage note receivables) as of
the last day of the most recently completed fiscal quarter (or fiscal year),
for the twelve (12) consecutive months immediately preceding such date
capitalized at a rate of ten percent (10%), (b) the Net Book Value of property
of the Borrower held for sale, and (c) the carrying value (as set forth on the
Borrower's most recent financial statement) of all Borrower held mortgage note
receivables.
Each definition of an agreement in this Article 1 shall include such
agreement as modified, amended, or supplemented from time to time with the
prior written consent of the Majority Banks, except as provided in Section
11.12 hereof, and except where the context otherwise requires, definitions
imparting the singular shall include the plural and vice versa. Except where
otherwise specifically restricted, reference to a party to a Loan Document
includes that party and its successors and assigns. All terms used herein
which are defined in Article 9 of the Uniform Commercial Code in effect in the
State of Georgia on the date hereof and which are not otherwise defined herein
shall have the same meanings herein as set forth therein.
All accounting terms used herein without definition shall be used as
defined under GAAP.
ARTICLE 2 - Loans.
Section 2.1 The Loans. Subject to the terms and conditions of
this Agreement, the Banks agree, severally in accordance with their Commitment
Ratios, and not jointly, upon the terms and subject to the conditions of this
Agreement, to lend and relend to the Borrower, prior to the
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<PAGE> 19
Maturity Date, amounts which in the aggregate at any one time outstanding do
not exceed the Available Commitment.
Section 2.2 Manner of Borrowing and Disbursement.
(a) Choice of Interest Rate, Etc. Any Advance shall, at
the option of the Borrower, be made as a Prime Rate Advance or a LIBOR Advance;
provided, however, that (i) if the Borrower fails to give the Administrative
Agent written notice specifying whether an Advance is to be repaid or
reborrowed on the last day of the applicable Interest Period, such Advance
shall be repaid and then reborrowed as a Prime Rate Advance on the last day of
the applicable Interest Period and (ii) the Borrower may not select a LIBOR
Advance if, at the time of such selection, a Default has occurred and is
continuing. LIBOR Advances shall in all cases be subject to Section 2.3(e) and
Article 10 hereof. Any notice given to the Administrative Agent in connection
with a requested Advance hereunder or a requested adjustment of an Interest
Rate Basis hereunder shall be given to the Administrative Agent prior to 11:00
a.m. (Eastern time) on a Business Day in order for such Business Day to count
toward the minimum number of Business Days required.
(b) Prime Rate Advances.
(i) Initial Advances. The Borrower, prior to
11:00 a.m. (Eastern Time) on the Business Day immediately preceding the
date of the advance, shall give to the Administrative Agent in the case
of Prime Rate Advances an irrevocable written notice in the form of a
Request for Advance, or notice by telecopy followed immediately by a
Request for Advance; provided, however, that the failure by the
Borrower to confirm any notice by telecopy with a Request for Advance
shall not invalidate any notice so given.
(ii) Repayments and Interest Rate Adjustments.
Upon irrevocable prior written notice delivered to the Administrative
Agent prior to 11:00 a.m. (Eastern Time) (A) on the day of payment
under this subsection, the Borrower may repay a Prime Rate Advance
without regard to its Payment Date, or (B) at least three (3) Business
Days prior to the date of any Interest Rate Basis adjustment, the
Borrower may request that the Administrative Agent reset the Interest
Rate Basis to the LIBOR Basis for all or any portion of a Prime Rate
Advance without regard to its Payment Date. The determination of any
LIBOR Basis hereunder shall be made in accordance with Section 2.2(c)
hereof. Upon the effective date of an Interest Rate Basis adjustment
hereunder, that portion of the Prime Rate Advance so adjusted shall be
treated for all purposes hereunder as a LIBOR Advance.
(c) LIBOR Advances.
(i) Initial Advances. The Borrower shall give
the Administrative Agent in the case of LIBOR Advances at least (A)
three (3) Business Days irrevocable verbal notice, and (B) two (2)
Business Days irrevocable written notice in the form of a Request for
Advance, or notice by telecopy followed immediately by a Request for
Advance; provided, however, that the failure of the Borrower to confirm
any notice by telecopy with a Request
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for Advance shall not invalidate any notice so given. The
Administrative Agent, whose determination shall be conclusive, shall
determine the available LIBOR Bases and shall notify the Borrower of
such LIBOR Bases. The Borrower shall promptly notify the
Administrative Agent by telecopy or by telephone, and shall immediately
confirm any such telephonic notice in writing, of its selection of a
LIBOR Basis and the Interest Period for such Advance or Borrower's
decision not to borrow a LIBOR Advance or have the Interest Rate Basis
adjusted, as the case may be.
(ii) Repayments and Interest Rate Adjustment. At
least three (3) Business Days prior to the last day of the applicable
Interest Period for a LIBOR Advance, the Borrower shall give the
Administrative Agent written notice specifying whether all or a portion
of any LIBOR Advance outstanding on the last day of the applicable
Interest Period (i) is to have the LIBOR Basis reset to a new LIBOR
Basis for an additional period, (ii) is to have the LIBOR Basis reset
to the Prime Rate Basis, or (iii) is to be repaid and not reborrowed.
Upon the last day of the applicable Interest Period such LIBOR Advance
will, subject to the provisions hereof, be so repaid or, as applicable,
shall be treated for all purposes hereunder as a LIBOR Advance (having
an Interest Period and LIBOR Basis selected in accordance with Section
2.2(c)(i) hereof) or a Prime Rate Advance.
(d) Notification of Banks. Upon receipt of a Request for
Advance or notice by telephone or telecopy, the Administrative Agent shall
promptly (and with respect to LIBOR Advances, not less than two (2) Business
Days prior to the date of such Advance) notify each Bank by telephone or
telecopy of the contents thereof and the amount of such Bank's portion of the
applicable Advance. Each Bank shall, not later than 12:00 noon (Eastern time)
on the date specified in such notice, make available to the Administrative
Agent at the Administrative Agent's Office, or at such account as the
Administrative Agent shall designate, the amount of its portion of the
applicable Advance in immediately available funds.
(e) Disbursement.
(i) Prior to 2:00 p.m. (Eastern time) on the date
of an Advance hereunder, the Administrative Agent shall, subject to the
satisfaction of the conditions set forth in this Section 2.2 and in
Article 3 hereof, disburse the amounts made available to the
Administrative Agent by the Banks in immediately available funds by
crediting the amounts so made available to the account of the Borrower
maintained with the Administrative Agent or an affiliate of the
Administrative Agent.
(ii) Unless the Administrative Agent shall have
received notice from a Bank prior to the date of any Advance that such
Bank will not make available to the Administrative Agent such Bank's
ratable portion of such Advance, and so long as notice has been given
as provided in Section 2.2 hereof, the Administrative Agent may assume
that such Bank has made such portion available to the Administrative
Agent on the date of such Advance and the Administrative Agent may, in
its sole discretion and in reliance upon such assumption, without any
obligation hereunder to do so, make available to the Borrower on such
date a corresponding amount. If and to the extent such Bank shall not
have so made such ratable
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<PAGE> 21
portion available to the Administrative Agent, such Bank agrees to
repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from
the date such amount is made available to the Borrower until the date
such amount is repaid to the Administrative Agent for the first two (2)
days that such amount is not repaid, at the Overnight Federal Funds
Rate, and, thereafter, at the Overnight Federal Funds Rate plus four
percent (4%).
(iii) If such Bank shall repay to the
Administrative Agent such corresponding amount, such amount so repaid
shall constitute such Bank's portion of the applicable Advance for
purposes of this Agreement. If such Bank does not repay such
corresponding amount immediately upon the Administrative Agent's demand
therefor, the Administrative Agent shall notify the Borrower, and the
Borrower shall pay such corresponding amount to the Administrative
Agent, together with all interest accrued thereon and on the same terms
and conditions that would have applied to such Advance had such Bank
funded its portion thereof. The failure of any Bank to fund its
portion of any Advance shall not relieve any other Bank of its
obligation, if any, hereunder to fund its respective portion of the
Advance on the date of such borrowing, but no Bank shall be responsible
for any such failure of any other Bank.
(iv) In the event that, at any time when the
Borrower is not in Default, a Bank for any reason fails or refuses to
fund its portion of an Advance, then, until such time as such Bank has
funded its portion of such Advance, or all other Banks have received
payment in full (whether by repayment or prepayment) of the principal
and interest due in respect of such Advance, such non-funding Bank
shall (i) have no right to vote regarding any issue on which voting is
required or advisable under this Agreement or any other Loan Document,
and (ii) not be entitled to receive payments of principal, interest or
fees from the Borrower in respect of such Advances which such Bank
failed to make. The provisions of this Section 2.2(e) will not impact
upon any remedies of the Borrower with respect to any Bank which fails
to fund an Advance hereunder at a time when the Borrower is otherwise
in compliance with this Agreement.
Section 2.3 Interest.
(a) On Prime Rate Advances. Interest on each Prime Rate
Advance shall be computed on the basis of a 360-day year for the actual number
of days elapsed and shall be payable at the Prime Rate Basis for such Advance
in arrears on each Payment Date. Interest on Prime Rate Advances then
outstanding shall also be due and payable on the Maturity Date.
(b) On LIBOR Advances. Interest on each LIBOR Advance
shall be computed on the basis of a 360-day year for the actual number of days
elapsed and shall be payable at the LIBOR Basis for such Advance in arrears on
each Payment Date without regard to the duration of any Interest Period.
Interest on LIBOR Advances then outstanding shall also be due and payable on
the Maturity Date.
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<PAGE> 22
(c) Interest if no Notice of Selection of Interest Rate
Basis. If the Borrower fails to give the Administrative Agent timely notice of
its selection of a LIBOR Basis or if for any reason (other than the gross
negligence or willful misconduct of the Administrative Agent) a determination
of a LIBOR Basis for any Advance is not timely concluded, the Prime Rate Basis
shall apply to such Advance.
(d) Upon Default. Upon the occurrence and during the
continuance of an Event of Default, the Majority Banks shall have the option
(but shall not be required to give prior notice thereof to the Borrower, to
accelerate the maturity of the Loans, or to exercise any other rights or
remedies hereunder in connection with the exercise of this right) to charge
interest on the outstanding principal balance of the Loans at the Default Rate
from the date of such Event of Default. Such interest shall be payable on the
earlier of DEMAND or the Maturity Date and shall accrue until the earlier of
(i) waiver or cure (to the satisfaction of the Majority Banks) of the
applicable Event of Default, (ii) agreement by the Majority Banks to rescind
the charging of interest at the Default Rate, or (iii) payment in full of the
Obligations.
(e) LIBOR Advances. At no time may the number of
outstanding LIBOR Advances exceed six (6).
Section 2.4 Fees and Commissions.
(a) Commitment Fee. The Borrower agrees to pay to the
Administrative Agent for the benefit of the Banks, in accordance with their
respective Commitment Ratios, a one-time commitment fee in the amount of
three-eighths of one percent (3/8%) times the Commitment. Such commitment fee
shall be due and payable on the Agreement Date and shall be fully earned when
due and non-refundable when paid.
(b) Utilization Fee. The Borrower agrees to pay to the
Administrative Agent for the benefit of the Banks, in accordance with their
respective Commitment Ratios, a utilization fee on the average unborrowed
Available Commitment for each day from the Agreement Date through the Maturity
Date, at a rate of one-quarter of one percent (.25%) per annum. Such
utilization fee shall be computed on the basis of a year of 365/366 days for
the actual number of days elapsed, shall be payable quarterly in arrears on the
first day of each calendar quarter, commencing on January 2, 1996, and if then
unpaid, on the Maturity Date, and shall be fully earned when due and
nonrefundable when paid.
(c) Extension Fee. The Borrower agrees to pay to the
Administrative Agent for the benefit of the Banks, in accordance with their
respective Commitment Ratios, an extension fee in the amount of one-eighth of
one percent (1/8%) times the Commitment. Such extension fee shall be due and
payable on the effective date of any extension granted hereunder and shall be
fully earned when due and non-refundable when paid.
(d) Late Payment Charge. If the Borrower fails to make
any payment of principal, interest or fees hereunder as and when due, the
Borrower shall pay to the Administrative
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<PAGE> 23
Agent for the ratable benefit of the Banks, a late charge in an amount equal to
four percent (4%) of the amount of such delinquent payment.
Section 2.5 Reduction of Commitment. The Borrower shall have the
right, at any time and from time to time after the Agreement Date and prior to
the Maturity Date, upon at least three (3) Business Days' prior written notice
to the Administrative Agent, without premium or penalty, to cancel or reduce
permanently all or a portion of the Commitment, on a pro rata basis among the
Banks, provided that any such partial reduction shall be made in an amount not
less than $10,000,000 and in integral multiples of not less than $1,000,000.
As of the date of cancellation or reduction set forth in such notice, the
Commitment shall be permanently reduced to the amount stated in the Borrower's
notice for all purposes herein, and the Borrower shall, subject to Section 2.11
hereof, pay to the Administrative Agent for the account of the Banks the amount
necessary to reduce the principal amount of the Loans then outstanding under
the Commitment to not more than the amount of the Commitment as so reduced,
and, if such amount is a payment in full of the Loans, together with accrued
interest on the amount so prepaid.
Section 2.6 Prepayment. LIBOR Advances may be prepaid prior to
the applicable Payment Date, upon three (3) Business Day's prior written notice
to the Administrative Agent, provided that the Borrower, in the event of
prepayment for any reason, shall reimburse the Banks and the Administrative
Agent, on the earlier of demand or the Maturity Date, for any loss or
out-of-pocket expense incurred by the Banks or the Administrative Agent in
connection with such prepayment, as set forth in Section 2.11. Any notice of
prepayment shall be irrevocable and all amounts prepaid on the Loans shall be
applied first to interest and fees and other amounts due and payable hereunder,
and then to principal. Partial prepayments of LIBOR Advances shall be in a
principal amount of not less than $100,000 and in an integral multiple of
$100,000.
Section 2.7 Repayment.
(a) Loans Exceeding Commitment. If, at any time, the
amount of the Loans then outstanding shall exceed the lesser of (i) the
Commitment or (ii) the Availability Restriction, the Borrower shall make a
repayment of the principal amount of the Loans in an amount equal to such
excess.
(b) Maturity. In addition to the foregoing, a final
payment of all Obligations then outstanding shall be due and payable on the
Maturity Date.
Section 2.8 Notes; Loan Accounts.
(a) The Loans shall be repayable in accordance with the
terms and provisions set forth herein, and shall be evidenced by the Notes.
One of the Notes shall be payable to the order of each Bank in accordance with
the respective Commitment Ratio of the Bank. The Notes shall be issued by the
Borrower to each of the Banks and shall be duly executed and delivered by
Authorized Signatories.
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<PAGE> 24
(b) Each Bank may open and maintain on its books in the
name of the Borrower a loan account with respect to the Loans and interest
thereon. Each Bank which opens such loan account or accounts shall debit the
applicable loan account for the principal amount of each Advance made by it and
accrued interest thereon, and shall credit such loan account for each payment
on account of principal of or interest on the Loans. The records of each Bank
with respect to the accounts maintained by it shall be prima facie evidence of
the Loans and accrued interest thereon, but the failure to maintain such
records shall not impair the obligation of the Borrower to repay Indebtedness
hereunder.
(c) Each Advance from the Banks under this Agreement shall
be made pro rata on the basis of their respective Commitment Ratios.
Section 2.9 Manner of Payment.
(a) Each payment (including any prepayment) by the
Borrower on account of the principal of or interest on its Loans, fees, and any
other amount owed to the Banks or the Administrative Agent under this
Agreement, the Notes, or the other Loan Documents shall be made not later than
12:00 noon (Eastern time) on the date specified for payment under this
Agreement or such other Loan Document to the Administrative Agent to an account
designated by the Administrative Agent, for the account of the Banks or the
Administrative Agent, as the case may be, in lawful money of the United States
of America in immediately available funds. Any payment received by the
Administrative Agent after 12:00 noon (Eastern time) shall be deemed received
on the next Business Day for purposes of interest accrual. In the case of a
payment for the account of a Bank, the Administrative Agent will promptly
thereafter distribute the amount so received in like funds to such Bank. In
the event that the Administrative Agent does not promptly distribute such
amounts, the Administrative Agent shall pay interest on such amounts to the
Banks at the Overnight Federal Funds Rate until such amounts are distributed.
If the Administrative Agent shall not have received any payment from the
Borrower as and when due, the Administrative Agent will promptly notify the
Banks accordingly and the Administrative Agent shall not be obligated to make
any distributions under this Section 2.9.
(b) If any payment under this Agreement or any of the
Notes shall be specified to be made upon a day which is not a Business Day, it
shall be made on the next succeeding day which is a Business Day, and such
extension of time shall in such case be included in computing interest and
fees, if any, in connection with such payment.
(c) The Borrower agrees to pay principal, interest, fees,
and all other amounts due hereunder or under the Notes without set-off or
counterclaim or any deduction whatsoever.
(d) If the Borrower is required by Applicable Law to
deduct any taxes from or in respect of any sum payable to the Administrative
Agent or any Bank hereunder, under any Note or under any other Loan Document:
(i) the sum payable hereunder or thereunder, as applicable, shall be increased
to the extent necessary to provide that, after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.9(d)), the Administrative Agent or such Bank, as applicable, receives an
amount equal to the sum it would have received had
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<PAGE> 25
no such deductions been made; (ii) the Borrower shall make such deductions from
such sums payable hereunder or thereunder, as applicable, and pay the amount so
deducted to the relevant taxing authority as required by Applicable Law; and
(iii) the Borrower shall provide the Administrative Agent or such Bank, as
applicable, with evidence satisfactory to the Administrative Agent or such
Bank, as applicable, that such deducted amounts have been paid to the relevant
taxing authority. Before making any such deductions, such Bank shall designate
a different lending office and shall take such alternative courses of action if
such designation or alternative courses of action will avoid the need for such
deductions and will not in the good faith judgment of such Bank be otherwise
disadvantageous to such Bank.
Section 2.10 Application of Payments. Payments made to the
Administrative Agent or the Banks, or any of them, or otherwise received by the
Administrative Agent or the Banks, or any of them (from realization on
collateral for the Obligations or otherwise), shall be distributed (subject to
Section 2.2(e) hereof) as follows: First, to the costs and expenses, if any,
incurred by the Administrative Agent or the Banks, or any of them, to the
extent permitted by Section 11.2 hereof in the collection of such amounts under
this Agreement or any of the other Loan Documents, including, without
limitation, any reasonable costs incurred in connection with the sale or
disposition of any collateral for the Obligations; Second, pro rata among the
Administrative Agent and the Banks based on the total amount of fees then due
and payable hereunder or under any other Loan Document and to any other fees
and commissions then due and payable by the Borrower to the Banks and the
Administrative Agent under this Agreement or any Loan Document; Third, to any
unpaid interest of the Borrower which may have accrued on the Loans, pro rata
among the Banks based on the outstanding principal amount of the Loans of the
Borrower outstanding immediately prior to such payment; Fourth, pro rata among
the Banks based on the outstanding principal amount of the Loans of the
Borrower outstanding immediately prior to such payment, to any unpaid principal
of the Loans of the Borrower; Fifth, to any other Obligations not otherwise
referred to in this Section 2.10 until all such Obligations are paid in full;
Sixth, to damages incurred by the Administrative Agent or the Banks, or any of
them, by reason of any breach hereof or of any other Loan Documents; and
Seventh, upon satisfaction in full of all Obligations, to the Borrower or as
otherwise required by law. If any Bank shall obtain any payment (whether
involuntary or otherwise) on account of the Loans made by it in excess of its
ratable share of the Loans then outstanding and such Bank's share of any
expenses, fees and other items due and payable to it hereunder, such Bank shall
forthwith purchase a participation in the Loans from the other Banks as shall
be necessary to cause such purchasing Bank to share the excess payment ratably
based on the Commitment Ratios with each of them; provided, however, that if
all or any portion of such excess payment is thereafter recovered from such
purchasing Bank, such purchase from each Bank shall be rescinded and such Bank
shall repay to the purchasing Bank the purchase price to the extent of such
recovery. The Borrower agrees that any Bank so purchasing a participation from
another Bank pursuant to this Section may, to the fullest extent permitted by
law, exercise all its rights of payment with respect to such participation as
fully as if such Bank were the direct creditor of the Borrower in the amount of
such participation so long as the Borrower's Obligations are not increased.
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<PAGE> 26
Section 2.11 Reimbursement.
(a) Whenever any Bank shall sustain or incur any losses or
out-of-pocket expenses in connection with the repayment of a LIBOR Advance
prior to the end of the Interest Period for such Advance or failure by the
Borrower to borrow any LIBOR Advance after having given notice of its intention
to borrow in accordance with Section 2.2 hereof (whether by reason of the
election of the Borrower not to proceed or the non-fulfillment of any of the
conditions set forth in Article 3), the Borrower agrees to pay to such Bank,
upon the earlier of such Bank's demand or the Maturity Date, an amount
sufficient to compensate such Bank for all such losses. The amount of such
losses, absent manifest error, shall be binding and conclusive. Upon request
of the Borrower, such Bank shall provide a certificate setting forth the amount
to be paid to it by the Borrower hereunder and calculations therefor.
(b) Losses subject to reimbursement hereunder shall
include, without limiting the generality of the foregoing, any lost profit of
any Bank or any participant of such Bank over the remainder of the Interest
Period for such prepaid Advance.
Section 2.12 Capital Adequacy. If after the date hereof, any Bank
shall have determined that the adoption of any Applicable Law regulating United
States banks and regarding the capital adequacy of banks or bank holding
companies, or any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or
comparable agency of the U.S. charged with the interpretation or administration
thereof, or compliance by the Bank with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such
Governmental Authority, central bank or comparable agency, has the effect of
reducing the rate of return on such Bank's capital as a consequence of its
obligations hereunder to a level below that which it could have achieved but
for such adoption, change or compliance (taking into consideration such Bank's
policies with respect to capital adequacy immediately before such adoption,
change or compliance and assuming that such Bank's capital was fully utilized
prior to such adoption, change or compliance) by a material amount, then, upon
the earlier of demand by such Bank or the Maturity Date, the Borrower agrees to
pay immediately to such Bank, such additional amounts as shall be sufficient to
compensate such Bank for such reduced return beginning as of the date of
written notice to the Borrower described above, together with interest on such
amount from the fourth (4th) day after the date of demand or the Maturity Date,
as applicable, until payment in full thereof at the Default Rate. A
certificate of such Bank setting forth the amount to be paid to such Bank by
the Borrower as a result of any event referred to in this paragraph shall,
absent manifest error, be conclusive. Each Bank agrees that if any amount or
any portion of any amount described in this Section is subsequently recovered
by such Bank, such Bank shall promptly reimburse the Borrower to the extent of
the amount so recovered. A certificate of such Bank setting forth the amount
of such recovery and the basis therefor shall be provided to the Borrower.
Section 2.13 Bank Tax Forms. On or prior to the Agreement Date and
on or prior to the first Business Day of each calendar year thereafter, each
Bank which is organized in a jurisdiction other than the United States shall
provide each of the Administrative Agent and the Borrower with properly
executed originals of Forms 4224 or 1001 (or any successor form) prescribed by
the Internal Revenue Service or other documents satisfactory to the Borrower
and the Administrative
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<PAGE> 27
Agent, and each such Bank shall provide properly executed Internal Revenue
Service Forms W-8 or W-9, as the case may be, certifying (i) as to such Bank's
status for purposes of determining exemption from United States withholding
taxes with respect to all payments to be made to such Bank hereunder and under
the Notes or (ii) that all payments to be made to such Bank hereunder and under
the Notes are subject to such taxes at a rate reduced to zero by an applicable
tax treaty. Each such Bank agrees to provide the Administrative Agent and the
Borrower with new forms prescribed by the Internal Revenue Service upon the
expiration or obsolescence of any previously delivered form, or after the
occurrence of any event requiring a change in the most recent forms delivered
by it to the Administrative Agent and the Borrower.
Section 2.14 Extension of the Maturity Date. Not later than June
30th of each year commencing June 30, 1996, the Borrower may request that the
Administrative Agent and the Banks extend the Maturity Date for an additional
twelve (12) month period beyond the existing Maturity Date. Any decision to
extend the Maturity Date shall be in the sole and absolute discretion of the
Administrative Agent and the Banks and shall be evidenced in a writing executed
by each of them, as appropriate. The failure of any such Person to respond to
a request for such extension within sixty (60) days of such request shall be
presumed to be a decision not to so extend the Maturity Date. Upon any
agreement by the Administrative Agent and all of the Banks to extend the
Maturity Date as described in this Section, the term "Maturity Date" set forth
in Article 1 hereof shall thereafter be the anniversary of the Maturity Date
previously in effect hereunder (or such earlier date as payment of the Loans
shall be due, whether by acceleration or otherwise). Any such extension
granted hereunder shall be conditioned upon the receipt by the Banks of the
Extension Fee referenced in Section 2.4(c) hereof.
ARTICLE 3 - Conditions Precedent.
Section 3.1 Conditions Precedent to Initial Advance. The
obligation of the Banks to undertake the Commitment and to make the initial
Advance hereunder is subject to the prior fulfillment of each of the following
conditions:
(a) The Administrative Agent shall have received each of
the following, in form and substance satisfactory to the Banks:
(i) duly executed Notes;
(ii) the opinion of counsel to the
Borrower addressed to each Bank and the Administrative Agent
substantially in the form of Exhibit C attached hereto;
(iii) the duly executed Request for Advance
for the initial Advance of the Loans;
(iv) the loan certificate of the Borrower,
including a certificate of incumbency with respect to each Authorized
Signatory of the Borrower, which shall be in substantially the form
attached hereto as Exhibit D hereto, together with appropriate
attachments which shall include without limitation, the following
items: (A) a copy of the
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<PAGE> 28
Certificate or Articles of Incorporation of the Borrower, certified to
be true, complete and correct by the appropriate Secretary of State,
(B) a true, complete and correct copy of the By-Laws of the Borrower,
as in effect on the date hereof, (C) a true, complete and correct copy
of the resolutions of the Borrower authorizing it to execute, deliver
and perform this Agreement and the other Loan Documents to which it is
party, (D) certificates of good standing for the Borrower issued by the
Secretary of State or similar state official for the state of
incorporation of the Borrower and for each state in which the Borrower
is qualified to do business, (E) a true, complete and correct copy of
any shareholders' agreement or voting trust agreement in effect with
respect to the stock of the Borrower, and (F) a true, complete and
correct description of all Liens of record on the Agreement Date;
(v) audited financial statements for the
Borrower for the calendar year ended December 31, 1994, and the
unaudited financial statements for the Borrower for the quarter ended
September 30, 1995;
(vi) receipt by the Administrative Agent
and the Banks of all appropriate fees to be paid to them by the
Borrower on or prior to the Agreement Date;
(vii) any required consents to the closing
of this Agreement or to the execution, delivery and performance of this
Agreement and the other Loan Documents, each of which shall be in form
and substance satisfactory to the Administrative Agent and the Banks;
(viii) pay off letters and duly executed
UCC-3 releases and other forms of satisfaction terminating any Liens
(other than Permitted Liens) on the Negative Pledge Properties; and
(ix) all such other documents as the
Administrative Agent may reasonably request, certified by an
appropriate governmental official or Authorized Signatory if so
requested.
(b) The Administrative Agent shall have received evidence
satisfactory to it that all material Necessary Authorizations, including all
necessary consents to the closing of this Agreement, have been obtained or
made, are in full force and effect and are not subject to any pending or, to
the knowledge of the Borrower, threatened reversal or cancellation, and the
Administrative Agent shall have received a certificate of an Authorized
Signatory so stating.
(c) The Borrower shall certify to the Administrative Agent
and the Banks that each of the representations and warranties in Article 4
hereof are true and correct in all material respects as of the Agreement Date
and that no Default then exists or is continuing.
Section 3.2 Conditions Precedent to Each Advance. The obligation
of each Bank to make each Advance, including the initial Advance hereunder is
subject to the fulfillment of each of the following conditions immediately
prior to or contemporaneously with such Advance:
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(a) All of the representations and warranties of the
Borrower under this Agreement, which, in accordance with Section 4.2 hereof,
are made at and as of the time of the Advance, shall be true and correct in all
material respects at such time, both before and after giving effect to the
application of the proceeds of the Advance;
(b) The incumbency of the Authorized Signatories shall be
as stated in the applicable certificate of incumbency contained in the
certificate of the Borrower delivered pursuant to Section 3.1(a) hereof or as
subsequently modified and reflected in a certificate of incumbency delivered to
the Administrative Agent and the Banks;
(c) There shall not exist, on the date of the making of
the Advance and after giving effect thereto, a Default or an Event of Default
hereunder and, the Administrative Agent shall have received a Request for
Advance so certifying; and
(d) The Administrative Agent shall have received all such
other certificates, reports, statements, opinions of counsel or other documents
as they may reasonably request.
ARTICLE 4 - Representations and Warranties.
Section 4.1 Representations and Warranties. The Borrower hereby
agrees, represents, and warrants that:
(a) Organization; Ownership; Power; Qualification;
Capitalization. The Borrower is a corporation duly organized, validly existing
and in good standing under the laws of the State of Georgia. Each of the
Borrower and each of its Subsidiaries has the corporate power and authority to
own its properties and to carry on its business as now being and hereafter
proposed to be conducted. Each of the Borrower and each of its Subsidiaries is
duly qualified, in good standing and authorized to do business in each
jurisdiction in which the character of its properties or the nature of its
businesses requires such qualification or authorization.
(b) Authorization; Enforceability. The Borrower has the
corporate power and has taken all necessary corporate action to authorize it to
borrow hereunder, to execute, deliver and perform this Agreement and each of
the other Loan Documents to which it is a party in accordance with their
respective terms, and to consummate the transactions contemplated hereby and
thereby. This Agreement has been duly executed and delivered by the Borrower
and is, and each of the other Loan Documents to which the Borrower is party is,
a legal, valid and binding obligation of the Borrower enforceable in accordance
with its terms, subject, as to enforcement of remedies, to the following
qualifications: (i) an order of specific performance and an injunction are
discretionary remedies and, in particular, may not be available where damages
are considered an adequate remedy at law, and (ii) enforcement may be limited
by bankruptcy, insolvency, liquidation, reorganization, reconstruction and
other similar laws affecting enforcement of creditors' rights generally
(insofar as any such law relates to the bankruptcy, insolvency or similar event
of the Borrower).
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<PAGE> 30
(c) Subsidiaries. The Borrower has no Subsidiaries except
for IRT Management Company, a Georgia corporation, and VW Mall, Inc., a Georgia
corporation, all of the stock of which is owned and controlled by the Borrower.
(d) Compliance with Other Loan Documents and Contemplated
Transactions. The execution, delivery and performance, in accordance with
their respective terms, by the Borrower of this Agreement and each of the other
Loan Documents to which it is party, and the consummation of the transactions
contemplated hereby and thereby, do not and will not (i) require any consent or
approval not already obtained, (ii) violate any Applicable Law respecting the
Borrower or any of its Subsidiaries, (iii) conflict with, result in a breach
of, or constitute a default under the certificate or articles of incorporation
or by-laws, as amended, of the Borrower or any of its Subsidiaries, or under
any indenture, agreement, or other instrument to which the Borrower or any of
its Subsidiaries is a party or by which its properties may be bound, or (iv)
result in or require the creation or imposition of any Lien upon or with
respect to any property now owned or hereafter acquired by the Borrower or any
of its Subsidiaries except Permitted Liens.
(e) Business. The Borrower and its Subsidiaries are
engaged primarily in the business of acquiring, managing and selling interests
in real property.
(f) Compliance with Law. The Borrower and each of its
Subsidiaries are in compliance with all Applicable Laws, the non-compliance
with which would have a Materially Adverse Effect.
(g) Necessary Authorizations. No approval or consent of,
or filing or registration with, any federal, state or local commission or other
regulatory authority is required in connection with the execution, delivery and
performance by the Borrower of this Agreement, the Notes, and the other Loan
Documents to which it is a party. All such described action required to be
taken as a condition to the execution and delivery of this Agreement, the Notes
and other Loan Documents to which the Borrower is a party has been duly taken
by all such commissions and authorities or other Persons, as the case may be,
and all such action required to be taken as a condition to the initial Advance
hereunder has been or will be duly taken prior to such initial Advance.
(h) Title to Properties. The Borrower and each of its
Subsidiaries have good, marketable, and legal title to, or a valid leasehold
interest in, all of their respective material tangible properties, including,
without limitation, the Negative Pledge Properties, and assets free and clear
of all Liens, except Permitted Liens.
(i) Collective Bargaining. There are no collective
bargaining agreements between the Borrower or any of its Subsidiaries and any
trade or labor union or other employee collective bargaining agent.
(j) Litigation. There is no material action, suit,
proceeding or investigation pending against, or, to the best knowledge of the
Borrower or any of its Subsidiaries threatened against or in any other manner
relating adversely to, the Borrower or any of its Subsidiaries or any of their
properties in any court or before any arbitrator of any kind or before or by
any
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governmental body, and no such action, suit, proceeding or investigation (i)
calls into question the validity of this Agreement or any other Loan Document,
or (ii) could, if determined adversely to any such Person, have a Materially
Adverse Effect.
(k) Taxes. All Federal, state and other tax returns of
the Borrower and each of its Subsidiaries required by law to be filed have been
duly filed and all Federal, state and other taxes, including, without
limitation, withholding taxes, assessments and other governmental charges or
levies required to be paid by the Borrower and each of its Subsidiaries or
imposed upon the Borrower or any of its Subsidiaries or any of their respective
properties, income, profits or assets, which are due and payable, have been
paid, except any such tax (x) the payment of which the Borrower or its
Subsidiary is diligently contesting in good faith by appropriate proceedings,
(y) for which adequate reserves have been provided on the books of the Borrower
and (z) as to which no Lien other than a Permitted Lien has attached and no
foreclosure, distraint, sale or similar proceedings have been commenced. The
charges, accruals and reserves on the books of the Borrower in respect of taxes
are, in the judgment of the Borrower adequate.
(l) Consolidated Financial Statements. The Borrower has
furnished or caused to be furnished to the Administrative Agent copies of the
balance sheets and statements of income for the Borrower for the most
recently-ended fiscal year for which consolidated financial statements are
available and for the quarter ended September 30, 1995, which are complete and
correct in all material respects and present fairly the financial position of
the Borrower on and as at such dates and the results of operations for the
periods then ended. The Borrower has no material liabilities, contingent or
otherwise, other than as disclosed in the consolidated financial statements
referred to in the preceding sentence, and there are no material unrealized
losses of the Borrower and no material anticipated losses of the Borrower other
than those which have been previously disclosed in writing to the Banks and
identified to the Banks as such.
(m) No Adverse Change. Since December 31, 1994, there has
occurred no event which could reasonably be expected to have or which has had a
Materially Adverse Effect.
(n) ERISA. Each of the Borrower and its ERISA Affiliates
and each of their respective Plans are in substantial compliance with ERISA and
the Code and neither the Borrower nor any of its ERISA Affiliates has incurred
any accumulated funding deficiency with respect to any such Plan within the
meaning of ERISA or the Code. The Borrower and each of its ERISA Affiliates
have complied with all requirements of ERISA Sections 601 through 608 and Code
Section 4980B in all material respects. The Borrower has not incurred any
material liability to the Pension Benefit Guaranty Corporation in connection
with any Plan. The assets of each Plan which is subject to Title IV of ERISA
are sufficient to provide the benefits under such Plan, the payment of which
the Pension Benefit Guaranty Corporation would guarantee if such Plan were
terminated, and such assets are also sufficient to provide all other "benefit
liabilities" (as defined in ERISA Section 4001(a)(16)) due under the plan upon
termination. No Reportable Event has occurred and is continuing with respect
to any Plan. No Plan or trust created thereunder, or party in interest (as
defined in Section 3(14) of ERISA, or any fiduciary (as defined in Section
3(21) of ERISA), has engaged in a "prohibited transaction" (as such term is
defined in Section 406 of ERISA or Section 4975 of the Code) which would
subject the Borrower or any ERISA Affiliate to a material
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penalty or tax on "prohibited transactions" imposed by Section 502 of ERISA or
Section 4975 of the Code. Neither the Borrower nor any of its ERISA Affiliates
is a participant in or is obligated to make any payment to a Multiemployer
Plan.
(o) Patents, Trademarks, etc. The Borrower and each of
its Subsidiaries own, possess or have the right to use all licenses and rights
to all patents, trademarks, trademark rights, trade names, trade name rights,
service marks, and copyrights, and rights with respect thereto, necessary to
conduct its business in all material respects as now conducted, without known
conflict with any patent, trademark, trade name, service mark, license or
copyright of any other Person, and in each case, with respect to patents,
trademarks, trademark rights, trade names, trade name and copyrights and
licenses with respect thereto owned by the Borrower and each of its
Subsidiaries, subject to no mortgage, pledge, lien, lease, encumbrance, charge,
security interest, title retention agreement or option. All such licenses and
rights with respect to patents, trademarks, trademark rights, trade names,
trade name rights, service marks and copyrights are in full force and effect,
and to the extent applicable, the Borrower and each of its Subsidiaries is in
full compliance in all material respects with all of the provisions thereof.
No such patent, trademark, trademark rights, trade names, trade name rights,
service marks, copyrights or licenses is subject to any pending or, to the best
of the Borrower's knowledge, threatened attack or revocation. Neither the
Borrower nor any of its Subsidiaries owns any registered copyrights or patents
and the Borrower's and its Subsidiaries' businesses are not subject to any
license (other than general business licenses and permits).
(p) Casualties; Taking of Properties, etc. Since the date
of the most recent financial statements provided to the Administrative Agent
and the Banks by the Borrower, neither the business nor the properties of the
Borrower or any of its Subsidiaries have been materially and adversely affected
as a result of any fire, explosion, earthquake, flood, drought, windstorm,
accident, strike or other labor disturbance, embargo, requisition or taking of
property or cancellation of contracts, permits or concessions by any domestic
or foreign government or any agency thereof, riot, activities of armed forces,
or acts of God or of any public enemy which are not subject to a claim for
reimbursement of insurance.
(q) Accuracy and Completeness of Information. None of the
financial statements or any written statements delivered to the Administrative
Agent or the Banks pursuant to this Agreement contains, as at the date of
delivery thereof, any untrue statement of material fact nor do such financial
statements, and such written statements, taken as a whole, omit to state a
material fact or any fact necessary to make the statements contained therein
not misleading in any material respect.
(r) Compliance with Regulations G, U, and X. Neither the
Borrower nor any of its Subsidiaries is engaged principally or as one of its
important activities in the business of extending credit for the purpose of
purchasing or carrying, and neither the Borrower nor any of its Subsidiaries
owns or presently intends to acquire, any "margin security" or "margin stock"
as defined in Regulations G, U, and X (12 C.F.R. Parts 221 and 224) of the
Board of Governors of the Federal Reserve System (herein called "margin
stock"). None of the proceeds of the Loans will be used, directly or
indirectly, for the purpose of purchasing or carrying any margin stock or for
the
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purpose of reducing or retiring any Indebtedness which was originally incurred
to purchase or carry margin stock or for any other purpose which might
constitute this transaction a "purpose credit" within the meaning of said
Regulations G, U, and X. Neither the Borrower nor any bank acting on its
behalf has taken or will take any action which might cause this Agreement or
the Notes to violate Regulation G, U, or X or any other regulation of the Board
of Governors of the Federal Reserve System or to violate the Securities
Exchange Act of 1934, in each case as now in effect or as the same may
hereafter be in effect. If so requested by a Bank, the Borrower will furnish
such Bank with (i) a statement or statements in conformity with the
requirements of Federal Reserve Forms G-3 and/or U-1 referred to in Regulations
G and U of said Board of Governors and (ii) other documents evidencing its
compliance with the margin regulations, including without limitation an opinion
of counsel in form and substance satisfactory to such Bank. Neither the making
of the Loans nor the use of proceeds thereof will violate, or be inconsistent
with, the provisions of Regulation G, U, or X of said Board of Governors.
(s) Solvency. The Borrower is, and after giving effect to
the transactions contemplated hereby and by the Loan Documents will be,
Solvent.
(t) Broker's or Finder's Commissions. No broker's or
finder's fee or commission will be payable with respect to the issuance of the
Notes, and no other similar fees or commissions will be payable by the Borrower
for any other services rendered to the Borrower ancillary to the transactions
contemplated herein.
(u) Qualification as a REIT. The Borrower has, and after
giving effect to the transactions contemplated herein, will have conducted its
business in a manner designed to qualify (and to remain qualified) as an REIT.
(v) Name of Borrower. The Borrower has not changed its
name within the preceding five (5) years from the Agreement Date, nor has the
Borrower transacted business under any name or tradename during the preceding
five (5) years from the Agreement Date other than under the names of its
shopping center properties.
(w) Investment Company Act. The Borrower is not required
to register under the provisions of the Investment Company Act of 1940, as
amended, and neither the entering into or performance by the Borrower of this
Agreement nor the issuance of the Notes violates any provision of such Act or
requires any consent, approval, or authorization of, or registration with, any
governmental or public body or authority pursuant to any of the provisions of
such Act.
(x) Absence of Default. The Borrower and each of its
Subsidiaries are in compliance with all of the provisions of its certificate or
articles of incorporation and by-laws and no event has occurred or failed to
occur which has not been remedied or waived, the occurrence or non-occurrence
of which constitutes, or with the passage of time or giving of notice or both
would constitute, (i) an Event of Default or (ii) a default by the Borrower or
any of its Subsidiaries under any indenture, agreement or other instrument, or
any judgment, decree or final order to which any such Person is a party or by
which any such Person or any of its properties may be bound or affected.
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(y) Payment of Wages. The Borrower and each of its
Subsidiaries are in compliance with the Fair Labor Standards Act, as amended,
and the Borrower and each Subsidiary have paid all minimum and overtime wages
required by law to be paid to its employees.
(z) Environmental Matters. Except as set forth in
Schedule 4 attached hereto:
(i) To the best knowledge of the
Borrower, each Negative Pledge Property is free from Hazardous
Materials the presence of which would materially impair the value of
Negative Pledge Property, and the Borrower and the Negative Pledge
Properties are in compliance in all material respects with all
Environmental Laws. The Borrower is not aware that any Hazardous
Materials have ever been stored, treated or disposed of on any Negative
Pledge Property in violation of any Environmental Laws.
(ii) To the best knowledge of the
Borrower, there are no surface impoundments, lagoons, piles, landfills,
injection wells, underground storage areas or other man-made facilities
on any Negative Pledge Property which have accommodated Hazardous
Materials, and neither the Borrower nor, to the best of Borrower's
knowledge, any third party has dumped, discharged, buried or otherwise
placed Hazardous Materials on any Negative Pledge Property including
the soil, surface water and ground water thereof.
(iii) To the best knowledge of the
Borrower, there are no buried, partially buried or above-ground tanks,
storage vessels, drums or containers located on any Negative Pledge
Property in violation of any Environmental Laws. To the best knowledge
of the Borrower, there is no evidence of leachings, spillage or
accidental release of Hazardous Materials onto or into any Negative
Pledge Property.
(iv) All necessary environmental permits
or licenses required of the Borrower related to any Negative Pledge
Property of the improvements thereon have been obtained and are
currently in full force and effect.
(v) The Borrower has not received and is
not aware of any warning notice, notice of violation, administrative
complaint, judicial complaint or other formal or informal notice
alleging that conditions on any Negative Pledge Property are in
violation of any of the Environmental Laws.
(vi) The Borrower has not received, and is
not aware of, and to the best of the Borrower's knowledge, no previous
owner of any Negative Pledge Property has received, any summons,
citation, notice, letter or other communication, written or oral, from
any federal or state environmental agency or other public agency
concerning intentional or unintentional actions or omissions on the
part of the Borrower or any previous owner of any Negative Pledge
Property which resulted or allegedly resulted in the release of
Hazardous Materials onto or into the soil, surface water or ground
water of any Negative Pledge Property.
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(vii) To the best of the Borrower's
knowledge, there has been no treatment, storage, disposal, discharge or
other type of release of Hazardous Materials on land adjacent or near
to any Negative Pledge Property which has contaminated any Negative
Pledge Property or the surface or ground water flowing to any Negative
Pledge Property.
Section 4.2 Survival of Representations and Warranties, etc. All
representations and warranties made under this Agreement shall be deemed to be
made, and shall be true and correct, at and as of the Agreement Date and the
date of each Advance hereunder, except to the extent previously fulfilled in
accordance with the terms hereof and to the extent subsequently inapplicable.
All representations and warranties made under this Agreement shall survive, and
not be waived by, the execution hereof by the Banks and the Administrative
Agent, any investigation or inquiry by any Bank or the Administrative Agent, or
the making of any Advance under this Agreement.
ARTICLE 5 - General Covenants.
So long as any of the Obligations is outstanding and unpaid or the
Borrower shall have the right to borrow hereunder (whether or not the
conditions to borrowing have been or can be fulfilled), and unless the Majority
Banks shall otherwise consent in writing:
Section 5.1 Preservation of Existence and Similar Matters. The
Borrower will and will cause each of its Subsidiaries to:
(a) preserve and maintain its existence, rights,
franchises, licenses and privileges in the state of its incorporation, and each
state wherein the Negative Pledge Property lies or shall lie,
(b) maintain the corporate power and authority to own its
properties and to carry on its business as now being and hereafter proposed to
be conducted, and
(c) qualify and remain qualified, in good standing, and
authorized to do business in each jurisdiction in which the character of its
properties or the nature of its business requires such qualification or
authorization, including without limitation, each jurisdiction wherein the
Negative Pledge Property lies or shall lie.
The Borrower and each of its Subsidiaries shall at all times comply
with all of the provisions of its certificate or articles of incorporation and
bylaws or partnership agreement, as the case may be.
Section 5.2 Business: Compliance with Applicable Law. The
Borrower will and will cause each of its Subsidiaries to (a) engage primarily
in the business of acquiring, managing and selling interests in real property,
and (b) comply with the requirements of Applicable Law, including, without
limitation, Environmental Laws.
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Section 5.3 Maintenance of Properties. The Borrower will and will
cause each of its Subsidiaries to maintain or cause to be maintained in the
ordinary course of business in good repair, working order and condition
(reasonable wear and tear excepted) all of its Property (whether owned or held
under lease), and from time to time make or cause to be made all needed and
appropriate repairs, renewals, replacements, additions, betterments and
improvements thereto. The Borrower will and will cause each of its
Subsidiaries to maintain good, legal and marketable title to, or a valid
leasehold interest in, all of the Negative Pledge Property except to the extent
sold or otherwise disposed of in accordance herewith.
Section 5.4 Accounting Methods and Financial Records. The
Borrower will maintain a system of accounting established and administered in
accordance with generally accepted accounting principles consistently applied,
keep adequate records and books of account in which complete entries will be
made in accordance with such accounting principles consistently applied and
reflecting all transactions required to be reflected by such accounting
principles and keep accurate and complete records of each Borrower's respective
properties and assets. The Borrower shall maintain a fiscal year ending on
December 31.
Section 5.5 Insurance. The Borrower will and will cause each of
its Subsidiaries to maintain the following policies of insurance:
(a) Insurance against loss or damage to all improvements
located on each Negative Pledge Property by fire and any of the risks covered
by insurance of the type now known as "fire and extended coverage," in an
amount not less than the full replacement cost of such improvements, and
including coverage for debris removal (exclusive of the cost of excavations,
foundations, and footings below the lowest basement floor), and with not more
than $10,000 deductible from the loss payable for any casualty other than
windstorms, for which the deductible may change from time to time in accordance
with customary insurance industry adjustments for such a casualty (which policy
of insurance shall contain the "Replacement Cost Endorsement");
(b) If requested by the Administrative Agent, business
interruption insurance and/or loss of "rental value" insurance in such amounts
as are satisfactory to the Administrative Agent;
(c) Comprehensive public liability insurance (including
coverage for elevators and escalators, if any, on each Negative Pledge Property
and completed operations coverage for two years after construction of the
improvements on such Negative Pledge Property has been completed) on an
"occurrence basis" against claims for "personal injury" including, without
limitation, bodily injury, death or property damage occurring on, in or about
each Negative Pledge Property and the adjoining streets, sidewalks and
passageways, such insurance to afford immediate minimum protection to a limit
of not less than that which is reasonable and customary for similar projects
with respect to personal injury or death to any one or more persons or damage
to each Negative Pledge Property;
(d) Boiler and machinery insurance covering pressure
vessels, air tanks, boilers, machinery, pressure piping, heating, air
conditioning, elevator and escalator equipment, provided
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such Negative Pledge Property contains equipment of such nature, and insurance
against loss of occupancy or use arising from breakdown of any of the items
referred to in this subparagraph, in such amounts which are reasonable and
customary for similar projects;
(e) Insurance against loss or damage to personal property
by fire and other risks covered by insurance of the type now known as "fire and
extended coverage"; and
(f) Such other insurance, in such amounts, as may from
time to time be reasonably required by the Administrative Agent against the
same or other hazards.
Section 5.6 Payment of Taxes and Claims. The Borrower will and
will cause each of its Subsidiaries to pay and discharge all taxes, including,
without limitation, withholding taxes, assessments and governmental charges or
levies required to be paid by it or imposed upon it or its income or profits or
upon any Property prior to the date on which penalties attach thereto, and all
lawful claims for labor, materials and supplies which, if unpaid, might become
a Lien or charge upon any of the Negative Pledge Property; except that no such
tax, assessment, charge, levy or claim need be paid which is being diligently
contested in good faith by appropriate proceedings and for which adequate
reserves shall have been set aside on the appropriate books, but only so long
as such tax, assessment, charge, levy or claim does not become a Lien or charge
other than a Permitted Lien and no foreclosure, distraint, sale or similar
proceedings have been commenced. The Borrower will and will cause each of its
Subsidiaries to timely file all returns required by Federal, state or local tax
authorities. The Borrower will maintain adequate charges, accruals and
reserves on its books in respect of taxes.
Section 5.7 Visits and Inspections. The Borrower will permit
representatives of the Administrative Agent and each Bank to (a) visit and
inspect the Negative Pledge Properties or the Borrower's principal place of
business at all reasonable times, (b) inspect and make extracts from and copies
of their respective books and records, and (c) discuss with their respective
principal officers its businesses, assets, liabilities, financial positions,
results of operations, and business prospects.
Section 5.8 Payment of Indebtedness; Loans. Subject to any
provisions herein, referred to herein, or in any other Loan Document regarding
subordination, the Borrower will and will cause each of its Subsidiaries to pay
any and all of its Indebtedness when and as it becomes due, other than amounts
diligently disputed in good faith.
Section 5.9 Use of Proceeds. The Borrower will use the proceeds
of the Loans solely for (a) property acquisitions, (b) rehabilitation of
existing retail centers and (c) general business purposes; provided, however,
that no Loans in excess of twenty percent (20%) of the Commitment may be used
for new property development (whether through joint ventures or
self-developed).
Section 5.10 ERISA. The Borrower shall (a) notify the Banks as
soon as practicable of any Reportable Event and of any additional act or
condition arising in connection with any such Plan which the Borrower believes
might constitute grounds for the termination thereof by the Pension Benefit
Guaranty Corporation or for the appointment by the appropriate United States
District Court
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of a trustee to administer such Plan; and (b) furnish to the Banks, promptly
upon the Banks' request therefor, such additional information concerning any
such Plan as may be reasonably requested by the Banks.
Section 5.11 Indemnity. The Borrower will indemnify and hold
harmless each Bank and the Administrative Agent, and each of their respective
employees, representatives, officers and directors from and against any and all
claims, liabilities, losses, damages, actions, attorneys' fees and demands by
any party, (a) resulting from any breach by the Borrower of any representation
or warranty made hereunder, or (b) arising out of (i) the Commitment or the
making or administration of the Loans, or (ii) allegations of any participation
by the Banks or the Administrative Agent, or any of them, in the affairs of the
Borrower or allegations that the Banks or the Administrative Agent, or any of
them, has any joint liability of the Borrower for any reason whatsoever;
unless, in any case referred to above, the Person seeking indemnification
hereunder is determined in such case to have acted or failed to act with gross
negligence or willful misconduct by a non-appealable judicial order. The
provisions of this Section shall survive the termination of this Agreement.
Section 5.12 Payment of Wages. The Borrower shall and shall cause
each of its Subsidiaries to at all times use its best efforts to comply with
the requirements of the Fair Labor Standards Act, as amended, including,
without limitation, the provisions of such Act relating to the payment of
minimum and overtime wages as the same may become due from time to time.
Section 5.13 Accuracy and Completeness of Information. All
information, reports, prospectuses, notices and other papers and data relating
to the Borrower and furnished by or on behalf of the Borrower, to the Banks or
the Administrative Agent, or any of them, shall be, at the time furnished,
complete and correct in all material respects to the extent necessary to give
the Banks and the Administrative Agent true and accurate knowledge of the
subject matter.
Section 5.14 Compliance with Environmental Laws. The Borrower
shall and shall cause each of its Subsidiaries to at all times comply in all
material respects with all applicable Environmental Laws relating to each
Negative Pledge Property and the Use of the Negative Pledge Property. The
current Use and proposed Use of each Negative Pledge Property and the
improvements thereon do not and will not violate any Environmental Laws, such
that said violation would have a Materially Adverse Effect. The Borrower will
not use or permit any other party to use any Hazardous Materials on any
Negative Pledge Property except such materials as are incidental to the
Borrower's or such party's normal course of business, maintenance and repairs.
The Borrower agrees, upon the reasonable request of the Administrative Agent,
to provide to the Administrative Agent from time to time (at the Borrower's
expense) a current environmental assessment of any Negative Pledge Property
within a reasonable time after such request; provided, however, that unless the
Administrative Agent reasonably believes that a problem exists with respect to
any Hazardous Materials or if a phase I report contains a recommendation for
additional reports, the Borrower shall have no obligation hereunder to provide
more than a phase I report for any Negative Pledge Property more frequently
than once every three (3) years. Such assessment shall be in a form
satisfactory to the Administrative Agent and from an environmental engineer or
consultant satisfactory to the Administrative Agent and addressed to the Banks.
The Borrower also agrees to permit the Administrative Agent, its agents,
contractors, employees and representatives to
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enter upon and inspect each Negative Pledge Property at any reasonable time
upon two (2) days' prior notice for the purpose of conducting environmental
investigations and audits (including taking physical samples). The Borrower
agrees to provide the Administrative Agent, its agents, contractors, employees
and representatives with access to and copies of any and all data and documents
relating to or dealing with any Hazardous Materials used, generated,
manufactured, stored or dispensed of on, under or about any Negative Pledge
Property within five (5) days of the request therefor.
Section 5.15 Indemnity in Regard to Environmental Matters. The
Borrower shall indemnify, defend and hold harmless each Bank, the
Administrative Agent and their respective employees, representatives, officers
and directors from and against any and all claims, demands, suits, losses,
damages, assessments, fines, penalties, costs or other expenses (including
reasonable attorneys' fees and court costs), arising from or in any way related
to actual or threatened damage to the environment, agency costs of
investigation, personal injury or death, or property damage, due to or
resulting from (i) a release or alleged release of Hazardous Materials arising
from the Borrower's or any of its Subsidiary's Use of any Negative Pledge
Property or the improvements thereon; (ii) the existence of Hazardous Materials
at, under, within or on any Negative Pledge Property or the improvements
located thereon; (iii) the violation of any Environmental Laws relating to any
Negative Pledge Property or the Use of any Negative Pledge Property; (iv) any
investigation, inquiry, order, hearing, action or other proceeding by or before
any governmental agency which has resulted or is alleged to have resulted
directly or indirectly from the violation of any Environmental Laws relating to
any Negative Pledge Property or the Use of any Negative Pledge Property; (v)
the breach of any representation or warranty set forth in Section 4.1(z) of
this Agreement or the failure of any such representation or warranty to remain
true and correct; or (vi) any failure by the Borrower to perform any covenant
set forth in Section 5.14 above. The Borrower further agrees that its
indemnity obligations shall include, but are not limited to, liability for
damages resulting from the personal injury or death of an employee of the
Borrower or any of its Subsidiaries, regardless of whether the Borrower or any
of its Subsidiaries has paid the employee under the workers' compensation laws
of any state or other similar federal or state legislation for the protection
of employees. The term "property damage" as used in this Section 5.15
includes, but is not limited to, damage to any real or personal property or
Borrower, any Bank, the Administrative Agent or any third party. The
provisions of this Section 5.15 shall survive the termination of this
Agreement, but shall be applicable only for the period during which the
Borrower or any of its Subsidiaries was an owner or operator of such
properties.
Section 5.16 Further Assurances. The Borrower will promptly cure,
or cause to be cured, defects in the creation and issuance of the Notes and the
execution and delivery of the Loan Documents (including this Agreement),
resulting from any act or failure to act by the Borrower or any employee or
officer thereof. The Borrower at its expense will promptly execute and deliver
to the Administrative Agent and the Banks, or cause to be executed and
delivered to the Administrative Agent and the Banks, all such other and further
documents, agreements, and instruments in compliance with or accomplishment of
the covenants and agreements of the Borrower in the Loan Documents, including
this Agreement, or to correct any omissions in the Loan Documents, or more
fully to state the obligations set out herein or in any of the Loan Documents,
or to obtain any
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consents, all as may be necessary or appropriate in connection therewith as may
be reasonably requested.
Section 5.17 Broker's Claims. The Borrower hereby indemnifies and
agrees to hold the Administrative Agent and each of the Banks harmless from and
against any and all losses, liabilities, damages, costs and expenses which may
be suffered or incurred by the Administrative Agent and each of the Banks in
respect of any claim, suit, action or cause of action now or hereafter asserted
by a broker or any Person acting in a similar capacity arising from or in
connection with the execution and delivery of this Agreement or any other Loan
Document or the consummation of the transactions contemplated herein or therein
and arising out of any act or agreement of the Borrower. The Banks and the
Administrative Agent hereby acknowledge and agree that they have not retained
any broker or any Person acting in a similar capacity in connection with this
Agreement.
Section 5.18 Delivery of Mortgages. Upon the occurrence and during
the continuance of an Event of Default, the Borrower shall and shall cause any
of its Subsidiaries to, at the request of the Administrative Agent, execute and
deliver to the Administrative Agent (for the benefit of the Banks) a mortgage,
security deed, deed of trust or similar instrument for each of the Negative
Pledge Properties and such other instruments and shall take such actions as are
necessary to grant to the Administrative Agent on behalf of the Banks as
security for the obligations a first priority perfected lien on and security
interest in each such Negative Pledge Property and the rents, income and
proceeds associated therewith and execute or deliver such other documents or
information as may be reasonably requested by the Administrative Agent.
Delivery of documents hereunder will not waive or cure any existing Events of
Default under any other provision of this Agreement or any Loan Document.
ARTICLE 6 - Information Covenants.
So long as any of the Obligations is outstanding and unpaid or the
Borrower has a right to borrow hereunder (whether or not the conditions to
borrowing have been or can be fulfilled) and unless the Majority Banks shall
otherwise consent in writing, the Borrower will furnish or cause to be
furnished to each Bank and to the Administrative Agent at their respective
offices:
Section 6.1 Quarterly Operations Statements. Within forty-five
(45) days after the end of the first, second and third quarters in each fiscal
year of the Borrower, and within ninety (90) days after the end of each fiscal
year of the Borrower, (a) a quarterly operations statement with respect to each
of the Negative Pledge Properties, which quarterly operations statement shall
contain the project name and location and cash flow analysis, and (b) quarterly
rent rolls with respect to each of the Negative Pledge Properties (except for
apartment properties). All quarterly operations statements for a period also
shall include a comparison to the budget for such period and shall be certified
by Borrower.
Section 6.2 Quarterly Consolidated Financial Statements and
Information. Within forty-five (45) days after the last day of the first,
second and third quarters in each fiscal year of the Borrower, Borrower's Form
10-Q as filed with the Securities and Exchange Commission which
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shall contain the consolidated balance sheet of the Borrower as at the end of
such quarter, and the related consolidated statement of earnings and related
consolidated statement of shareholders' equity and related consolidated
statement of cash flows of the Borrower for such quarter and for the elapsed
portion of the year ended with the last day of such quarter, which shall be
certified by the chief financial officer of the Borrower, to be, in his or her
opinion, complete and correct in all material respects and to present fairly,
in accordance with generally accepted accounting principles consistently
applied, the financial position of the Borrower, as at the end of such period
and the results of operations for such period, and for the elapsed portion of
the year ended with the last day of such period, subject only to normal
year-end adjustments.
Section 6.3 Annual Consolidated Financial Statements and
Information; Certificate of No Default. Within ninety (90) days after the end
of each fiscal year of the Borrower, Borrower's Form 10-K as filed with the
Securities and Exchange Commission which shall contain the audited consolidated
balance sheets of the Borrower, as at the end of such fiscal year, and the
related audited consolidated statements of earnings and the related audited
consolidated statements of shareholders' equity and the related audited
consolidated statements of cash flows of the Borrower for such fiscal year,
which consolidated financial statements shall set forth in comparative form
such figures as at the end of and for the previous fiscal year, and shall be
accompanied by an opinion of independent certified public accountants of
recognized standing satisfactory to the Administrative Agent and the Banks,
together with a statement of such accountants certifying that during their
examination of the Borrower such accountants have observed no Default or Event
of Default, including, without limitation, any Default under Sections 7.7, 7.8,
7.9, 7.10, 7.11, 7.12, 7.13 and 7.14 hereof.
Section 6.4 Performance Certificates. At the time the
consolidated financial statements are furnished pursuant to Sections 6.2 and
6.3, a certificate of an Authorized Signatory of the Borrower in form and
substance satisfactory to the Majority Banks:
(a) Setting forth as at the end of such quarter or
calendar year, as the case may be, the arithmetical calculations required to
establish whether or not the Borrower was in compliance with the requirements
of Sections 7.7, 7.8, 7.9, 7.10, 7.11, 7.12, 7.13 and 7.14 hereof; and
(b) Stating that, to the best of his or her knowledge, no
Default or Event of Default has occurred as at the end of such quarter or year,
as the case may be, or, if a Default or an Event of Default has occurred,
disclosing each such Default or Event of Default and its nature, when it
occurred, whether it is continuing, and the steps being taken by the Borrower
with respect to such Default or Event of Default.
Section 6.5 Copies of Other Reports.
(a) Promptly upon receipt thereof, copies of all reports,
if any, submitted to the Borrower by its independent public accountants
regarding the Borrower, including, without limitation, any management report
prepared in connection with the annual audit referred to in Section 6.3 hereof.
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(b) Promptly after the preparation of the same, copies of
all material reports or financial information filed with any governmental
agency, department, bureau, division or other governmental authority or
regulatory body (including, without limitation, the Securities and Exchange
Commission) or evidencing facts or containing information which could have a
Materially Adverse Effect.
(c) From time to time and promptly upon each request, such
data, certificates, reports, statements, documents, or further information
regarding the business, assets, liabilities, financial position, projections,
results of operations of the Borrower or any of its Subsidiaries as the
Administrative Agent, upon request of the Majority Banks, may reasonably
request.
(d) Notice of any change in the Senior Management of the
Borrower.
(e) Promptly after the same shall be submitted to the
board of directors of the Borrower, copies of Directors' Books annually
prepared by the Borrower.
Section 6.6 Notice of Litigation and Other Matters. Prompt notice
of the following events as to which the Borrower has received notice or
otherwise become aware thereof:
(a) The commencement of all material proceedings and
investigations by or before any governmental body and all actions and
proceedings in any court or before any arbitrator against or, to the extent
known to the Borrower, in any other way relating adversely and directly to the
Borrower, its Subsidiaries, or any of their respective properties, assets, or
businesses which, if determined adversely to the Borrower or such Subsidiary is
reasonably likely to result in an Event of Default or have a Materially Adverse
Effect on the Borrower, or which calls into question the validity of this
Agreement or any other Loan Document;
(b) Any material adverse change with respect to the
business, assets, liabilities, financial position, or results of operations of
the Borrower, other than changes in the ordinary course of business which have
not had and are not likely to have a Materially Adverse Effect;
(c) Any Default or default by the Borrower or any of its
Subsidiaries under any agreement (other than this Agreement) to which the
Borrower or any of its Subsidiaries is party or by which any of their
respective properties is bound which is likely to have a Materially Adverse
Effect or the occurrence of any other event which could have a Materially
Adverse Effect, giving in each case the details thereof and specifying the
action proposed to be taken with respect thereto; and
(d) The occurrence of any Reportable Event or a
"prohibited transaction" (as such term is defined in Section 406 of ERISA or
Section 4975 of the Code) with respect to any Plan of the Borrower or any of
its ERISA Affiliates or the institution or threatened institution by the
Pension Benefit Guaranty Corporation of proceedings under ERISA to terminate or
to partially terminate any such Plan or the commencement or threatened
commencement of any litigation regarding any such Plan or naming it or the
Trustee of any such Plan with respect to such Plan.
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(e) The occurrence of any event subsequent to the
Agreement Date which, if such event had occurred prior to the Agreement Date,
would have constituted an exception to the representation and warranty in
Section 4.1(n) of this Agreement.
Section 6.7 Matters Affecting the Negative Pledge Property.
(i) All leases (and amendments thereto), easements, liens and
contracts of sale (whether or not recorded of public record) hereafter
entered into affecting the Negative Pledge Property as requested by the
Bank.
(ii) With respect to any apartment property now or hereafter
constituting the Negative Pledge Property, Borrower shall provide a
yearly schedule of lease terms which shall include the tenant's name(s)
and the expiration date of all leases.
Section 6.8 Notices from the Borrower Regarding Environmental
Matters. The Borrower shall promptly, after obtaining knowledge thereof,
advise the Bank in writing of (i) any and all enforcement, cleanup, remedial,
removal or other governmental or regulatory actions instituted or threatened,
orally or in writing, pursuant to any of the Environmental Laws affecting the
Negative Pledge Property or any obligation of the Borrower hereunder including,
without limitation, any notice of inspection, potential liability under CERCLA,
abatement or noncompliance; (ii) all claims made or threatened in writing by
any third party against the Borrower, affecting the Negative Pledge Property
for damages, contribution, cost recovery compensation, loss or injury resulting
from any Hazardous Materials or asserting or alleging a violation of or
liability under any of the Environmental Laws or under any common law theory of
liability involving environmental or health safety matters; (iii) the
Borrower's discovery of any occurrence or condition on the Negative Pledge
Property or any real property adjoining or in the vicinity of the Negative
Pledge Property which could subject Borrower or the Negative Pledge Property to
a claim under any of the Environmental Laws; (iv) any restrictions imposed or
threatened on ownership, occupancy, transferability or Use of the Negative
Pledge Property under any of the Environmental Laws; or (v) any remedial action
taken by the Borrower with respect to any Hazardous Materials affecting the
Negative Pledge Property. The Borrower shall deliver to the Administrative
Agent any documentation or records in connection with any of the foregoing
matters which the Administrative Agent may reasonably request and which are
susceptible of being obtained by the Borrower without undue cost or expense.
ARTICLE 7 - Negative Covenants.
So long as any of the Obligations is outstanding and unpaid or the
Borrower has a right to borrow hereunder (whether or not the conditions to
borrowing have been or can be fulfilled) and unless the Majority Banks shall
otherwise give their prior consent in writing:
Section 7.1 Indebtedness of the Borrower. The Borrower shall not
create, assume, incur or otherwise become or remain obligated in respect of, or
permit to be outstanding, and the Borrower shall not permit any of its
Subsidiaries to create, assume, incur or otherwise become or remain, obligated
in respect of, or permit to be outstanding, any Indebtedness except:
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(a) Indebtedness under this Agreement, the Notes and the
other Loan Documents;
(b) Trade accounts payable, accrued expenses, customer
advance payments, contractual obligations to suppliers, customers, tenants and
contractors incurred in the ordinary course of business, and other current
liabilities (other than Indebtedness for Money Borrowed) incurred in the
ordinary course of business;
(c) Indebtedness secured by Permitted Liens;
(d) Indebtedness existing as of the Agreement Date as
described on Schedule 3 attached hereto;
(e) Indebtedness renewing, extending or refinancing on a
Nonrecourse basis of any Indebtedness permitted hereunder, if the original
principal amount of the Indebtedness is not increased;
(f) Indebtedness permitted under Sections 7.2 and 7.6
hereof;
(g) other property-specific long-term (having a term of
more than 5 years) Indebtedness on a Nonrecourse basis; and
(h) any other Indebtedness on terms and conditions
satisfactory to the Administrative Agent with prior written consent of the
Majority Banks.
Section 7.2 Investments. The Borrower shall not make any loan,
advance, or otherwise acquire evidences of Indebtedness, capital stock or other
securities of any Person, and shall not permit any Subsidiary to make any loan,
advance, or otherwise require evidences of Indebtedness or capital stock or
other securities of any Person, except that the Borrower may (a) make
investments in and loans and advances to or otherwise acquire Indebtedness of
Persons acceptable to the Majority Banks, (b) purchase or otherwise acquire or
own Indebtedness for Money Borrowed secured by real property having a value
equal to or greater than the purchase price of such Indebtedness on the
acquisition date, (c) make investments in money market mutual funds, (d)
purchase marketable, direct obligations of the United States of America, its
agencies and instrumentalities maturing within 365 days of the date of
purchase, and (c) purchase commercial paper issued by corporations, each of
which shall have a combined net worth of at least $100 million and each of
which conducts a substantial part of its business in the United States of
America, maturing within 270 days from the date of the original issue thereof
and rated "A-2" or better by S&P.
Section 7.3 Limitation on Liens. The Borrower shall not create,
assume, incur or permit to exist or to be created, assumed, incurred or
permitted to exist, and shall not permit any of its Subsidiaries to create,
assume, incur or permit to exist or to be created, assumed or permitted to
exist, directly or indirectly, any Lien on any of its properties or assets,
whether now owned or hereafter acquired, except for Permitted Liens, and shall
not covenant or agree and shall not permit any of its Subsidiaries to covenant
and agree, with any third party that it will not create, assume,
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incur or permit to exist or to be created, assumed, incurred or permitted to
exist any Lien on any of the Negative Pledge Property.
Section 7.4 Amendment and Waiver. The Borrower shall not and
shall not permit any of its Subsidiaries to, without the prior written consent
of the Majority Banks, enter into any material amendment of, or agree to or
accept any material waiver of its by-laws or articles of incorporation, which
would adversely affect the rights of the Administrative Agent and the Banks
under this Agreement or any other Loan Document.
Section 7.5 Liquidation; Disposition or Acquisition of Assets.
The Borrower shall not and shall not permit any of its Subsidiaries to (i)
liquidate or dissolve itself (or suffer any liquidation or dissolution,
including, without limitation, the announcement or adoption of any plan of
dissolution) or otherwise wind up, or (ii) enter into any merger or
consolidation unless such dissolution, merger or consolidation is contingent
upon cancellation of the Commitment and payment in full of the Obligations.
Section 7.6 Limitation on Guaranties. The Borrower shall not and
shall not permit any of its Subsidiaries to at any time guaranty, or assume, be
obligated with respect to, or permit to be outstanding any Guaranty of, any
obligation of any other Person in excess of $100,000 in the aggregate
outstanding at any time without the prior written consent of the Majority
Banks.
Section 7.7 Dividends. Except as hereinafter provided, in no
event shall the Borrower pay or declare any dividend in respect to any of its
capital stock in excess of an amount which is equal to ninety-five percent
(95%) of its Funds From Operations. The foregoing shall not be deemed to
prohibit the Borrower from paying a special dividend which the Board of
Directors shall determine to be necessary in order for the Borrower to avoid
liability for federal income taxes on account of gain from the sale of
properties.
Section 7.8 Borrower Net Worth. The Borrower will at all times
maintain a Net Worth equal to or greater than the greater of (a) Two Hundred
Million Dollars ($200,000,000) or (b) the sum of (i) $200,000,000 plus (ii)
fifty percent (50%) of the Net Proceeds of each public or private offering of
the common stock of the Borrower subsequent to the Agreement Date.
Section 7.9 Indebtedness Ratio. The Borrower will at all times
maintain a ratio of Indebtedness for Money Borrowed to Net Worth of not greater
than 1.50 to 1.
Section 7.10 Interest Coverage. The Borrower will at all times
maintain a ratio of EBITDA to Interest on Indebtedness for Money Borrowed of no
less than 2.00 to 1.
Section 7.11 Collateral Value. The Borrower will not at any time
permit the outstanding Loans to exceed sixty-five percent (65%) of the Value of
Negative Pledge Property.
Section 7.12 Total Liabilities to Total Assets Ratio. The Borrower
shall not permit at any time Total Liabilities to exceed sixty percent (60%) of
Total Assets.
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Section 7.13 Net Income. The Borrower shall not (a) have a net
operating loss (before deduction for any real estate valuation loss or reserve)
for any fiscal quarter which is equal to or greater than $1,000,000, (b) have a
net operating loss for any two (2) consecutive fiscal quarters or (c) have a
net operating loss for any fiscal year.
Section 7.14 Debt Service Coverage Ratio. The Borrower shall for
each fiscal year maintain a Debt Service Coverage Ratio of not less than 1.25
to 1.
Section 7.15 Value of Unencumbered Real Estate Assets. The Value
of Unencumbered Real Estate Assets shall not, at any time, be less than one
hundred fifty percent (150%) of all Unsecured Senior Debt.
Section 7.16 Affiliate Transactions. Except for agreements which
are direct cost or direct revenue pass through in nature, the Borrower shall
not, and shall not permit any of its Subsidiaries to, at any time engage in any
transaction with an Affiliate, nor make an assignment or other transfer of any
of its assets to any Affiliate, on terms less advantageous than would be the
case if such transaction had been effected with a non-Affiliate.
Section 7.17 ERISA Liabilities. The Borrower shall not, and shall
not permit any ERISA Affiliate to, fail to meet all of the applicable minimum
funding requirements of ERISA and the Code, without regard to any waivers
thereof, and, to the extent that the assets of any of its Plans would be less
than an amount sufficient to provide all accrued benefits payable under such
Plans, shall make the maximum deductible contributions allowable under the
Code. The Borrower shall not, and shall not permit any ERISA Affiliate to,
become a participant in any Multiemployer Plan.
ARTICLE 8 - Default.
Section 8.1 Events of Default. Each of the following shall
constitute an Event of Default, whatever the reason for such event and whether
it shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment or order of any court or any order, rule, or
regulation of any governmental or non-governmental body:
(a) Any representation or warranty made under this
Agreement shall prove incorrect or misleading in any material respect when made
or deemed to have been made;
(b) The Borrower shall default in the payment of any
principal, interest or fees payable hereunder or under the Notes, or any of
them, or under the other Loan Documents and such default shall continue for a
period of ten (10) days;
(c) The Borrower or any of its Subsidiaries shall default
in the performance or observance of any agreement or covenant contained in
Article 6 or Article 7 hereof and the Borrower shall have knowledge thereof or
shall have received notice from the Administrative Agent with respect thereto,
and, with respect to Sections 7.2, 7.4, 7.11 or 7.16 only, thirty (30) days
have elapsed from the date of such notice;
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(d) The Borrower or any of its Subsidiaries shall default
in the performance or observance of any other agreement or covenant contained
in this Agreement not specifically referred to elsewhere in this Section 8.1,
and such Default shall not be cured to the Majority Banks' satisfaction within
a period of thirty (30) days from the date the Borrower becomes aware of the
occurrence of such default;
(e) There shall occur any Default in the performance or
observance of any agreement or covenant or breach of any representation or
warranty contained in any of the Loan Documents (other than this Agreement or
as otherwise provided in Section 8.1 of this Agreement), which shall not be
cured to the Majority Banks' satisfaction within the applicable cure period, if
any, provided for in such Loan Document or thirty (30) days from the date the
Borrower becomes aware of the breach or Default if no cure period is provided
in such Loan Document;
(f) Any Person (together with Affiliates of such Person)
shall have, directly or indirectly, a beneficial ownership of more than twenty
percent (20%) of the voting equity interests or voting securities or the power
to direct or cause the direction of the management and policies of the
Borrower;
(g) There shall be entered a decree or order for relief in
respect of the Borrower or any of its Subsidiaries, under Title 11 of the
United States Code, as now constituted or hereafter amended, or any other
applicable federal or state bankruptcy law or other similar law, or appointing
a receiver, liquidator, assignee, trustee, custodian, sequestrator, or similar
official of the Borrower or any of its Subsidiaries, or of any substantial part
of its properties, or ordering the winding-up or liquidation of the affairs of
the Borrower or any of its Subsidiaries, or an involuntary petition shall be
filed against the Borrower or any of its Subsidiaries and a temporary stay
entered, and (i) such petition and stay shall not be diligently contested, or
(ii) any such petition and stay shall continue undismissed for a period of
thirty (30) consecutive days;
(h) The Borrower or any of its Subsidiaries shall file a
petition, answer, or consent seeking relief under Title 11 of the United States
Code, as now constituted or hereafter amended, or any other applicable federal
or state bankruptcy law or other similar law, or the Borrower or any of its
Subsidiaries shall consent to the institution of proceedings thereunder or to
the filing of any such petition or to the appointment or taking of possession
of a receiver, liquidator, assignee, trustee, custodian, sequestrator, or other
similar official of the Borrower or any of its Subsidiaries, or of any
substantial part of their respective properties, or the Borrower or any of its
Subsidiaries shall fail generally to pay their respective debts as they become
due, or the Borrower or any of its Subsidiaries shall take any corporate or
partnership action to authorize any such action;
(i) A final judgment (the payment of which is not covered
by insurance) shall be entered by any court against any of the Borrower and its
Affiliates for the payment of money which exceeds $100,000, or a warrant of
attachment or execution or similar process shall be issued or levied against
property of any of the Borrower and its Affiliates which, together with all
other such property of any of the Borrower and its Affiliates subject to other
such process, exceeds in value $100,000 in the aggregate, and if, within thirty
(30) days after the entry, issue or levy thereof, such judgment, warrant or
process shall not have been paid or discharged or stayed pending appeal, or if,
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after the expiration of any such stay, such judgment, warrant or process shall
not have been paid or discharged;
(j) There shall be at any time any "accumulated funding
deficiency," as defined in ERISA or in Section 412 of the Code, with respect to
any Plan maintained by any of the Borrower and its Affiliates, or to which the
Borrower or any of its Affiliates has any liabilities, or any trust created
thereunder; or a trustee shall be appointed by a United States District Court
to administer any such Plan; or the Pension Benefit Guaranty Corporation shall
institute proceedings to terminate any such Plan; or any of the Borrower and
its Affiliates shall incur any liability to the Pension Benefit Guaranty
Corporation in connection with the termination of any such Plan; or any Plan or
trust created under any Plan of any of the Borrower and its Affiliates shall
engage in a non-exempt "prohibited transaction" (as such term is defined in
Section 406 of ERISA or Section 4975 of the Code) which would subject any such
Plan, any trust created thereunder, any trustee or administrator thereof, or
any party dealing with any such Plan or trust to the tax or penalty on
"prohibited transactions" imposed by Section 502 of ERISA or Section 4975 of
the Code; or any of the Borrower and its Affiliates shall enter into or become
obligated to contribute to a Multiemployer Plan;
(k) There shall occur any default under any indenture,
agreement or instrument (i) evidencing Indebtedness of the Borrower or any of
its Affiliates (other than Indebtedness which is Nonrecourse and as to which no
personal liability has been asserted against the Borrower or such Affiliate) in
an aggregate principal amount exceeding $5,000,000 which default shall remain
uncured for a period of thirty (30) days or (ii) between the Borrower or any of
its Affiliates and any Bank;
(l) Any violation of applicable environmental law shall
occur with respect to the properties of any of the Borrower and its Affiliates,
which has a reasonable expectation of having a Materially Adverse Effect;
(m) Any material violation of applicable environmental law
shall occur with respect to any parcel constituting the Negative Pledge
Property; or
(n) All or any portion of any Loan Document shall at any
time and for any reason be declared by a court of competent jurisdiction in a
suit with respect to such Loan Document to be null and void, or a proceeding
shall be commenced by any Governmental Authority having jurisdiction over the
Borrower involving a legitimate dispute or by the Borrower seeking to establish
the invalidity or unenforceability thereof (exclusive of questions of
interpretation of any provision thereof), or the Borrower shall deny that it
has any liability or obligation for the payment of principal or interest
purported to be created under any Loan Document;
(o) The Borrower shall at any time cease to be qualified
as a REIT for any purpose under the Code;
(p) The Borrower shall fail to maintain Senior Management
as in effect on the Agreement Date, or such other Persons as Senior Management
as have equivalent character,
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experience and knowledge of the business of the Borrower as may be reasonably
acceptable to the Administrative Agent and the Majority Banks.
(q) There shall occur any event which has a Materially
Adverse Effect.
Section 8.2 Remedies. If an Event of Default shall have occurred
and shall be continuing:
(a) With the exception of an Event of Default, specified
in Sections 8.1(g) or (h), the Administrative Agent shall at the request, or
may with the consent, of the Majority Banks, by notice to the Borrower (i)
declare the Notes, all interest thereon and all other amounts payable under
this Agreement and the other Loan Documents to be forthwith due and payable,
whereupon the Notes, all such interest and all such amounts shall become and be
forthwith due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by the Borrower
and/or (ii) terminate the Commitment.
(b) Upon the occurrence of an Event of Default under
Sections 8.1(g) and (h) hereof, the Commitment shall automatically terminate
and such principal, interest (including without limitation, interest which
would have accrued but for the commencement of a case or proceeding under the
federal bankruptcy laws) and other amounts payable under this Agreement or the
Notes shall thereupon and concurrently therewith become due and payable, all
without any action by the Administrative Agent, or the Banks or the holders of
the Notes, and all without presentment, demand, protest or other notice of any
kind, all of which are expressly waived, anything in this Agreement or in the
Notes to the contrary notwithstanding.
(c) The Administrative Agent, with the concurrence of the
Majority Banks, shall exercise all of the post-default rights granted to it and
to them under the Loan Documents or under Applicable Law.
(d) The rights and remedies of the Administrative Agent,
the Issuing Banks and the Banks hereunder shall be cumulative, and not
exclusive.
ARTICLE 9 - The Administrative Agent.
Section 9.1 Appointment and Authorization. Each Bank hereby
irrevocably appoints and authorizes, and hereby agrees that it will require any
transferee of any of its interest in its Loans and in its Notes irrevocably to
appoint and authorize, the Administrative Agent to take such actions as its
agent on its behalf and to exercise such powers hereunder as are delegated by
the terms hereof, together with such powers as are reasonably incidental
thereto. Neither the Administrative Agent nor any of its directors, officers,
employees, or agents shall be liable to any Bank (or any transferee thereof)
for any action taken or omitted to be taken by it or them hereunder or in
connection herewith, except for its or their own gross negligence or willful
misconduct.
Section 9.2 Delegation of Duties. The Administrative Agent may
execute any of its duties under the Loan Documents by or through agents or
attorneys selected by it using reasonable care and shall be entitled to advice
of counsel concerning all matters pertaining to such duties. The
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Administrative Agent shall not be responsible to any Bank for the negligence or
misconduct of any agents or attorneys selected by it with reasonable care.
Section 9.3 Interest Holders. The Administrative Agent may treat
each Bank, or the Person designated in the last notice filed with the
Administrative Agent under this Section 9.3, as the holder of all of the
interests of such Bank in its Loans and in its Notes until written notice of
transfer, signed by such Bank (or the Person designated in the last notice
filed with the Administrative Agent) and by the Person designated in such
written notice of transfer, in form and substance satisfactory to the
Administrative Agent, shall have been filed with the Administrative Agent.
Section 9.4 Consultation with Counsel. The Administrative Agent
may consult with legal counsel selected by it and shall not be liable to any
Bank (or transferee thereof) for any action taken or suffered by it in good
faith in reliance thereon.
Section 9.5 Documents. The Administrative Agent shall be under no
duty to examine, inquire into, or pass upon the validity, effectiveness, or
genuineness of this Agreement, any Note, or any instrument, document, or
communication furnished pursuant hereto or in connection herewith, and the
Administrative Agent shall be entitled to assume that they are valid,
effective, and genuine, have been signed or sent by the proper parties, and are
what they purport to be.
Section 9.6 Administrative Agent and Affiliates. The
Administrative Agent and its affiliates may accept deposits from, lend money
to, and generally engage in any kind of business with the Borrower or any
Affiliates of, or Persons doing business with, the Borrower, as if it were not
affiliated with the Administrative Agent and without any obligation to account
to any Bank (or any transferee thereof) therefor.
Section 9.7 Responsibility of the Administrative Agent. The
duties and obligations of the Administrative Agent under this Agreement are
only those expressly set forth in this Agreement. The Administrative Agent
shall be entitled to assume that no Default or Event of Default has occurred
and is continuing unless it has actual knowledge, or has been notified by the
Borrower, of such fact, or has been notified by a Bank that such Bank considers
that a Default or an Event of Default has occurred and is continuing, and such
Bank shall specify in detail the nature thereof in writing. The Administrative
Agent shall not be liable hereunder to any Bank (or any transferee thereof) for
any action taken or omitted to be taken except for its own gross negligence or
willful misconduct, and agrees that with respect to any actions which are taken
by (or not taken by) the Administrative Agent solely in its capacity as
Administrative Agent in its sole discretion, that the Administrative Agent will
act with the same standard of care that it applies to similar loans held for
its own account. The Administrative Agent shall provide each Bank with copies
of such documents received from the Borrower as such Bank may reasonably
request.
Section 9.8 Action by Administrative Agent.
(a) Except for action requiring the approval of the
Majority Banks (or the Banks, as applicable), the Administrative Agent shall be
entitled to use its discretion with respect to
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exercising or refraining from exercising any rights which may be vested in it
by, and with respect to taking or refraining from taking any action or actions
which it may be able to take under or in respect of, this Agreement, unless the
Administrative Agent shall have been instructed by the Majority Banks (or
Banks, as applicable) to exercise or refrain from exercising such rights or to
take or refrain from taking such action, provided that the Administrative Agent
shall not exercise any rights under Section 8.2(a) of this Agreement without
the request of the Majority Banks (or Banks, as applicable). The
Administrative Agent shall incur no liability to any Bank (or any transferee
thereof) under or in respect of this Agreement with respect to anything which
it may do or refrain from doing in the reasonable exercise of its judgment or
which may seem to it to be necessary or desirable in the circumstances, except
for its gross negligence or willful misconduct.
(b) The Administrative Agent shall not be liable to the
Banks or to any Bank in acting or refraining from acting under this Agreement
in accordance with the instructions of the Majority Banks (or all Banks, as
applicable), and any action taken or failure to act pursuant to such
instructions shall be binding on all Banks.
Section 9.9 Notice of Default or Event of Default. In the event
that the Administrative Agent or any Bank shall acquire actual knowledge, or
shall have been notified in writing, of any Default or Event of Default, the
Administrative Agent or such Bank shall promptly notify the Banks and the
Administrative Agent, and the Administrative Agent shall take such action and
assert such rights under this Agreement as the Majority Banks (or all Banks, as
applicable) shall request in writing, and the Administrative Agent shall not be
subject to any liability by reason of its acting pursuant to any such request.
If the Majority Banks (or all Banks, as applicable) shall fail to request the
Administrative Agent to take action or to assert rights under this Agreement in
respect of any Default or Event of Default within ten (10) days (or shorter
period as set forth in such notice) after their receipt of the notice of any
Default or Event of Default from the Administrative Agent, or shall request
inconsistent action with respect to such Default or Event of Default, the
Administrative Agent may, but shall not be required to, take such action and
assert such rights (other than rights under Article 8 hereof) as it deems in
its discretion to be advisable for the protection of the Banks, except that, if
the Majority Banks (or all Banks, as applicable) have instructed the
Administrative Agent not to take such action or assert such right, in no event
shall the Administrative Agent act contrary to such instructions.
Section 9.10 Responsibility Disclaimed. The Administrative Agent
shall be under no liability or responsibility whatsoever as Administrative
Agent:
(a) To the Borrower or any other Person or entity as a
consequence of any failure or delay in performance by or any breach by, any
Bank or Banks of any of its or their obligations under this Agreement;
(b) To any Bank or Banks, as a consequence of any failure
or delay in performance by, or any breach by, the Borrower or any other obligor
of any of its obligations under this Agreement or the Notes or any other Loan
Document; or
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(c) To any Bank or Banks for any statements,
representations, or warranties in this Agreement, or any other document
contemplated by this Agreement or any information provided pursuant to this
Agreement, any other Loan Document, or any other document contemplated by this
Agreement, or for the validity, effectiveness, enforceability, or sufficiency
of this Agreement, the Notes, any other Loan Document, or any other document
contemplated by this Agreement.
Section 9.11 Indemnification. The Banks agree to indemnify the
Administrative Agent (to the extent not reimbursed by the Borrower) pro rata
according to their respective Commitment Ratios, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses (including fees and expenses of experts, agents,
consultants, and counsel), or disbursements of any kind or nature whatsoever
which may be imposed on, incurred by, or asserted against the Administrative
Agent in any way relating to or arising out of this Agreement, any other Loan
Document, or any other document contemplated by this Agreement or any action
taken or omitted by the Administrative Agent under this Agreement, any other
Loan Document, or any other document contemplated by this Agreement, except
that no Bank shall be liable to the Administrative Agent for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses, or disbursements resulting from the gross negligence or
willful misconduct of the Administrative Agent. The provisions of this Section
9.11 shall survive the termination of this Agreement.
Section 9.12 Credit Decision. Each Bank represents and warrants to
each other and to the Administrative Agent that:
(a) In making its decision to enter into this Agreement
and to make Advances it has independently taken whatever steps it considers
necessary to evaluate the financial condition and affairs of the Borrower and
that it has made an independent credit judgment, and that it has not relied
upon information provided by the Administrative Agent; and
(b) So long as any portion of the Loans remains
outstanding, it will continue to make its own independent evaluation of the
financial condition and affairs of the Borrower.
Section 9.13 Successor Administrative Agent. Subject to the
appointment and acceptance of a successor Administrative Agent (which shall be
any Bank or a commercial bank organized under the laws of the United States of
America or any political subdivision thereof which has a combined capital and
reserves in excess of $250,000,000) as provided below, the Administrative Agent
may resign at any time by giving written notice thereof to the Banks and the
Borrower and may be removed at any time for cause by the Majority Banks. Upon
any such resignation or removal, the Majority Banks shall have the right to
appoint a successor Administrative Agent. If no successor Administrative Agent
shall have been so appointed by the Majority Banks, and shall have accepted
such appointment within thirty (30) days after the retiring Administrative
Agent's giving of notice of resignation or the Majority Banks' removal of the
retiring Administrative Agent, then the retiring Administrative Agent may, on
behalf of the Banks, appoint a successor Administrative Agent which shall be
any Bank or a commercial bank organized under the laws of the United States of
America or any political subdivision thereof which has combined capital and
reserves in excess of $250,000,000. Upon the acceptance of any appointment as
Administrative Agent hereunder by a
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successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges,
duties, and obligations of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. After any retiring Administrative Agent's resignation or removal
hereunder as Administrative Agent, the provisions of this Section 9.13 shall
continue in effect for its benefit in respect of any actions taken or omitted
to be taken by it while it was acting as the Administrative Agent.
ARTICLE 10 - Change in Circumstances Affecting LIBOR Advances.
Section 10.1 LIBOR Basis Determination Inadequate or Unfair.
Notwithstanding anything contained herein which may be construed to the
contrary, if with respect to any proposed LIBOR Advance for any Interest
Period, the Administrative Agent determines after consultation with the Banks
that deposits in dollars (in the applicable amount) are not being offered to
each of the Banks in the relevant market for such Interest Period, the
Administrative Agent shall forthwith give notice thereof to the Borrower and
the Banks, whereupon until the Administrative Agent notifies the Borrower that
the circumstances giving rise to such situation no longer exist, the
obligations of the Banks to make such type of LIBOR Advances shall be
suspended.
Section 10.2 Illegality. If any applicable law, rule or
regulation, or any change therein, or any interpretation or change in
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Bank with any request or directive (whether or
not having the force of law) of any such authority, central bank or comparable
agency, shall make it unlawful or impossible for any Bank to make, maintain or
fund its LIBOR Advances, such Bank shall so notify the Administrative Agent,
and the Administrative Agent shall forthwith notify the Borrower and the other
Banks. Before giving any notice to the Administrative Agent pursuant to this
Section, such Bank shall designate a different lending office if such
designation will avoid the need for giving such notice and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank. Upon receipt
of such notice, notwithstanding anything contained in Article 2 hereof, the
Borrower shall repay in full the then outstanding principal amount of each
affected LIBOR Advance of such Bank, together with accrued interest thereon,
either (a) on the last day of the then current Interest Period applicable to
such LIBOR Advance if such Bank may lawfully continue to maintain and fund such
LIBOR Advance to such day or (b) immediately if such Bank may not lawfully
continue to fund and maintain such LIBOR Advance to such day. Concurrently
with repaying each affected LIBOR Advance of such Bank, notwithstanding
anything contained in Article 2 hereof, the Borrower shall borrow a Prime Rate
Advance from such Bank, and such Bank shall make such Advance in an amount such
that the outstanding principal amount of the Note shall equal the outstanding
principal amount of the Note immediately prior to such repayment.
Section 10.3 Increased Costs.
(a) If any applicable law, rule or regulation, or any
change therein, or any interpretation or change in interpretation or
administration thereof by any governmental authority,
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central bank or comparable agency charged with the interpretation or
administration thereof or compliance by any Bank with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency shall subject any Bank to any tax, duty or other charge with
respect to its obligation to make LIBOR Advances, or shall change the basis of
taxation of payments to any Bank of the principal of or interest on its LIBOR
Advances or in respect of any other amounts due under this Agreement, in
respect of its LIBOR Advances or its obligation to make LIBOR Advances (except
for changes in the rate of tax on the overall net income of such Bank) imposed
by the jurisdiction in which such Bank's principal executive office is located
and the result of any of the foregoing is to increase the cost to such Bank of
making or maintaining any such LIBOR Advances, or to reduce the amount of any
sum received or receivable by such Bank under this Agreement or under the Note
with respect thereto, then, on the earlier of a date within ten (10) days after
demand by such Bank or the Maturity Date, the Borrower agrees to pay to such
Bank such additional amount or amounts as will compensate such Bank for such
increased costs. Each Bank will promptly notify the Borrower of any event of
which it has knowledge, occurring after the date hereof, which will entitle
such Bank to compensation pursuant to this Section 10.3 and will designate a
different lending office if such designation will avoid the need for, or reduce
the amount of, such compensation and will not, in the sole judgment of such
Bank, be otherwise disadvantageous to such Bank.
(b) A certificate of any Bank claiming compensation under
this Section 10.3 and setting forth the additional amount or amounts to be paid
to it hereunder and calculations therefor shall be conclusive in the absence of
manifest error. In determining such amount, such Bank may use any reasonable
averaging and attribution methods. If any Bank demands compensation under this
Section 10.3, the Borrower may at any time, upon at least five (5) Business
Days' prior notice to such Bank, prepay in full the then outstanding affected
LIBOR Advances of such Bank, together with accrued interest thereon to the date
of prepayment. Concurrently with prepaying such LIBOR Advances the Borrower
shall borrow a Prime Rate Advance, or a LIBOR Advance not so affected, from
such Bank, and such Bank shall make such Advance in an amount such that the
outstanding principal amount of the Note shall equal the outstanding principal
amount of the Note immediately prior to such prepayment.
Section 10.4 Effect On Other Advances. If notice has been given
pursuant to Section 10.1, 10.2 or 10.3 suspending the obligation of any Bank to
make any LIBOR Advance, or requiring LIBOR Advances to be repaid or prepaid,
then, unless and until such Bank notifies the Borrower that the circumstances
giving rise to such repayment no longer apply, all LIBOR Advances which would
otherwise be made by such Bank shall, at the option of the Borrower, be made
instead as Prime Rate Advances.
Section 10.5 Claims for Increased Costs and Taxes. In the event
that any Bank shall decline to make LIBOR Advances pursuant to Section 10.1 or
10.2 hereof or shall have notified the Borrower that it is entitled to claim
compensation pursuant to Sections 2.9(d), 2.12 or 10.3 hereof (each such Bank
being an "Affected Bank"), the Borrower may designate a replacement bank (a
"Replacement Bank"), which Replacement Bank shall be reasonably acceptable to
the Administrative Agent, to assume the Commitment and the obligations of any
such Affected Bank hereunder, and to purchase the outstanding Note of such
Affected Bank and such Affected Bank's rights hereunder and
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with respect thereto, without recourse upon, or warranty by, or expense to,
such Affected Bank, for a purchase price equal to the outstanding principal
amount of the Loans of such Affected Bank plus all interest accrued and unpaid
thereon and all other amounts owing to such Affected Bank hereunder, including
without limitation, any amount which would be payable to such Affected Bank
pursuant to Section 2.10, and upon such assumption and purchase by the
Replacement Bank, such Replacement Bank shall be deemed to be a "Bank" for
purposes of this Agreement and such Affected Bank shall cease to be a "Bank"
for purposes of this Agreement and shall no longer have any obligations or
rights hereunder (other than any obligations or rights which according to this
Agreement shall survive the termination of this Agreement). The Borrower
hereby covenants and agrees that upon the effectiveness of any assignment
hereunder, it will promptly provide to the Administrative Agent for the benefit
of the relevant Banks duly executed replacement promissory notes in the amount
of each Bank's Commitment in substantially the form of Exhibit A attached
hereto. The Borrower shall, on the effective date of such assignment, pay to
the Administrative Agent the assignment fee referred to in Section
11.5(b)(iv)(C).
ARTICLE 11 - Miscellaneous.
Section 11.1 Notices.
(a) All notices and other communications under this
Agreement shall be in writing and shall be deemed to have been given three (3)
days after deposit in the mail, designated as certified mail, return receipt
requested, post-prepaid, or one (1) Business Day after being entrusted to a
reputable commercial overnight delivery service, or telecopy addressed to the
party to which such notice is directed at its address determined as provided in
this Section 11.1 All notices and other communications under this Agreement
shall be given to the parties hereto at the following addresses:
(i) If to the Borrower, to it at:
IRT PROPERTY COMPANY
200 Galleria Parkway N.W.
Suite 1400
Atlanta, Georgia 30339
Attn: Mary M. Thomas
Telecopy No.: (770) 988-8773
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(ii) If to the Administrative Agent, to it at:
NationsBank of Georgia, N.A.
600 Peachtree Street, N.E.
Suite 600
Atlanta, Georgia 30308
Attn: Gerald R. Massey, Jr.
Telecopy No.: (404) 607-4145
with a copy to:
Powell, Goldstein, Frazer & Murphy
191 Peachtree Street, N.E.
Suite 1600
Atlanta, Georgia 30303
Attn: James H. Keaten, Esq.
Telecopy No.: (404) 572-6999
(iii) If to the Banks, to them at:
NationsBank of Georgia, N.A.
600 Peachtree Street, N.E.
Suite 600
Atlanta, Georgia 30308
Attn: Gerald R. Massey, Jr.
Telecopy No.: (404) 607-4145
CoreStates Bank, N.A.
RE FCI-8-10-67
1339 Chesnut Street
Philadelphia, Pennsylvania 19107-7618
Attn: Glenn Gallagher
Telecopy No.: (215) 786-6381
AmSouth Bank of Alabama
1900 Fifth Avenue North
9th Floor
Birmingham, Alabama 35203
Attn: Arthur J. Sharbel, III
Commercial Real Estate Department
Telecopy No.: (205) 326-4075
or
P.O. Box 11007
Birmingham, Alabama 35288
Attn: Arthur J. Sharbel, III
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Commercial Real Estate Department
Telecopy No.: (205) 326-4075
Signet Bank\Virginia
7799 Leesburg Pike
4th Floor
Falls Church, Virginia 22043
Attn: Eric Lawrence and John Schissel
Telecopy No.: (703) 506-0284
SouthTrust Bank of Alabama, National Association
Commercial Real Estate
6525 Morrison Blvd., Suite 351
Charlotte, North Carolina 28211
Attn: Scott C. Gerlach, VP
Telecopy No.: (704) 367-1907
Copies shall be provided to persons other than parties hereto only in the case
of notices under Article 8 hereof.
(b) Any party hereto may change the address to which
notices shall be directed under this Section 11.1 by giving ten (10) days'
written notice of such change to the other parties. The Administrative Agent
may rely on the authority of any document delivered to it by any Bank and shall
have no obligation to make a determination as to authenticity or authorization
with respect to any Bank.
Section 11.2 Expenses. The Borrower agrees to promptly pay:
(a) All reasonable costs and out-of-pocket expenses of
the Administrative Agent and the Banks on the Agreement Date in connection with
the syndication, preparation, negotiation, execution, and delivery of this
Agreement and the other Loan Documents executed on the Agreement Date and
related due diligence, the transactions contemplated hereunder and thereunder,
and the making of the initial Advance hereunder, including, but not limited to,
the reasonable fees and disbursements of counsel for the Banks and the
Administrative Agent;
(b) All reasonable costs and out-of-pocket expenses of
the Administrative Agent in connection with the preparation, negotiation of any
waiver, amendment, or consent by the Banks relating to this Agreement or the
other Loan Documents whether or not executed, including, but not limited to,
the reasonable fees and disbursements of counsel for the Banks and the
Administrative Agent;
(c) All reasonable costs and out-of-pocket costs and
expenses of collection if default is made in the payment of the Notes, which in
each case shall include reasonable fees and out-of-pocket expenses of counsel
for the Administrative Agent and the Banks, and the reasonable
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fees and out-of-pocket expenses of counsel and of any experts, agents, or
consultants of the Administrative Agent and the Banks;
(d) All reasonable costs and expenses incurred by the
Administrative Agent pursuant to the provisions of Section 5.14 of this
Agreement;
(e) All taxes, assessments, general or special, and
other charges levied on, or assessed, placed or made against the Note or the
Obligations; and
(f) All reasonable out-of-pocket costs and expenses of
any restructuring, refinancing or "work out" of the transactions contemplated
by this Agreement, and of obtaining performance under this Agreement or the
other Loan Documents, and all reasonable out-of-pocket costs and expenses of
collection if default is made in the payment of the Note, which in each case
shall include reasonable fees and out-of-pocket expenses of special counsel for
the Administrative Agent and the Banks, and the reasonable fees and
out-of-pocket expenses of counsel and of any experts, agents, or consultants of
the Administrative Agent or any Bank.
Section 11.3 Waivers. The rights and remedies of the
Administrative Agent and the Banks under this Agreement and the other Loan
Documents shall be cumulative and not exclusive of any rights or remedies which
they would otherwise have. No failure or delay by the Administrative Agent,
the Majority Banks, or the Banks in exercising any right shall operate as a
waiver of such right. The Administrative Agent and the Banks expressly reserve
the right to require strict compliance with the terms of this Agreement in
connection with any funding of a request for an Advance. In the event the
Banks decide to fund a request for an Advance at a time when the Borrower is
not in strict compliance with the terms of this Agreement, such decision by the
Banks shall not be deemed to constitute an undertaking by the Banks to fund any
further requests for Advances or preclude the Banks from exercising any rights
available to the Banks under the Loan Documents or at law or equity. Any
waiver or indulgence granted by the Banks or by the Majority Banks shall not
constitute a modification of this Agreement, except to the extent expressly
provided in such waiver or indulgence, or constitute a course of dealing by the
Banks at variance with the terms of the Agreement such as to require further
notice by the Banks of the Banks' intent to require strict adherence to the
terms of the Agreement in the future.
Section 11.4 Set-Off. In addition to any rights now or
hereafter granted under Applicable Law and not by way of limitation of any such
rights, after the Maturity Date (whether by acceleration or otherwise), the
Banks and any subsequent holder or holders of the Notes are hereby authorized
by the Borrower at any time or from time to time, without notice to the
Borrower or to any other Person, any such notice being hereby expressly waived,
to set-off and to appropriate and apply any and all deposits (general or
special, time or demand, including, but not limited to, Indebtedness evidenced
by certificates of deposit, in each case whether matured or unmatured) and any
other Indebtedness at any time held or owing by the Banks or such holder to or
for the credit or the account of the Borrower, against and on account of the
obligations and liabilities of the Borrower, to the Banks or such holder under
this Agreement, the Notes, and any other Loan Document, including, but not
limited to, all claims of any nature or description arising out of or connected
with this Agreement, the Notes, or any other Loan Document, irrespective of
whether or
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not (a) the Banks or the holder of the Notes shall have made any demand
hereunder or (b) the Banks shall have declared the principal of and interest on
the Loans and Notes and other amounts due hereunder to be due and payable as
permitted by Section 8.2 hereof and although said obligations and liabilities,
or any of them, shall be contingent or unmatured. Any sums obtained by any
Bank or by any subsequent holder of the Notes shall be subject to the
application of payments provisions of Article 2 hereof. Upon direction by the
Administrative Agent, with the consent of the Majority Banks, after the
Maturity Date (whether by reason of acceleration or otherwise) each Bank
holding deposits of the Borrower shall exercise its set-off rights as so
directed.
Section 11.5 Assignment.
(a) The Borrower may not assign or transfer any of its
rights or obligations hereunder or under the Notes.
(b) Each of the Banks may at any time enter into
assignment agreements or participations with respect to its interest hereunder
and under the other Loan Documents with one or more other banks or other
Persons, provided, that (i) each Bank shall at all times maintain a Commitment
of not less than $10,000,000 (or lesser amount if a reduction of the overall
Commitment results in such Bank's Commitment being less than $10,000,000), (ii)
all assignments (other than assignments described in clause (iii) hereof) shall
be in minimum principal amounts of $10,000,000, (iii) each Bank may sell
assignments and participations of up to one hundred percent (100%) of its
interest hereunder to (A) one or more affiliates of such Bank, or (B) any
Federal Reserve Bank as collateral security pursuant to Regulation A of the
Board of Governors of the Federal Reserve System and any Operating Circular
issued by such Federal Reserve Bank (no such assignment shall relieve such Bank
from its obligations hereunder), and (iv) all assignments (other than
assignments described in clause (iii) hereof) and participations hereunder
shall be subject to the following additional terms and conditions:
(A) No such assignment or participation shall be
sold without the consent of the Administrative Agent, and prior to the
occurrence of a Default, the Borrower, which consent shall not be
unreasonably withheld.
(B) Any Person purchasing a participation or an
assignment of the Loans from any Bank shall be required to represent
and warrant that its purchase shall not constitute a "prohibited
transaction" (as defined in Section 4.1(n) hereof).
(C) The Borrower, the Banks, and the
Administrative Agent agree that assignments permitted hereunder
(including the assignment of any Advance or portion thereof) may be
made with all voting rights, and shall be made pursuant to an
Assignment and Assumption Agreement. An administrative fee of $2,500
shall be payable to the Administrative Agent by the assigning Bank at
the time of any assignment hereunder.
(D) No participation agreement shall confer any
rights under this Agreement or any other Loan Document to any purchaser
thereof, or relieve any issuing Bank from any of its obligations under
this Agreement, and all actions hereunder shall be conducted as if no
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such participation had been granted; provided, however, that any
participation agreement may confer on the participant the right to
approve or disapprove (within the same time periods required of Banks
hereunder) decreases in the interest rate, increases or forgiveness of
the principal amount of the Loans participated in by such participant,
decreases in fees, and extensions of the Maturity Date or other
principal payment date for the Loans.
(E) Each Bank agrees to provide the
Administrative Agent and the Borrower with prompt written notice of any
issuance of participations or assignments of its interests hereunder.
(F) No assignment, participation or other
transfer of any rights hereunder or under the Notes shall be effected
that would result in any interest requiring registration under the
Securities Act of 1933, as amended, or qualification under any state
securities law.
(G) No such assignment may be made to any bank or
other financial institution (x) with respect to which a receiver or
conservator (including, without limitation, the Federal Deposit
Insurance Corporation, the Resolution Trust Corporation or the Office
of Thrift Supervision) has been appointed or (y) that has failed to
meet any of the capital requirements of its primary regulator or
insurer.
(H) If applicable, each Bank shall, and shall
cause each of its assignees to provide to the Administrative Agent on
or prior to the Agreement Date or effective date of any assignment, as
the case may be, an appropriate Internal Revenue Service form as
required by Applicable Law supporting such Bank's position that no
withholding by the Borrower or the Administrative Agent for U.S. income
tax payable by the Bank in respect of amounts received by it hereunder
is required. For purposes of this Agreement, an appropriate Internal
Revenue Service form shall mean Form 1001 (Ownership Exemption or
Reduced Rate Certificate of the U.S. Department of Treasury), or Form
4224 (Exemption from Withholding of Tax on Income Effectively Connected
with the Conduct of a Trade or Business in the United States), or any
successor or related forms adopted by the relevant U.S. taxing
authorities.
(c) Except specifically set forth in Section 11.5(b)
hereof, nothing in this Agreement or the Notes, expressed or implied, is
intended to or shall confer on any Person other than the respective parties
hereto and thereto and their successors and assignees permitted hereunder and
thereunder any benefit or any legal or equitable right, remedy or other claim
under this Agreement or the Notes.
(d) In the case of any participation, all amounts
payable by the Borrower under the Loan Documents shall be calculated and made
in the manner and to the parties hereto as if no such participation had been
sold.
(e) The Borrower hereby covenants and agrees that upon
the effectiveness of any assignment hereunder, it will promptly provide to the
Administrative Agent for the benefit of the
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relevant Banks duly executed replacement promissory notes in the amount of each
Bank's Commitment in substantially the form of Exhibit A attached hereto.
Section 11.6 Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an original,
but all such separate counterparts shall together constitute but one and the
same instrument.
Section 11.7 Governing Law. This Agreement and the Notes shall
be construed in accordance with and governed by the internal laws of the State
of Georgia.
Section 11.8 Severability. Any provision of this Agreement
which is prohibited or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof in that jurisdiction or affecting the validity or enforceability of such
provision in any other jurisdiction.
Section 11.9 Headings. Headings used in this Agreement are for
convenience only and shall not be used in connection with the interpretation of
any provision hereof.
Section 11.10 Interest.
(a) In no event shall the amount of interest due or
payable hereunder or under the Notes exceed the maximum rate of interest
allowed by Applicable Law, and in the event any such payment is inadvertently
made by the Borrower or is inadvertently received by any Bank, then such excess
sum shall be returned forthwith to the Borrower; provided, however, that if an
Event of Default then exists, such amounts shall be credited to principal of
the Obligations. It is the express intent hereof that the Borrower not pay and
the Banks not receive, directly or indirectly in any manner whatsoever,
interest in excess of that which may legally be paid by the Borrower under
Applicable Law.
(b) Notwithstanding the use by the Banks of the Prime
Rate, the LIBOR Rate and the Federal Funds Rate as reference rates for the
determination of interest on the Loans, the Banks shall be under no obligation
to obtain funds from any particular source in order to charge interest to the
Borrower at interest rates tied to such reference rates.
Section 11.11 Entire Agreement. Except as otherwise expressly
provided herein, this Agreement, the Notes, and the Loan Documents to which the
Borrower is a party embody the entire Agreement and understanding among the
parties hereto and thereto and supersede all prior agreements, understandings,
and conversations relating to the subject matter hereof and thereof.
Section 11.12 Amendment and Waiver. Neither this Agreement nor
any term hereof may be amended orally, nor may any provision hereof be waived
orally but only by an instrument in writing signed by the Majority Banks and,
in the case of an amendment, also by the Borrower, except that in the event of
(a) any increase in the amount of such Bank's Commitment, (b) any decrease
(other than pro rata) in the amount of the Commitment, (c) any change in the
timing of, or reduction of the amount of, payments of principal, interest, and
fees due hereunder or any
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amendment to the definition of "Applicable Margin," "Interest Rate Basis" or
"Maturity Date," (d) any release or impairment of any collateral or any
guaranty issued in favor of the Administrative Agent and the Banks with respect
to the Agreement and the Loans, (e) any waiver of any Event of Default due to
the failure by the Borrower to pay any sum due hereunder, or (f) any amendment
of this Section 11.12 or of the definition of Majority Banks, any amendment or
waiver may be made only by an instrument in writing signed by each of the Banks
and, in the case of an amendment, also by the Borrower. Any amendment to any
provision hereunder governing the rights, obligations, or liabilities of the
Administrative Agent in its capacity as such, may be made only by an instrument
in writing signed by such affected Person and by each of the Banks.
Section 11.13 Other Relationships. No relationship created
hereunder or under any other Loan Document shall in any way affect the ability
of the Administrative Agent and each Bank to enter into or maintain business
relationships with the Borrower, or any of its Affiliates, beyond the
relationships specifically contemplated by this Agreement and the other Loan
Documents.
Section 11.14 Bank Wiring Instructions. On or prior to the
Agreement Date, each Bank shall provide in writing to the Administrative Agent
appropriate information for wire transfer of funds to be paid to such Bank
hereunder, together with the names and sample signatures for an authorized
signatory for such Bank. Unless the Administrative Agent receives notice
(delivered in accordance with Section 11.1 hereof) from a Bank hereunder of any
change with respect to wire transfers or authorization, the Administrative
Agent shall be entitled to assume that there have been no changes with respect
thereto.
Section 11.15 Confidentiality. The Banks shall hold all
non-public, proprietary or confidential information (which has been identified
as such by the Borrower) obtained pursuant to the requirements of this
Agreement in accordance with their customary procedures for handling
confidential information of this nature and in accordance with safe and sound
banking practices; provided, however, the Banks may make disclosure of any such
information to such of their examiners, affiliates, outside auditors, counsel,
consultants, appraisers and other professional advisors as may be reasonably
necessary in connection with this Agreement or as reasonably required by any
proposed syndicate member or any proposed transferee or participant in
connection with the contemplated transfer of any Note or participation therein
or as required or requested by any governmental authority or representative
thereof or in connection with the enforcement hereof or of any Loan Document or
related document or pursuant to legal process or with respect to any litigation
between or among the Borrower and any of the Banks; provided, however, that, as
a condition to receipt of any such information, each such affiliate, auditor,
counsel, consultant, appraiser, professional advisor, proposed transferee or
participant shall agree in writing to treat all such information as
confidential; and provided, further, that prior to any such disclosure to any
unrelated entity outside the ordinary course of business or pursuant to legal
process, the disclosing Bank shall give notice of such disclosure to the
Borrower and cooperate with the Borrower in any efforts to limit or restrict
such disclosure. In no event shall any Bank be obligated or required to return
any materials furnished to it by the Borrower. The foregoing provisions shall
not apply to a Bank with respect to information that (i) is or becomes
generally available to the public (other than through such Bank), (ii) is
already in the possession of such Bank on a nonconfidential basis, or (iii)
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<PAGE> 63
comes into the possession of such Bank in a manner not known to such Bank to
involve a breach of a duty of confidentiality owing to the Borrower.
ARTICLE 12 - Waiver of Jury Trial.
Section 12.1 Waiver of Jury Trial. THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE BANKS, HEREBY AGREE TO WAIVE AND HEREBY WAIVE THE
RIGHT TO A TRIAL BY JURY IN ANY COURT AND IN ANY ACTION OR PROCEEDING OF ANY
TYPE IN WHICH THE BORROWER, ANY OF THE BANKS, THE ADMINISTRATIVE AGENT OR ANY
OF THEIR RESPECTIVE SUCCESSORS OR ASSIGNS IS A PARTY, AS TO ALL MATTERS AND
THINGS ARISING DIRECTLY OR INDIRECTLY OUT OF THIS AGREEMENT, ANY OF THE NOTES
OR THE OTHER LOAN DOCUMENTS AND THE RELATIONS AMONG THE PARTIES LISTED IN THIS
SECTION 12.1. EXCEPT AS PROHIBITED BY LAW, EACH PARTY TO THIS AGREEMENT WAIVES
ANY RIGHTS IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN
THIS SECTION, ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY
DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. EACH PARTY TO THIS
AGREEMENT (i) CERTIFIES THAT NEITHER ANY REPRESENTATIVE, AGENT OR ATTORNEY OF
THE ADMINISTRATIVE AGENT OR ANY BANK HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT THE ADMINISTRATIVE AGENT OR ANY BANK WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (ii) ACKNOWLEDGES THAT IT
HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND EACH OTHER LOAN DOCUMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. THE
PROVISIONS OF THIS SECTION HAVE BEEN FULLY DISCLOSED BY AND TO THE PARTIES AND
THE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. NO PARTY HAS IN ANY WAY
AGREED WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF THIS
SECTION WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused it to be executed under seal by their duly authorized officers, all as
of the day and year first above written.
BORROWER: IRT PROPERTY COMPANY, a Georgia corporation
By: /s/Donald W. MacLeod
---------------------------------------
Title: Chairman
---------------------------------
Attest: /s/Lee A. Harris
-----------------------------------
Title: Senior Vice President & Secretary
---------------------------------
ADMINISTRATIVE AGENT: NATIONSBANK OF GEORGIA, N.A.
By: /s/Gerald R. Massey, Jr.
---------------------------------------
Its: Senior Vice President
---------------------------------
BANKS: NATIONSBANK OF GEORGIA, N.A.
By: /s/Gerald R. Massey, Jr.
---------------------------------------
Its: Senior Vice President
------------------------------
CORESTATES BANK, N.A.
By: /s/Glenn W. Gallagher
---------------------------------------
Its: Vice President
------------------------------
AMSOUTH BANK OF ALABAMA
By: /s/Arthur J. Sharbel, III
---------------------------------------
Its: Vice President
------------------------------
LOAN AGREEMENT
IRT PROPERTY COMPANY
SIGNATURE PAGE 58 -58-
<PAGE> 65
SIGNET BANK\VIRGINIA
By: /s/John A. Schissel
--------------------------------
Its: Vice President
-----------------------
SOUTHTRUST BANK OF ALABAMA, NATIONAL
ASSOCIATION
By: /s/Michael L. Tillman
--------------------------------
Its: Group Vice President
-----------------------
LOAN AGREEMENT
IRT PROPERTY COMPANY
SIGNATURE PAGE 59 -59-
