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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 1, 1999
IRT PROPERTY COMPANY
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
GEORGIA 1-7859 58-1366611
(State or other (Commission file number) (I.R.S. Employer
jurisdiction of incorporation) Identification No.)
</TABLE>
200 GALLERIA PARKWAY
SUITE 1400
ATLANTA, GEORGIA 30339
(Address of principal executive offices)
(770) 955-4406
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS.
IRT Property Company (the "Company") and its bank creditors entered a
$100,000,000 Credit Agreement dated as of November 1, 1999 among the Company,
Wachovia Bank, N.A., First Union National Bank, Wachovia Securities, Inc.,
AmSouth Bank, SouthTrust Bank, N.A., and SunTrust Bank, Atlanta (the "New
Credit Agreement"). Proceeds of the New Credit Agreement were used to pay off
the Amended and Restated Loan Agreement, dated as of September 9, 1998, by and
among the Company and NationsBank, N.A., AmSouth Bank and First Union National
Bank, as Banks, NationsBank, N.A., as the Swing Loan Lender, and NationsBank,
N.A., as the Administrative Agent for the Banks (the "Old Credit Agreement").
The Company has also entered a $5,000,000 Revolving Loan Credit Agreement dated
as of November 1, 1999, between the Company and Wachovia Bank, N.A. (the "Swing
Line Agreement"). In connection with the extension of the New Credit Agreement
and the Swing Line Agreement, the Company's bank creditors requested that IRT
Capital Corporation II ("IRTCCII"), IRT Management Company ("IRTMC"), and IRT
Alabama, Inc. ("IRTAI"), guarantee the Company's indebtedness under the New
Credit Agreement and the Swing Line Agreement.
The Company, as issuer, IRTCCII, IRTMC, IRTAI, and IRT Partners L.P.
("LP"), as guarantors (collectively, the "Guarantors"), and SunTrust Bank,
Atlanta, as trustee (the "Trustee") entered into Supplemental Indenture No. 4
("Supplemental Indenture No. 4"), dated as of November 1, 1999, pursuant to
which the Guarantors have guaranteed the Company's "Obligations" (as defined in
the Supplemental Indenture No. 4) under senior debt securities of the Company
issued, or to be issued, under the Indenture between the Company and the
Trustee, dated November 9, 1995, previously filed with the Company's Shelf
Registration Statement No. 33-63523 on Form S-3 (as amended, supplemented or
otherwise modified through the date hereof).
Similarly, the Company, as issuer, the Guarantors, as guarantors, and
the Trustee, as trustee, have entered into Supplemental Indenture No. 2
("Supplemental Indenture No. 2"), dated as of November 1, 1999, pursuant to
which the Guarantors have guaranteed the Company's "Obligations" (as defined in
Supplemental Indenture No. 2) under senior debt securities of the Company
issued, or to be issued, under the Indenture between the Company and the
Trustee, dated September 9, 1998, the form of which was previously filed with
the Company's Shelf Registration Statement No. 333-48571 on Form S-3 (as
amended, supplemented or otherwise modified through the date hereof).
Copies of the New Credit Agreement, the Swing Line Agreement,
Supplemental Indenture No. 4, and Supplemental Indenture No. 2 are included as
Exhibits hereto, and all descriptions included herein are qualified in their
entirety by reference thereto.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
<TABLE>
<CAPTION>
(c) Exhibits
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Exhibit No. Description
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<S> <C>
4.5 Supplemental Indenture No. 2, dated as of
November 1, 1999, among IRT Property
Company, as issuer, IRT Capital Corporation
II, IRT Management Company, IRT Alabama,
Inc., and IRT Partners L.P., as guarantors,
and SunTrust Bank, Atlanta, as trustee
(Registration Statement No. 333-48571)
4.7 Supplemental Indenture No. 4, dated as of
November 1, 1999, among IRT Property
Company, as issuer, IRT Capital Corporation
II, IRT Management Company, IRT Alabama,
Inc., and IRT Partners L.P., as guarantors,
and SunTrust Bank, Atlanta, as trustee
(Registration Statement No. 33-63523)
10.12 $100,000,000 Credit Agreement dated as of
November 1, 1999, among the Company,
Wachovia Bank, N.A., First Union National
Bank, Wachovia Securities, Inc., AmSouth
Bank, SouthTrust Bank, N.A., and SunTrust
Bank, Atlanta which replaces the Amended and
Restated Loan Agreement, dated as of
September 9, 1998, by and among the Company
and NationsBank, N.A., AmSouth Bank and
First Union National Bank, as Banks,
NationsBank, N.A., as the Swing Loan Lender,
and NationsBank, N.A., as the Administrative
Agent for the Banks, including the Guaranty
files as an exhibit to the Company's report
on Form 8-K dated September 15, 1998.
10.13 $5,000,000 Revolving Loan Credit Agreement
dated as of November 1, 1999, between the
Company and Wachovia Bank, N.A.
</TABLE>
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
IRT PROPERTY COMPANY
Date: November 12, 1999 By: /s/ James G. Levy
-----------------------------
James G. Levy
Senior Vice President & Chief
Accounting Officer
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EXHIBIT 4.5
IRT PROPERTY COMPANY
Issuer
and
EACH OF THE GUARANTORS A PARTY HERETO
the Guarantors
to
SUNTRUST BANK, ATLANTA
Trustee
Supplemental Indenture No. 2
Dated as of November 1, 1999
GUARANTEE OF SENIOR DEBT SECURITIES
SUPPLEMENTAL INDENTURE NO. 2, dated as of November 1, 1999 (this
"Supplemental Indenture"), among IRT PROPERTY COMPANY, a corporation duly
organized and existing under the laws of the State of Georgia (the "Company"),
IRT CAPITAL CORPORATION II, a Georgia corporation, IRT PARTNERS L.P., a Georgia
limited partnership, IRT MANAGEMENT COMPANY, a Georgia corporation and IRT
ALABAMA, INC., an Alabama corporation (each individually a "Guarantor," and
collectively, the "Guarantors" which term shall include each entity which
becomes a Guarantor pursuant to Paragraph 2.13 hereof) and SUNTRUST BANK,
ATLANTA, a Georgia banking corporation duly organized and existing under the
laws of the State of Georgia, as Trustee (the "Trustee").
RECITALS
WHEREAS, the Company and the Trustee have heretofore entered into an
Indenture dated as of September 10, 1998 (as amended, supplemented or otherwise
modified through the date hereof, the "Indenture"), a form of which has been
filed with the Securities and Exchange Commission under the Securities Act of
1933, as amended, as an exhibit to the Company's Registration Statement on Form
S-3 (Registration No. 333-48571), providing for the issuance from time to time
of senior debt securities of the Company (the "Securities");
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WHEREAS, the Company has caused each Guarantor to provide a guaranty
of the obligations of the Company under certain of its Existing Senior
Indebtedness;
WHEREAS, the Guarantors are required pursuant to the Indenture to
provide the guaranty herein set forth (the "Guaranty") of the Obligations (as
defined herein);
WHEREAS, IRT Partners L.P. (the "Existing Guarantor") has previously
provided a guaranty of the Obligations pursuant to that certain Supplemental
Indenture No. 1 dated as of September 10, 1998, among the Company, the Existing
Guarantor and the Trustee and intends to amend and restate such guaranty in its
entirety herein;
WHEREAS, Sections 901(6) and 901(10) of the Indenture permit the
Company and the Trustee to enter into indentures supplemental thereto without
the consent of any Holder of Securities to make any change to the Indenture,
provided that such change does not adversely affect the interests of the
Holders of Securities of any series or any related coupons in any material
respect;
WHEREAS, each Guarantor has determined that its execution, delivery
and performance of this Supplemental Indenture directly benefit, and are within
the corporate or partnership purposes, as applicable, and best interests of,
such Guarantor;
WHEREAS, the Board of Directors of each Guarantor and the Company has
duly adopted resolutions authorizing such Guarantor or the Company, as
applicable to execute and deliver this Supplemental Indenture and the Board of
Directors of the Guarantor's general partner has duly adopted resolutions
authorizing the Guarantor to execute and deliver this Supplemental Indenture;
and
WHEREAS, all other conditions and requirements necessary to make this
Supplemental Indenture, when duly executed and delivered, a valid and binding
agreement in accordance with its terms and for the purposes herein expressed,
have been performed and fulfilled.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
each Guarantor hereby unconditionally guarantees to the Trustee and the Holders
full and prompt payment and performance when due, whether at maturity, by
acceleration or otherwise, of all Obligations. Each Obligation shall rank pari
passu with each other Obligation.
ARTICLE ONE
DEFINITIONS
SECTION 1.1. Definitions. For all purposes of this Supplemental
Indenture, except as otherwise expressly provided for or unless the context
otherwise requires:
(a) capitalized terms used but not defined herein shall have
the respective meanings assigned to them in the Indenture; and
(b) all references herein to Articles and Sections refer to
the corresponding
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Articles and Sections of this Supplemental Indenture. As used herein,
"Obligations" means (a) all payment and performance obligations of the Company
(i) under the Indenture with respect to the Securities, (ii) under the
Securities and (iii) as a result of the issuance of the Securities and (b) the
obligation to pay an amount equal to the amount of any and all damages which
the Trustee and the Holders, or any of them, may suffer by reason of a breach
by either the Company or any other obligor of any obligation, covenant or
undertaking under (i) the Indenture with respect to the Securities or (ii) the
Securities.
ARTICLE TWO
GUARANTY
SECTION 2.1. Obligations Several. Regardless of whether any other
Guarantor, proposed guarantor or any other Person or Persons is, are or shall
become in any other way responsible to the Trustee and the Holders, or any of
them, for or in respect of the Obligations or any part thereof, and regardless
of whether or not any Person or Persons now or hereafter responsible to the
Trustee and the Holders, or any of them, for the Obligations or any part
thereof, whether under this Guaranty or otherwise, shall cease to be so liable,
each Guarantor hereby declares and agrees that this Guaranty is and shall
continue to be a several obligation (as well as a joint one), shall be a
continuing guaranty and shall be operative and binding. Each Guarantor hereby
agrees that it will not exercise any rights which it may acquire by way of
subrogation under this Guaranty, by any payment made hereunder or otherwise,
unless and until all of the Obligations shall have been paid in full. If any
amount shall be paid to any Guarantor on account of such subrogation rights at
any time when all of the Obligations shall not have been paid in full, such
amount shall be held in trust for the benefit of the Trustee and the Holders
and shall forthwith be paid to the Trustee to be credited and applied upon the
Obligations, whether matured or unmatured, in accordance with the terms of the
Indenture, but subject to the provisions of Section 2.7 hereof.
SECTION 2.2. Guaranty Final. Upon the execution and delivery of this
Guaranty to the Trustee, this Guaranty shall be deemed to be finally executed
and delivered by each Guarantor and shall not be subject to or affected by any
promise or condition affecting or limiting such Guarantor's liability, and no
statement, representation, agreement or promise on the part or the Trustee, the
Holders, the Company, or any of them, or any officer, employee or agent
thereof, unless contained herein forms any part of this Guaranty or has induced
the making hereof or shall be deemed in any way to affect such Guarantor's
liability hereunder. The Guarantors' obligations hereunder shall remain in full
force and effect until all Obligations shall have been paid in full.
SECTION 2.3. Amendment and Waiver. No alteration or waiver of this
Supplemental Indenture or of any of its terms, provisions or conditions shall
be binding upon the parties against whom enforcement is sought unless made in
writing and signed by an authorized officer of such party or its general
partner, as applicable.
SECTION 2.4. Dealings With the Company. The Trustee and the Holders,
or any of them, may, from time to time, without exonerating or releasing any
Guarantor in any way under this Guaranty, (i) take such further or other
security or securities for the Obligations or any part thereof as the Trustee
and the Holders, or any of them, may deem proper, consistent with the
Indenture, or (ii) release, discharge, abandon or otherwise deal with or fail
to deal with any Guarantor or other guarantor or obligor of the Obligations or
any security or securities therefor or
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any part thereof now or hereafter held by the Trustee and the Holders, or any
of them, or (iii) consistent with the Indenture, amend, modify, extend,
accelerate or waive in any manner any of the provisions, terms, or conditions
of the Indenture or the Securities, all as the Trustee or the Holders, or any
of them, may consider expedient or appropriate in their sole discretion.
Without limiting the generality of the foregoing, or of Section 2.5 hereof, it
is understood that the Trustee and the Holders, or any of them, may, without
exonerating or releasing any Guarantor, give up, or modify or abstain from
perfecting or taking advantage of any security for the Obligations and accept
or make any compositions or arrangements, and realize upon any security for the
Obligations when, and in such manner, as the Trustee and the Holders, or any of
them, may deem expedient, consistent with the Indenture, all without notice to
any Guarantor.
SECTION 2.5. Guaranty Unconditional. Each Guarantor acknowledges and
agrees that no change in the nature or terms of the Obligations or any of the
Indenture or the Securities, or other agreements, instruments or contracts
evidencing, related to or attendant with the Obligations (including any
novation), nor any determination of lack of enforceability thereof, shall
discharge all or any part of the liabilities and obligations of such Guarantor
pursuant to this Guaranty; it being the purpose and intent of the Guarantors,
the Trustee and the Holders that the covenants, agreements and all liabilities
and obligations of the Guarantors hereunder are absolute, unconditional and
irrevocable under any and all circumstances. Without limiting the generality of
the foregoing, each Guarantor agrees that until each and every one of the
covenants and agreements of this Guaranty is fully performed, such Guarantor's
undertakings hereunder shall not be released, in whole or in part, by any
action or thing which might, but for this paragraph of this Guaranty, be deemed
a legal or equitable discharge of a Guarantor or surety or guarantor, or by
reason of any waiver, omission of the Trustee or the Holders, or any of them,
or their failure to proceed promptly or otherwise, or by reason of any action
taken or omitted by the Trustee or the Holders, or any of them, whether or not
such action or failure to act varies or increases the risk of, or affects the
rights or remedies of, such Guarantor or by reason of any further dealings
between the Company, the Trustee, and the Holders, or any of them, or any other
Guarantor or guarantor or surety, and each Guarantor hereby expressly waives
and surrenders any defense to its liability hereunder, or any right of
counterclaim or offset of any nature or description which it may have or which
may exist based upon, and shall be deemed to have consented to, any of the
foregoing acts, omissions, things, agreements or waivers.
SECTION 2.6. Bankruptcy. Each Guarantor agrees that upon the
bankruptcy or winding up or other distribution of assets of the Company or any
Subsidiary of the Company (other than such Guarantor) or of any other Guarantor
or surety or guarantor for the Obligations, the rights of the Trustee and the
Holders, or any of them, against such Guarantor shall not be affected or
impaired by the omission of the Trustee or the Holders, or any of them, to
prove its or their claim, as appropriate, or to prove its or their full claim,
as appropriate, and the Trustee and the Holders may prove such claims as they
see fit and may refrain from proving any claim and in their respective
discretion they may value as they see fit or refrain from valuing any security
held by the Trustee and the Holders, or any of them, without in any way
releasing, reducing or otherwise affecting the liability to the Trustee and the
Holders of such Guarantor. If acceleration of the time for payment of any
amount payable by the Company under the Indenture or the Securities is stayed
upon the insolvency, bankruptcy or reorganization of the Company, all such
amounts otherwise subject to acceleration under the terms of the Indenture or
the Securities shall nonetheless be payable by each Guarantor hereunder
forthwith on demand by the Trustee made at the request of the Holders. If at
any time any payment of the principal of or interest on any
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Security or any other amount payable by the Company under the Indenture is
rescinded or must be otherwise restored or returned upon the insolvency,
bankruptcy or reorganization of the Company, any other Guarantor or otherwise,
the Guarantors' obligations hereunder with respect to such payment shall be
reinstated as though such payment had been due but not made at such time.
SECTION 2.7. Application of Payments. The Trustee hereby acknowledges
and agrees, and each Holder shall be deemed to hereby acknowledge and agree,
that to the extent any of the Existing Senior Obligations (as defined below) is
then in default, any funds, payments, claims or distributions (the "Guaranty
Proceeds") actually received hereunder shall be made available for distribution
equally and ratably (based on the principal amounts then outstanding) among (a)
the holders of the Obligations and (b) the holders of the Existing Senior
Obligations. For purposes hereof, "Existing Senior Obligations" shall mean Debt
for borrowed money owed or guaranteed in connection with any unsecured and
non-subordinated Debt for borrowed money of the Company or the Guarantor (a)
issued in offerings registered under the Securities Act of 1933 or in
placements exempt from registration pursuant to Rule 144A or Regulation S
thereunder, or (b) otherwise incurred, which is, in either case, outstanding on
the date hereof or incurred hereafter in accordance with the Indenture
(including, without limitation, the Debt of the Company incurred in connection
with (i) the Credit Agreement dated as of the date hereof, as amended or
supplemented from time to time, among the Company, Wachovia Bank, N.A., as
Agent and as a Bank, and certain other Banks parties thereto from time to time
and (ii) the Revolving Loan Credit Agreement dated as of the date hereof, as
amended or supplemented from time to time, between the Company and Wachovia
Bank, N.A.). This Section 2.7 shall not apply to any payments, funds, claims or
distributions received by the Trustee or any Holder directly or indirectly from
the Company or any other Person other than from the Guarantors hereunder. Each
Guarantor acknowledges and agrees with the Trustee and each Holder as follows:
(a) to the extent any Guaranty Proceeds are distributed to
the holders of the Existing Senior Obligations, the Obligations shall not be
deemed reduced by any such distribution, and such Guarantor will continue to
make payments pursuant to the Guaranty until such time as the Obligations have
been paid in full after taking into effect any distributions of Guaranty
Proceeds to the holders of Existing Senior Obligations;
(b) nothing contained herein shall be deemed to limit, modify
or alter the rights of the Trustee and the Holders or be deemed to subordinate
the Obligations to the Existing Senior Obligations, nor give to any holder of
Existing Senior Obligations any rights of subrogation;
(c) nothing contained herein shall be deemed to be for the
benefit of any holders of Existing Senior Obligations nor shall anything be
construed to impose on the Trustee or any Holder any fiduciary duties,
obligations or responsibilities to the holders of the Existing Senior
Obligations; and
(d) the Guaranty is for the sole benefit of the Trustee and
the Holders and their respective successors and assigns, and any amounts
received by the Trustee and the Holders, or any of them, from whatsoever source
and applied toward the payment of the Obligations shall be applied in such
order of application as is set forth in the Indenture, if any.
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SECTION 2.8. Waivers by Guarantor. Each Guarantor hereby expressly
waives: (a) notice of acceptance of this Guaranty, (b) notice of the existence
or creation of all or any of the Obligations, (c) presentment, demand, notice
of dishonor, protest, and all other notices whatsoever, (d) all diligence in
collection or protection of or realization upon the Obligations or any part
thereof, any obligation hereunder, or any security for any of the foregoing and
(e) all rights of subrogation, indemnification, contribution and reimbursement
against the Company, all rights to enforce any remedy the Trustee and the
Holders, or any of them, may have against the Company and any benefit of, or
right to participate in, any collateral or security now or hereinafter held by
the Trustee and the Holders, or any of them, in respect of the Obligations,
even upon payment in full of the Obligations. Any money received by any
Guarantor in violation of this Section shall be held in trust by such Guarantor
for the benefit of the Trustee and the Holders. If a claim is ever made upon
the Trustee and the Holders, or any of them, for the repayment or recovery of
any amount or amounts received by any of them in payment of any of the
Obligations and such Person repays all or part of such amount by reason of (a)
any judgment, decree, or order of any court or administrative body having
jurisdiction over such Person or any of its property, or (b) any good faith
settlement or compromise of any such claim effected by such Person with any
such claimant, including the Company, then in such event such Guarantor agrees
that any such judgment, decree, order, settlement, or compromise shall be
binding upon such Guarantor, notwithstanding any revocation hereof or the
cancellation of any promissory note or other instrument evidencing any of the
Obligations, and such Guarantor shall be and remain obligated to such Person
hereunder for the amount so repaid or recovered to the same extent as if such
amount had never originally been received by such Person.
SECTION 2.9. Remedies Cumulative. No delay by the Trustee and the
Holders, or any of them, in the exercise of any right or remedy shall operate
as a waiver thereof, and no single or partial exercise by the Trustee and the
Holders, or any of them, of any right or remedy shall preclude other or further
exercise thereof or the exercise of any other right or remedy. No action by the
Trustee and the Holders, or any of them, permitted hereunder shall in any way
impair or affect the Guaranty. For the purpose of the Guaranty, the Obligations
shall include, without limitation, all Obligations of the Company to the
Trustee and the Holders, notwithstanding any right or power of any third party,
individually or in the name of the Company or any other Person, to assert any
claim or defense as to the invalidity or unenforceability of any such
Obligation, and no such claim or defense shall impair or affect the obligations
of the Guarantor hereunder.
SECTION 2.10. Miscellaneous. The Guaranty is a guaranty of payment and
not of collection. In the event of a demand upon the Guarantor under the
Guaranty, the Guarantor shall be held and bound to the Trustee and the Holders
directly as debtor in respect of the payment of the amounts hereby guaranteed.
All reasonable costs and expenses, including attorneys' fees and expenses,
incurred by the Trustee and the Holders, or any of them, in obtaining
performance of or collecting payments due under the Guaranty shall be deemed
part of the Obligations guaranteed hereby. The provisions of the Guaranty are
for the benefit of the Trustee and the Holders and may not be relied upon or
enforced by any other Person without the express written consent of the Trustee
and, as to enforcement, may only be enforced in accordance with this
Supplemental Indenture and the Indenture.
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SECTION 2.11. Benefit to Guarantor. The Guarantor expressly represents
and acknowledges that the issuance and sale of the Securities under the
Indenture has been, and will be, of direct interest, benefit and advantage to
the Guarantor.
SECTION 2.12. Solvency. The Guarantor expressly represents and
warrants that as of the date hereof and after giving effect to the transactions
contemplated by the Indenture (a) the capital of the Guarantor will not be
unreasonably small to conduct its business; (b) the Guarantor will not have
incurred debts, or have intended to incur debts, beyond its ability to pay such
debts as they mature; and (c) the present fair salable value of the assets of
the Guarantor is greater than the amount that will be required to pay its
probable liabilities (including debts) as they become absolute and matured. For
purposes of this Section 2.12, "debt" means any liability on a claim, and
"claim" means (x) the right to payment, whether or not such right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
undisputed, legal, equitable, secured or unsecured, or (y) the right to an
equitable remedy for breach of performance if such breach gives rise to a right
to payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, undisputed, secured or
unsecured.
SECTION 2.13. Additional Guarantors; Release of Guarantors. Any
Subsidiary of the Company or any other entity may become a party to this
Guaranty by executing and delivering a Supplemental Indenture providing for a
guaranty of the Obligations under the terms of this Article 2. Under certain
circumstances, a Guarantor may be released by the Trustee of its obligations
under this Guaranty. Each other Guarantor consents and agrees to any such
releases and agrees that no such release shall affect its obligations
hereunder, except as to the Guarantor so released.
SECTION 2.14 Contribution Agreement. To the extent that any Guarantor
shall, under the Guaranty, make a payment (a "Guarantor Payment") of a portion
of the Obligations, then, without limiting its rights of subrogation against
the Company, such Guarantor shall be entitled to contribution and
indemnification from, and be reimbursed by, each of the other Guarantors and
the Company (each of the foregoing referred to herein individually as a
"Contributing Party" and collectively as the "Contributing Parties") in an
amount, for each such Contributing Party, equal to a fraction of such Guarantor
Payment, the numerator of which fraction is such Contributing Party's Allocable
Amount and the denominator of which is the sum of the Allocable Amounts of all
of the Contributing Parties.
As of any date of determination, the "Allocable Amount" of each
Contributing Party shall be equal to the maximum amount of liability which
could be asserted against such Contributing Party hereunder with respect to the
applicable Guarantor Payment without (i) rendering such Contributing Party
"insolvent" within the meaning of Section 101(31) of the Federal Bankruptcy
Code (the "Bankruptcy Code") or Section 2 of either the Uniform Fraudulent
Transfer Act (the "UFTA") or the Uniform Fraudulent Conveyance Act (the
"UFCA"), (ii) leaving such Contributing Party with unreasonably small capital,
within the meaning of Section 548 of the Bankruptcy Code or Section 4 of the
UFTA or Section 5 of the UFCA, or (iii) leaving such Contributing Party unable
to pay its debts as they become due within the meaning of Section 548 of the
Bankruptcy Code or Section 4 of the UFTA or Section 6 of the UFCA.
This Section 2.14 is intended only to define the relative rights of
the Contributing Parties, and nothing set forth in this Agreement is intended
to or shall impair the obligations of the
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Guarantors, jointly and severally, to pay any amounts, as and when the same
shall become due and payable in accordance with the terms of the Guaranty.
The parties hereto acknowledge that the rights of contribution and
indemnification hereunder shall constitute assets in favor of each Guarantor to
which such contribution and indemnification is owing.
This Section 2.14 shall continue in full force and effect and may not
be terminated or otherwise revoked by any Contributing Party until all of the
Guaranteed Obligations shall have been indefeasibly paid in full (in lawful
money of the United States of America) and discharged and the Indenture and
Securities shall have been terminated. Each Contributing Party agrees that if,
notwithstanding the foregoing, such Contributing Party shall have any right
under applicable law to terminate or revoke this Agreement, and such
Contributing Party shall attempt to exercise such right, then such termination
or revocation shall not be effective until a written notice of such revocation
or termination, specifically referring hereto and signed by such Contributing
Party, is actually received by each of the other Contributing Parties and by
the Trustee at its notice address set forth in the Indenture. Such notice shall
not affect the right or power of any Contributing Party to enforce rights
arising prior to receipt of such written notice by each of the other
Contributing Parties and the Trustee.
Section 2.15. NO NOVATION. THE PARTIES HERETO HAVE ENTERED INTO THIS
GUARANTY SOLELY TO AMEND AND RESTATE THE TERMS OF THE GUARANTY CONTAINED IN
THAT CERTAIN SUPPLEMENTAL INDENTURE NO. 1, DATED AS OF SEPTEMBER 10, 1998,
AMONG THE COMPANY, THE TRUSTEE AND IRT PARTNERS, L.P. (THE "EXISTING
GUARANTY"). THE PARTIES DO NOT INTEND THIS SUPPLEMENTAL INDENTURE, NOR THE
TRANSACTIONS CONTEMPLATED HEREBY, TO BE, AND THIS SUPPLEMENTAL INDENTURE AND
THE TRANSACTIONS CONTEMPLATED HEREBY SHALL NOT BE CONSTRUED TO BE, A NOVATION
OR WAIVER OF ANY OF THE OBLIGATIONS OWING BY THE EXISTING GUARANTOR UNDER OR IN
CONNECTION WITH THE EXISTING GUARANTY.
ARTICLE THREE
MISCELLANEOUS PROVISIONS
SECTION 3.1. Ratification of Indenture. Except as expressly modified
or amended hereby, the Indenture continues in full force and effect and is in
all respects confirmed and preserved.
SECTION 3.2. Governing Law. This Supplemental Indenture shall be
governed by and construed in accordance with the laws of the State of Georgia.
This Supplemental Indenture is subject to the provisions of the Trust Indenture
Act of 1939, as amended and shall, to the extent applicable, be governed by
such provisions.
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SECTION 3.3. Counterparts. This Supplemental Indenture may be executed
in any number of counterparts, each of which so executed shall be deemed to be
an original, but all such counterparts shall together constitute but one and
the same instrument.
SECTION 3.4. Notices. Any notice required or permitted hereunder or
under the Indenture to be given or made to the Guarantor shall be given or made
in writing and mailed, first class postage prepaid, to the Guarantor at the
address set forth below its signature hereon, or at any other address
previously furnished in writing to the Trustee and the Company by the
Guarantor, with a copy to the Company given or made in accordance with Section
105 of the Indenture.
SECTION 3.5. Successors and Assigns. The Guaranty shall be binding
upon the Guarantor, its successors and assigns and inure to the benefit of the
successors and assigns of the Trustee and the Holders.
SECTION 3.6. Time of the Essence. Time is of the essence with regard
to the Guarantor's performance of its obligations hereunder.
SECTION 3.7. Rights of Holders Limited. Notwithstanding anything
herein to the contrary, the rights of Holders with respect to this Supplemental
Indenture and the Guaranty shall be limited in the manner and to the extent the
rights of Holders are limited under the Indenture with respect to the Indenture
and the Securities.
[Signatures on Next Page]
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed by their respective officers hereunto duly
authorized, all as of the day and year first written above.
IRT PROPERTY COMPANY, as Issuer
By:
--------------------------------------------
Name: James G. Levy
Title: Senior Vice President
IRT PARTNERS L.P., as a Guarantor
By: IRT Property Company, its general partner
By:
--------------------------------------
Name: James G. Levy
Title: Senior Vice President
IRT MANAGEMENT COMPANY, as a
Guarantor
By:
--------------------------------------------
Name: James G. Levy
Title: Treasurer
IRT ALABAMA, INC., as a
Guarantor
By:
--------------------------------------------
Name: James G. Levy
Title: Treasurer
[Signatures Continued on Next Page]
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[Signatures Page to Supplemental Indenture No. 2]
IRT CAPITAL CORPORATION II, as a
Guarantor
By:
--------------------------------------------
Name: Thomas H. McAuley
Title: President
Address for all Guarantors:
c/o IRT Property Company
200 Galleria Parkway, Suite 1400
Atlanta, Georgia 30339
Attention: Chief Financial Officer
SUNTRUST BANK, ATLANTA, as Trustee
By:
--------------------------------------------
Name:
Title:
By:
--------------------------------------------
Name:
Title:
11
<PAGE> 1
EXHIBIT 4.7
IRT PROPERTY COMPANY
Issuer
and
EACH OF THE GUARANTORS A PARTY HERETO
the Guarantors
to
SUNTRUST BANK, ATLANTA
Trustee
Supplemental Indenture No. 4
Dated as of November [1], 1999
GUARANTEE OF SENIOR DEBT SECURITIES
SUPPLEMENTAL INDENTURE NO. 4, dated as of November 1, 1999 (this
"Supplemental Indenture"), among IRT PROPERTY COMPANY, a corporation duly
organized and existing under the laws of the State of Georgia (the "Company"),
IRT CAPITAL CORPORATION II, a Georgia corporation, IRT PARTNERS L.P., a Georgia
limited partnership, IRT MANAGEMENT COMPANY, a Georgia corporation and IRT
ALABAMA, INC., an Alabama corporation (each individually a "Guarantor," and
collectively, the "Guarantors" which term shall include each entity which
becomes a Guarantor pursuant to Paragraph 2.13 hereof) and SUNTRUST BANK,
ATLANTA, a Georgia banking corporation duly organized and existing under the
laws of the State of Georgia, as Trustee (the "Trustee").
RECITALS
WHEREAS, the Company and the Trustee have heretofore entered into an
Indenture dated as of November 9, 1995 (as amended, supplemented or otherwise
modified through the date hereof, the "Indenture"), a form of which has been
filed with the Securities and Exchange Commission under the Securities Act of
1933, as amended, as an exhibit to the Company's Registration Statement on Form
S-3 (Registration No. 33-63523), providing for the issuance from time to time
of senior debt securities of the Company (the "Securities");
<PAGE> 2
WHEREAS, the Company has caused each Guarantor to provide a guaranty
of the obligations of the Company under certain of its Existing Senior
Indebtedness;
WHEREAS, the Guarantors are required pursuant to the Indenture to
provide the guaranty herein set forth (the "Guaranty") of the Obligations (as
defined herein);
WHEREAS, IRT Partners L.P. (the "Existing Guarantor") has previously
provided a guaranty of the Obligations pursuant to that certain Supplemental
Indenture No. 3 dated as of September 9, 1998, among the Company, the Existing
Guarantor and the Trustee and intends to amend and restate such guaranty in its
entirety herein;
WHEREAS, Sections 901(6) and 901(9) of the Indenture permit the
Company and the Trustee to enter into indentures supplemental thereto without
the consent of any Holder of Securities to make any change to the Indenture,
provided that such change does not adversely affect the interests of the
Holders of Securities of any series or any related coupons in any material
respect;
WHEREAS, each Guarantor has determined that its execution, delivery
and performance of this Supplemental Indenture directly benefit, and are within
the corporate or partnership purposes, as applicable, and best interests of,
such Guarantor;
WHEREAS, the Board of Directors of each Guarantor and the Company has
duly adopted resolutions authorizing such Guarantor or the Company, as
applicable to execute and deliver this Supplemental Indenture and the Board of
Directors of the Guarantor's general partner has duly adopted resolutions
authorizing the Guarantor to execute and deliver this Supplemental Indenture;
and
WHEREAS, all other conditions and requirements necessary to make this
Supplemental Indenture, when duly executed and delivered, a valid and binding
agreement in accordance with its terms and for the purposes herein expressed,
have been performed and fulfilled.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
each Guarantor hereby unconditionally guarantees to the Trustee and the Holders
full and prompt payment and performance when due, whether at maturity, by
acceleration or otherwise, of all Obligations. Each Obligation shall rank pari
passu with each other Obligation.
ARTICLE ONE
DEFINITIONS
SECTION 1.1. Definitions. For all purposes of this Supplemental
Indenture, except as otherwise expressly provided for or unless the context
otherwise requires:
(a) capitalized terms used but not defined herein shall have
the respective meanings assigned to them in the Indenture; and
(b) all references herein to Articles and Sections refer to
the corresponding
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Articles and Sections of this Supplemental Indenture. As used herein,
"Obligations" means (a) all payment and performance obligations of the Company
(i) under the Indenture with respect to the Securities, (ii) under the
Securities and (iii) as a result of the issuance of the Securities and (b) the
obligation to pay an amount equal to the amount of any and all damages which
the Trustee and the Holders, or any of them, may suffer by reason of a breach
by either the Company or any other obligor of any obligation, covenant or
undertaking under (i) the Indenture with respect to the Securities or (ii) the
Securities.
ARTICLE TWO
GUARANTY
SECTION 2.1. Obligations Several. Regardless of whether any other
Guarantor, proposed guarantor or any other Person or Persons is, are or shall
become in any other way responsible to the Trustee and the Holders, or any of
them, for or in respect of the Obligations or any part thereof, and regardless
of whether or not any Person or Persons now or hereafter responsible to the
Trustee and the Holders, or any of them, for the Obligations or any part
thereof, whether under this Guaranty or otherwise, shall cease to be so liable,
each Guarantor hereby declares and agrees that this Guaranty is and shall
continue to be a several obligation (as well as a joint one), shall be a
continuing guaranty and shall be operative and binding. Each Guarantor hereby
agrees that it will not exercise any rights which it may acquire by way of
subrogation under this Guaranty, by any payment made hereunder or otherwise,
unless and until all of the Obligations shall have been paid in full. If any
amount shall be paid to any Guarantor on account of such subrogation rights at
any time when all of the Obligations shall not have been paid in full, such
amount shall be held in trust for the benefit of the Trustee and the Holders
and shall forthwith be paid to the Trustee to be credited and applied upon the
Obligations, whether matured or unmatured, in accordance with the terms of the
Indenture, but subject to the provisions of Section 2.7 hereof.
SECTION 2.2. Guaranty Final. Upon the execution and delivery of this
Guaranty to the Trustee, this Guaranty shall be deemed to be finally executed
and delivered by each Guarantor and shall not be subject to or affected by any
promise or condition affecting or limiting such Guarantor's liability, and no
statement, representation, agreement or promise on the part or the Trustee, the
Holders, the Company, or any of them, or any officer, employee or agent
thereof, unless contained herein forms any part of this Guaranty or has induced
the making hereof or shall be deemed in any way to affect such Guarantor's
liability hereunder. The Guarantors' obligations hereunder shall remain in full
force and effect until all Obligations shall have been paid in full.
SECTION 2.3. Amendment and Waiver. No alteration or waiver of this
Supplemental Indenture or of any of its terms, provisions or conditions shall
be binding upon the parties against whom enforcement is sought unless made in
writing and signed by an authorized officer of such party or its general
partner, as applicable.
SECTION 2.4. Dealings With the Company. The Trustee and the Holders,
or any of them, may, from time to time, without exonerating or releasing any
Guarantor in any way under this Guaranty, (i) take such further or other
security or securities for the Obligations or any part thereof as the Trustee
and the Holders, or any of them, may deem proper, consistent with the
Indenture, or (ii) release, discharge, abandon or otherwise deal with or fail
to deal with any Guarantor or other guarantor or obligor of the Obligations or
any security or securities therefor or
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any part thereof now or hereafter held by the Trustee and the Holders, or any
of them, or (iii) consistent with the Indenture, amend, modify, extend,
accelerate or waive in any manner any of the provisions, terms, or conditions
of the Indenture or the Securities, all as the Trustee or the Holders, or any
of them, may consider expedient or appropriate in their sole discretion.
Without limiting the generality of the foregoing, or of Section 2.5 hereof, it
is understood that the Trustee and the Holders, or any of them, may, without
exonerating or releasing any Guarantor, give up, or modify or abstain from
perfecting or taking advantage of any security for the Obligations and accept
or make any compositions or arrangements, and realize upon any security for the
Obligations when, and in such manner, as the Trustee and the Holders, or any of
them, may deem expedient, consistent with the Indenture, all without notice to
any Guarantor.
SECTION 2.5. Guaranty Unconditional. Each Guarantor acknowledges and
agrees that no change in the nature or terms of the Obligations or any of the
Indenture or the Securities, or other agreements, instruments or contracts
evidencing, related to or attendant with the Obligations (including any
novation), nor any determination of lack of enforceability thereof, shall
discharge all or any part of the liabilities and obligations of such Guarantor
pursuant to this Guaranty; it being the purpose and intent of the Guarantors,
the Trustee and the Holders that the covenants, agreements and all liabilities
and obligations of the Guarantors hereunder are absolute, unconditional and
irrevocable under any and all circumstances. Without limiting the generality of
the foregoing, each Guarantor agrees that until each and every one of the
covenants and agreements of this Guaranty is fully performed, such Guarantor's
undertakings hereunder shall not be released, in whole or in part, by any
action or thing which might, but for this paragraph of this Guaranty, be deemed
a legal or equitable discharge of a Guarantor or surety or guarantor, or by
reason of any waiver, omission of the Trustee or the Holders, or any of them,
or their failure to proceed promptly or otherwise, or by reason of any action
taken or omitted by the Trustee or the Holders, or any of them, whether or not
such action or failure to act varies or increases the risk of, or affects the
rights or remedies of, such Guarantor or by reason of any further dealings
between the Company, the Trustee, and the Holders, or any of them, or any other
Guarantor or guarantor or surety, and each Guarantor hereby expressly waives
and surrenders any defense to its liability hereunder, or any right of
counterclaim or offset of any nature or description which it may have or which
may exist based upon, and shall be deemed to have consented to, any of the
foregoing acts, omissions, things, agreements or waivers.
SECTION 2.6. Bankruptcy. Each Guarantor agrees that upon the
bankruptcy or winding up or other distribution of assets of the Company or any
Subsidiary of the Company (other than such Guarantor) or of any other Guarantor
or surety or guarantor for the Obligations, the rights of the Trustee and the
Holders, or any of them, against such Guarantor shall not be affected or
impaired by the omission of the Trustee or the Holders, or any of them, to
prove its or their claim, as appropriate, or to prove its or their full claim,
as appropriate, and the Trustee and the Holders may prove such claims as they
see fit and may refrain from proving any claim and in their respective
discretion they may value as they see fit or refrain from valuing any security
held by the Trustee and the Holders, or any of them, without in any way
releasing, reducing or otherwise affecting the liability to the Trustee and the
Holders of such Guarantor. If acceleration of the time for payment of any
amount payable by the Company under the Indenture or the Securities is stayed
upon the insolvency, bankruptcy or reorganization of the Company, all such
amounts otherwise subject to acceleration under the terms of the Indenture or
the Securities shall nonetheless be payable by each Guarantor hereunder
forthwith on demand by the Trustee made at the request of the Holders. If at
any time any payment of the principal of or interest on any
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Security or any other amount payable by the Company under the Indenture is
rescinded or must be otherwise restored or returned upon the insolvency,
bankruptcy or reorganization of the Company, any other Guarantor or otherwise,
the Guarantors' obligations hereunder with respect to such payment shall be
reinstated as though such payment had been due but not made at such time.
SECTION 2.7. Application of Payments. The Trustee hereby acknowledges
and agrees, and each Holder shall be deemed to hereby acknowledge and agree,
that to the extent any of the Existing Senior Obligations (as defined below) is
then in default, any funds, payments, claims or distributions (the "Guaranty
Proceeds") actually received hereunder shall be made available for distribution
equally and ratably (based on the principal amounts then outstanding) among (a)
the holders of the Obligations and (b) the holders of the Existing Senior
Obligations. For purposes hereof, "Existing Senior Obligations" shall mean Debt
for borrowed money owed or guaranteed in connection with any unsecured and
non-subordinated Debt for borrowed money of the Company or the Guarantor (a)
issued in offerings registered under the Securities Act of 1933 or in
placements exempt from registration pursuant to Rule 144A or Regulation S
thereunder, or (b) otherwise incurred, which is, in either case, outstanding on
the date hereof or incurred hereafter in accordance with the Indenture
(including, without limitation, the Debt of the Company incurred in connection
with (i) the Credit Agreement dated as of the date hereof, as amended or
supplemented from time to time, among the Company, Wachovia Bank, N.A., as
Agent and as a Bank, and certain other Banks parties thereto from time to time
and (ii) the Revolving Loan Credit Agreement dated as of the date hereof, as
amended or supplemented from time to time, between the Company and Wachovia
Bank, N.A.). This Section 2.7 shall not apply to any payments, funds, claims or
distributions received by the Trustee or any Holder directly or indirectly from
the Company or any other Person other than from the Guarantors hereunder. Each
Guarantor acknowledges and agrees with the Trustee and each Holder as follows:
(a) to the extent any Guaranty Proceeds are distributed to
the holders of the Existing Senior Obligations, the Obligations shall not be
deemed reduced by any such distribution, and such Guarantor will continue to
make payments pursuant to the Guaranty until such time as the Obligations have
been paid in full after taking into effect any distributions of Guaranty
Proceeds to the holders of Existing Senior Obligations;
(b) nothing contained herein shall be deemed to limit, modify
or alter the rights of the Trustee and the Holders or be deemed to subordinate
the Obligations to the Existing Senior Obligations, nor give to any holder of
Existing Senior Obligations any rights of subrogation;
(c) nothing contained herein shall be deemed to be for the
benefit of any holders of Existing Senior Obligations nor shall anything be
construed to impose on the Trustee or any Holder any fiduciary duties,
obligations or responsibilities to the holders of the Existing Senior
Obligations; and
(d) the Guaranty is for the sole benefit of the Trustee and
the Holders and their respective successors and assigns, and any amounts
received by the Trustee and the Holders, or any of them, from whatsoever source
and applied toward the payment of the Obligations shall be applied in such
order of application as is set forth in the Indenture, if any.
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SECTION 2.8. Waivers by Guarantor. Each Guarantor hereby expressly
waives: (a) notice of acceptance of this Guaranty, (b) notice of the existence
or creation of all or any of the Obligations, (c) presentment, demand, notice
of dishonor, protest, and all other notices whatsoever, (d) all diligence in
collection or protection of or realization upon the Obligations or any part
thereof, any obligation hereunder, or any security for any of the foregoing and
(e) all rights of subrogation, indemnification, contribution and reimbursement
against the Company, all rights to enforce any remedy the Trustee and the
Holders, or any of them, may have against the Company and any benefit of, or
right to participate in, any collateral or security now or hereinafter held by
the Trustee and the Holders, or any of them, in respect of the Obligations,
even upon payment in full of the Obligations. Any money received by any
Guarantor in violation of this Section shall be held in trust by such Guarantor
for the benefit of the Trustee and the Holders. If a claim is ever made upon
the Trustee and the Holders, or any of them, for the repayment or recovery of
any amount or amounts received by any of them in payment of any of the
Obligations and such Person repays all or part of such amount by reason of (a)
any judgment, decree, or order of any court or administrative body having
jurisdiction over such Person or any of its property, or (b) any good faith
settlement or compromise of any such claim effected by such Person with any
such claimant, including the Company, then in such event such Guarantor agrees
that any such judgment, decree, order, settlement, or compromise shall be
binding upon such Guarantor, notwithstanding any revocation hereof or the
cancellation of any promissory note or other instrument evidencing any of the
Obligations, and such Guarantor shall be and remain obligated to such Person
hereunder for the amount so repaid or recovered to the same extent as if such
amount had never originally been received by such Person.
SECTION 2.9. Remedies Cumulative. No delay by the Trustee and the
Holders, or any of them, in the exercise of any right or remedy shall operate
as a waiver thereof, and no single or partial exercise by the Trustee and the
Holders, or any of them, of any right or remedy shall preclude other or further
exercise thereof or the exercise of any other right or remedy. No action by the
Trustee and the Holders, or any of them, permitted hereunder shall in any way
impair or affect the Guaranty. For the purpose of the Guaranty, the Obligations
shall include, without limitation, all Obligations of the Company to the
Trustee and the Holders, notwithstanding any right or power of any third party,
individually or in the name of the Company or any other Person, to assert any
claim or defense as to the invalidity or unenforceability of any such
Obligation, and no such claim or defense shall impair or affect the obligations
of the Guarantor hereunder.
SECTION 2.10. Miscellaneous. The Guaranty is a guaranty of payment and
not of collection. In the event of a demand upon the Guarantor under the
Guaranty, the Guarantor shall be held and bound to the Trustee and the Holders
directly as debtor in respect of the payment of the amounts hereby guaranteed.
All reasonable costs and expenses, including attorneys' fees and expenses,
incurred by the Trustee and the Holders, or any of them, in obtaining
performance of or collecting payments due under the Guaranty shall be deemed
part of the Obligations guaranteed hereby. The provisions of the Guaranty are
for the benefit of the Trustee and the Holders and may not be relied upon or
enforced by any other Person without the express written consent of the Trustee
and, as to enforcement, may only be enforced in accordance with this
Supplemental Indenture and the Indenture.
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SECTION 2.11. Benefit to Guarantor. The Guarantor expressly represents
and acknowledges that the issuance and sale of the Securities under the
Indenture has been, and will be, of direct interest, benefit and advantage to
the Guarantor.
SECTION 2.12. Solvency. The Guarantor expressly represents and
warrants that as of the date hereof and after giving effect to the transactions
contemplated by the Indenture (a) the capital of the Guarantor will not be
unreasonably small to conduct its business; (b) the Guarantor will not have
incurred debts, or have intended to incur debts, beyond its ability to pay such
debts as they mature; and (c) the present fair salable value of the assets of
the Guarantor is greater than the amount that will be required to pay its
probable liabilities (including debts) as they become absolute and matured. For
purposes of this Section 2.12, "debt" means any liability on a claim, and
"claim" means (x) the right to payment, whether or not such right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
undisputed, legal, equitable, secured or unsecured, or (y) the right to an
equitable remedy for breach of performance if such breach gives rise to a right
to payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, undisputed, secured or
unsecured.
SECTION 2.13. Additional Guarantors; Release of Guarantors. Any
Subsidiary of the Company or any other entity may become a party to this
Guaranty by executing and delivering a Supplemental Indenture providing for a
guaranty of the Obligations under the terms of this Article 2. Under certain
circumstances, a Guarantor may be released by the Trustee of its obligations
under this Guaranty. Each other Guarantor consents and agrees to any such
releases and agrees that no such release shall affect its obligations
hereunder, except as to the Guarantor so released.
SECTION 2.14 Contribution Agreement. To the extent that any Guarantor
shall, under the Guaranty, make a payment (a "Guarantor Payment") of a portion
of the Obligations, then, without limiting its rights of subrogation against
the Company, such Guarantor shall be entitled to contribution and
indemnification from, and be reimbursed by, each of the other Guarantors and
the Company (each of the foregoing referred to herein individually as a
"Contributing Party" and collectively as the "Contributing Parties") in an
amount, for each such Contributing Party, equal to a fraction of such Guarantor
Payment, the numerator of which fraction is such Contributing Party's Allocable
Amount and the denominator of which is the sum of the Allocable Amounts of all
of the Contributing Parties.
As of any date of determination, the "Allocable Amount" of each
Contributing Party shall be equal to the maximum amount of liability which
could be asserted against such Contributing Party hereunder with respect to the
applicable Guarantor Payment without (i) rendering such Contributing Party
"insolvent" within the meaning of Section 101(31) of the Federal Bankruptcy
Code (the "Bankruptcy Code") or Section 2 of either the Uniform Fraudulent
Transfer Act (the "UFTA") or the Uniform Fraudulent Conveyance Act (the
"UFCA"), (ii) leaving such Contributing Party with unreasonably small capital,
within the meaning of Section 548 of the Bankruptcy Code or Section 4 of the
UFTA or Section 5 of the UFCA, or (iii) leaving such Contributing Party unable
to pay its debts as they become due within the meaning of Section 548 of the
Bankruptcy Code or Section 4 of the UFTA or Section 6 of the UFCA.
This Section 2.14 is intended only to define the relative rights of
the Contributing Parties, and nothing set forth in this Agreement is intended
to or shall impair the obligations of the
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Guarantors, jointly and severally, to pay any amounts, as and when the same
shall become due and payable in accordance with the terms of the Guaranty.
The parties hereto acknowledge that the rights of contribution and
indemnification hereunder shall constitute assets in favor of each Guarantor to
which such contribution and indemnification is owing.
This Section 2.14 shall continue in full force and effect and may not
be terminated or otherwise revoked by any Contributing Party until all of the
Guaranteed Obligations shall have been indefeasibly paid in full (in lawful
money of the United States of America) and discharged and the Indenture and
Securities shall have been terminated. Each Contributing Party agrees that if,
notwithstanding the foregoing, such Contributing Party shall have any right
under applicable law to terminate or revoke this Agreement, and such
Contributing Party shall attempt to exercise such right, then such termination
or revocation shall not be effective until a written notice of such revocation
or termination, specifically referring hereto and signed by such Contributing
Party, is actually received by each of the other Contributing Parties and by
the Trustee at its notice address set forth in the Indenture. Such notice shall
not affect the right or power of any Contributing Party to enforce rights
arising prior to receipt of such written notice by each of the other
Contributing Parties and the Trustee.
Section 2.15. NO NOVATION. THE PARTIES HERETO HAVE ENTERED INTO THIS
GUARANTY SOLELY TO AMEND AND RESTATE THE TERMS OF THE GUARANTY CONTAINED IN
THAT CERTAIN SUPPLEMENTAL INDENTURE NO. 3, DATED AS OF SEPTEMBER 10, 1998,
AMONG THE COMPANY, THE TRUSTEE AND IRT PARTNERS, L.P. (THE "EXISTING
GUARANTY"). THE PARTIES DO NOT INTEND THIS SUPPLEMENTAL INDENTURE, NOR THE
TRANSACTIONS CONTEMPLATED HEREBY, TO BE, AND THIS SUPPLEMENTAL INDENTURE AND
THE TRANSACTIONS CONTEMPLATED HEREBY SHALL NOT BE CONSTRUED TO BE, A NOVATION
OR WAIVER OF ANY OF THE OBLIGATIONS OWING BY THE EXISTING GUARANTOR UNDER OR IN
CONNECTION WITH THE EXISTING GUARANTY.
ARTICLE THREE
MISCELLANEOUS PROVISIONS
SECTION 3.1. Ratification of Indenture. Except as expressly modified
or amended hereby, the Indenture continues in full force and effect and is in
all respects confirmed and preserved.
SECTION 3.2. Governing Law. This Supplemental Indenture shall be
governed by and construed in accordance with the laws of the State of Georgia.
This Supplemental Indenture is subject to the provisions of the Trust Indenture
Act of 1939, as amended and shall, to the extent applicable, be governed by
such provisions.
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SECTION 3.3. Counterparts. This Supplemental Indenture may be executed
in any number of counterparts, each of which so executed shall be deemed to be
an original, but all such counterparts shall together constitute but one and
the same instrument.
SECTION 3.4. Notices. Any notice required or permitted hereunder or
under the Indenture to be given or made to the Guarantor shall be given or made
in writing and mailed, first class postage prepaid, to the Guarantor at the
address set forth below its signature hereon, or at any other address
previously furnished in writing to the Trustee and the Company by the
Guarantor, with a copy to the Company given or made in accordance with Section
105 of the Indenture.
SECTION 3.5. Successors and Assigns. The Guaranty shall be binding
upon the Guarantor, its successors and assigns and inure to the benefit of the
successors and assigns of the Trustee and the Holders.
SECTION 3.6. Time of the Essence. Time is of the essence with regard
to the Guarantor's performance of its obligations hereunder.
SECTION 3.7. Rights of Holders Limited. Notwithstanding anything
herein to the contrary, the rights of Holders with respect to this Supplemental
Indenture and the Guaranty shall be limited in the manner and to the extent the
rights of Holders are limited under the Indenture with respect to the Indenture
and the Securities.
[Signatures on Next Page]
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed by their respective officers hereunto duly
authorized, all as of the day and year first written above.
IRT PROPERTY COMPANY, as Issuer
By:
------------------------------------------
Name: James G. Levy
Title: Senior Vice President
IRT PARTNERS L.P., as a Guarantor
By: IRT Property Company, its general partner
By:
--------------------------------------
Name: James G. Levy
Title: Senior Vice President
IRT MANAGEMENT COMPANY, as a
Guarantor
By:
------------------------------------------
Name: James G. Levy
Title: Treasurer
IRT ALABAMA, INC., as a
Guarantor
By:
------------------------------------------
Name: James G. Levy
Title: Treasurer
[Signatures Continued on Next Page]
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[Signatures Page to Supplemental Indenture No. 4]
IRT CAPITAL CORPORATION II, as a
Guarantor
By:
------------------------------------------
Name: Thomas H. McAuley
Title: President
Address for all Guarantors:
c/o IRT Property Company
200 Galleria Parkway, Suite 1400
Atlanta, Georgia 30339
Attention: Chief Financial Officer
SUNTRUST BANK, ATLANTA, as Trustee
By:
------------------------------------------
Name:
Title:
By:
------------------------------------------
Name:
Title:
11
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EXHIBIT 10.12
$100,000,000
CREDIT AGREEMENT
DATED AS OF
NOVEMBER 1, 1999
AMONG
IRT PROPERTY COMPANY
THE BANKS LISTED HEREIN
AND
WACHOVIA BANK, N.A.,
AS ADMINISTRATIVE AGENT
FIRST UNION NATIONAL BANK,
AS SYNDICATION AGENT
AND
WACHOVIA SECURITIES, INC., AS ARRANGER
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TABLE OF CONTENTS
CREDIT AGREEMENT
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ARTICLE I. DEFINITIONS..........................................................................1
SECTION 1.01. DEFINITIONS..............................................................................1
SECTION 1.02. ACCOUNTING TERMS AND DETERMINATIONS.....................................................18
SECTION 1.03. REFERENCES..............................................................................19
SECTION 1.04. USE OF DEFINED TERMS....................................................................19
SECTION 1.05. TERMINOLOGY.............................................................................19
ARTICLE II. THE CREDITS........................................................................19
SECTION 2.01. COMMITMENTS TO LEND SYNDICATED LOANS....................................................19
SECTION 2.02. METHOD OF BORROWING SYNDICATED LOANS....................................................20
SECTION 2.03. MONEY MARKET LOANS......................................................................22
SECTION 2.04. CONTINUATION AND CONVERSION ELECTIONS...................................................25
SECTION 2.05. NOTES...................................................................................26
SECTION 2.06. MATURITY OF LOANS.......................................................................26
SECTION 2.07. INTEREST RATES..........................................................................27
SECTION 2.08. FEES....................................................................................30
SECTION 2.09. OPTIONAL TERMINATION OR REDUCTION OF COMMITMENTS........................................30
SECTION 2.10. MANDATORY REDUCTION AND TERMINATION OF COMMITMENTS......................................30
SECTION 2.11. OPTIONAL PREPAYMENTS....................................................................31
SECTION 2.12. MANDATORY PREPAYMENTS...................................................................31
SECTION 2.13. GENERAL PROVISIONS AS TO PAYMENTS.......................................................31
SECTION 2.14. COMPUTATION OF INTEREST AND FEES........................................................33
ARTICLE III. CONDITIONS TO BORROWINGS..........................................................33
SECTION 3.01. CONDITIONS TO FIRST BORROWING...........................................................33
SECTION 3.02. CONDITIONS TO ALL BORROWINGS............................................................35
ARTICLE IV. REPRESENTATIONS AND WARRANTIES.....................................................36
SECTION 4.01. CORPORATE EXISTENCE AND POWER...........................................................36
SECTION 4.02. CORPORATE AND GOVERNMENTAL AUTHORIZATION; NO CONTRAVENTION..............................36
SECTION 4.03. BINDING EFFECT..........................................................................36
SECTION 4.04. FINANCIAL INFORMATION...................................................................37
SECTION 4.05. NO LITIGATION...........................................................................37
SECTION 4.06. COMPLIANCE WITH ERISA...................................................................37
SECTION 4.07. COMPLIANCE WITH LAWS; PAYMENT OF TAXES..................................................37
SECTION 4.08. SUBSIDIARIES............................................................................38
SECTION 4.09. INVESTMENT COMPANY ACT..................................................................38
SECTION 4.10. PUBLIC UTILITY HOLDING COMPANY ACT......................................................38
SECTION 4.11. OWNERSHIP OF PROPERTY; LIENS............................................................38
SECTION 4.12. NO DEFAULT..............................................................................38
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SECTION 4.13. FULL DISCLOSURE.........................................................................38
SECTION 4.14. ENVIRONMENTAL MATTERS...................................................................39
SECTION 4.15. CAPITAL STOCK...........................................................................39
SECTION 4.16. MARGIN STOCK............................................................................39
SECTION 4.17. INSOLVENCY..............................................................................40
SECTION 4.18. INSURANCE...............................................................................40
SECTION 4.19. Y2K PLAN................................................................................40
SECTION 4.20. REAL ESTATE INVESTMENT TRUST............................................................40
ARTICLE V. COVENANTS...........................................................................41
SECTION 5.01. INFORMATION.............................................................................41
SECTION 5.02. INSPECTION OF PROPERTY, BOOKS AND RECORDS...............................................43
SECTION 5.03. MAINTENANCE OF EXISTENCE................................................................43
SECTION 5.04. DISSOLUTION.............................................................................43
SECTION 5.05. CONSOLIDATIONS, MERGERS AND SALES OF ASSETS.............................................43
SECTION 5.06. USE OF PROCEEDS.........................................................................44
SECTION 5.07. COMPLIANCE WITH LAWS; PAYMENT OF TAXES..................................................44
SECTION 5.08. INSURANCE...............................................................................45
SECTION 5.09. CHANGE IN FISCAL YEAR...................................................................45
SECTION 5.10. MAINTENANCE OF PROPERTY.................................................................45
SECTION 5.11. ENVIRONMENTAL NOTICES...................................................................45
SECTION 5.12. ENVIRONMENTAL MATTERS...................................................................45
SECTION 5.13. ENVIRONMENTAL RELEASE...................................................................45
SECTION 5.14. TRANSACTIONS WITH AFFILIATES............................................................45
SECTION 5.15. RESTRICTED PAYMENTS.....................................................................46
SECTION 5.16. INVESTMENTS.............................................................................46
SECTION 5.17. LIENS...................................................................................46
SECTION 5.18. RESTRICTIONS ON ABILITY OF SUBSIDIARIES TO PAY DIVIDENDS................................47
SECTION 5.19. ADDITIONAL DEBT.........................................................................47
SECTION 5.20. RATIO OF CONSOLIDATED TOTAL LIABILITIES TO CONSOLIDATED TOTAL ASSET VALUE...............48
SECTION 5.21. RATIO OF CONSOLIDATED TOTAL SECURED DEBT TO CONSOLIDATED TOTAL ASSET VALUE..............48
SECTION 5.22. RATIO OF CONSOLIDATED EBITDA TO CONSOLIDATED INTEREST EXPENSE...........................48
SECTION 5.23. RATIO OF CONSOLIDATED UNENCUMBERED REAL ESTATE ASSETS TO CONSOLIDATED UNSECURED
SENIOR DEBT.............................................................................48
SECTION 5.24. RATIO OF CONSOLIDATED UNENCUMBERED NET OPERATING INCOME TO CONSOLIDATED
UNSECURED INTEREST EXPENSE..............................................................48
SECTION 5.25. RATIO OF CONSOLIDATED EBITDA TO CONSOLIDATED FIXED CHARGES..............................48
SECTION 5.26. Y2K COMPLIANCE..........................................................................48
SECTION 5.27. SIGNIFICANT SUBSIDIARIES TO BE GUARANTORS; ELECTION TO BECOME GUARANTOR.................49
SECTION 5.28. TOP LEVEL REORGANIZATION................................................................49
ARTICLE VI. DEFAULTS...........................................................................50
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SECTION 6.01. EVENTS OF DEFAULT.......................................................................50
SECTION 6.02. NOTICE OF DEFAULT.......................................................................53
ARTICLE VII. THE ADMINISTRATIVE AGENT..........................................................53
SECTION 7.01. APPOINTMENT; POWERS AND IMMUNITIES......................................................53
SECTION 7.02. RELIANCE BY ADMINISTRATIVE AGENT........................................................54
SECTION 7.03. DEFAULTS................................................................................54
SECTION 7.04. RIGHTS OF ADMINISTRATIVE AGENT AND ITS AFFILIATES AS A BANK.............................54
SECTION 7.05. INDEMNIFICATION.........................................................................55
SECTION 7.06. CONSEQUENTIAL DAMAGES...................................................................55
SECTION 7.07. PAYEE OF NOTE TREATED AS OWNER..........................................................55
SECTION 7.08. NONRELIANCE ON ADMINISTRATIVE AGENT AND OTHER BANKS.....................................55
SECTION 7.09. FAILURE TO ACT..........................................................................56
SECTION 7.10. RESIGNATION OR REMOVAL OF ADMINISTRATIVE AGENT..........................................56
SECTION 7.11. SYNDICATION AGENT.......................................................................57
ARTICLE VIII. CHANGE IN CIRCUMSTANCES; COMPENSATION............................................57
SECTION 8.01. BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR UNFAIR................................57
SECTION 8.02. ILLEGALITY..............................................................................57
SECTION 8.03. INCREASED COST AND REDUCED RETURN.......................................................58
SECTION 8.04. BASE RATE LOANS OR OTHER FIXED RATE LOANS SUBSTITUTED FOR AFFECTED FIXED RATE
LOANS...................................................................................59
SECTION 8.05. COMPENSATION............................................................................59
SECTION 8.06. REPLACEMENT OF BANKS....................................................................60
ARTICLE IX. MISCELLANEOUS......................................................................60
SECTION 9.01. NOTICES.................................................................................60
SECTION 9.02. NO WAIVERS..............................................................................61
SECTION 9.03. EXPENSES; DOCUMENTARY TAXES.............................................................61
SECTION 9.04. INDEMNIFICATION.........................................................................61
SECTION 9.05. SETOFF; SHARING OF SETOFFS..............................................................62
SECTION 9.06. AMENDMENTS AND WAIVERS..................................................................63
SECTION 9.07. NO MARGIN STOCK COLLATERAL..............................................................64
SECTION 9.08. SUCCESSORS AND ASSIGNS..................................................................64
SECTION 9.09. CONFIDENTIALITY.........................................................................67
SECTION 9.10. REPRESENTATION BY BANKS.................................................................67
SECTION 9.11. OBLIGATIONS SEVERAL.....................................................................67
SECTION 9.12. GEORGIA LAW.............................................................................67
SECTION 9.13. SEVERABILITY............................................................................68
SECTION 9.14. INTEREST................................................................................68
SECTION 9.15. INTERPRETATION..........................................................................69
SECTION 9.16. WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION...........................................69
SECTION 9.17. COUNTERPARTS............................................................................69
SECTION 9.18. SOURCE OF FUNDS -- ERISA................................................................69
SECTION 9.19. NO BANKRUPTCY PROCEEDINGS...............................................................69
SECTION 9.20. APPROVAL OF GUARANTY PROVISIONS.........................................................70
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EXHIBIT A-1 Form of Syndicated Loan Note
EXHIBIT A-2 Form of Money Market Loan Note
EXHIBIT B Form of Opinion of Counsel for the Borrower and the Guarantors
EXHIBIT C Form of Opinion of Special Counsel for the Administrative Agent
EXHIBIT D Form of Assignment and Acceptance
EXHIBIT E-1 Form of Notice of Borrowing
EXHIBIT E-2 Form of Notice of Continuation or Conversion
EXHIBIT F Form of Compliance Certificate
EXHIBIT G Form of Closing Certificate
EXHIBIT H Form of Officer's Certificate
EXHIBIT I Form of Money Market Quote Request
EXHIBIT J Form of Money Market Quote
EXHIBIT K Form of Designation Agreement
EXHIBIT L Form of Borrowing Base Certificate
EXHIBIT M List of Eligible Properties
EXHIBIT N Form of Guaranty
EXHIBIT O Form of Contribution Agreement
EXHIBIT P Form of Funding Indemnification Letter
EXHIBIT Q Form of Joinder Agreement (Re Top Level Reorganization)
Schedule 4.08 Subsidiaries
Schedule 4.14 Environmental Matters
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CREDIT AGREEMENT
CREDIT AGREEMENT dated as of November 1, 1999 among IRT
PROPERTY COMPANY, the BANKS listed on the signature pages hereof, WACHOVIA BANK,
N.A., as Administrative Agent and FIRST UNION NATIONAL BANK, as Syndication
Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINITIONS.
The terms as defined in this Section 1.01 shall, for all
purposes of this Agreement and any amendment hereto (except as herein otherwise
expressly provided or unless the context otherwise requires), have the meanings
set forth herein:
"Adjusted London Interbank Offered Rate" has the meaning set
forth in Section 2.07(c).
"Administrative Agent" means Wachovia Bank, N.A., a national
banking association organized under the laws of the United States of America, in
its capacity as administrative agent for the Banks hereunder, and its successors
and permitted assigns in such capacity.
"Affiliate" of any relevant Person means (i) any Person that
directly, or indirectly through one or more intermediaries, controls the
relevant Person (a "Controlling Person"), (ii) any Person (other than the
relevant Person or a Subsidiary of the relevant Person) which is controlled by
or is under common control with a Controlling Person, or (iii) any Person (other
than a Subsidiary of the relevant Person) of which the relevant Person owns,
directly or indirectly, 20% or more of the common stock or equivalent equity
interests. As used herein, the term "control" means possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
"Arranger's Letter Agreement" means that certain letter
agreement, dated as of August 23, 1999 between the Borrower and Wachovia
Securities, Inc., as arranger, and Wachovia Bank, N.A., as Administrative Agent,
relating to the structure of the Loans, and certain fees from time to time
payable by the Borrower to Wachovia Securities, Inc., as arranger, and to the
Administrative Agent, together with all amendments and supplements thereto.
"Agreement" means this Credit Agreement, together with all
amendments and supplements hereto.
"Applicable Margin" has the meaning set forth in Section
2.07(a).
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"Assignee" has the meaning set forth in Section 9.08(c).
"Assignment and Acceptance" means an Assignment and Acceptance
executed in accordance with Section 9.08(c) in the form attached hereto as
Exhibit D.
"Authority" has the meaning set forth in Section 8.02.
"Bank" means each bank listed on the signature pages hereof as
having a Commitment, and its successors and assigns and the Designated Banks, if
any; provided, however, that the term "Bank" shall exclude each Designated Bank
when used in reference to a Syndicated Loan, the Commitments or terms relating
to the Syndicated Loans (except as noted above) and the Commitments.
"Base Rate" means for any Base Rate Loan for any day, the rate
per annum equal to the higher as of such day of (i) the Prime Rate, or (ii)
one-half of one percent above the Federal Funds Rate. For purposes of
determining the Base Rate for any day, changes in the Prime Rate or the Federal
Funds Rate shall be effective on the date of each such change.
"Base Rate Loan" means a Loan which bears or is to bear
interest at a rate based upon the Base Rate, and is to be made as a Base Rate
Loan pursuant to the applicable Notice of Borrowing, Notice of Continuation or
Conversion, Section 2.02(f), or Article VIII, as applicable.
"Borrower" means (i) until the consummation of a Top Level
Reorganization and the satisfaction of the Top Level Reorganization Conditions,
IRT PROPERTY COMPANY, a Georgia corporation, and (ii) thereafter, IRT Partners
L.P., and in each case its successors and its permitted assigns.
"Borrower/Parent" means (i) until the consummation of a Top
Level Reorganization and the satisfaction of the Top Level Reorganization
Conditions, IRT Property Company, a Georgia corporation, as the Borrower
hereunder and (ii) thereafter, the Parent, and in each case its successors and
its permitted assigns.
"Borrowing" means a borrowing hereunder consisting of Loans
made to the Borrower (i) at the same time by all of the Banks, in the case of a
Syndicated Borrowing, or (ii) separately by one or more Banks, in the case of a
Money Market Borrowing, in each case pursuant to Article II. A Borrowing is a
"Base Rate Borrowing" if such Loans are Base Rate Loans. A Borrowing is a
Euro-Dollar Borrowing if such Loans are Euro-Dollar Loans. A Borrowing is a
"Money Market Borrowing" if such Loans are made pursuant to Section 2.03 or a
"Syndicated Borrowing" if such Loans are made pursuant to Section 2.01.
"Borrowing Base" means the sum of each of the following, as
determined by reference to the most recent Borrowing Base Certificate furnished
pursuant to Section 3.01(h) or Section 5.01(k), as applicable (and with respect
to any Eligible Property which consists of phases, each phase thereof shall be
separately categorized into clause (i), (ii) or (iii) below, as appropriate, so
long as such phase could be separately financed on a stand-alone basis).
(i) an amount equal to the product of: (x) the
quotient of (1) the Net Operating Income (but for the Non-Wholly Owned
Eligible Property, include only the
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Non-Wholly Owned Eligible Property Percentage thereof) for the 3 month
period ending on the last day of the Fiscal Quarter just ended prior to
the date of determination, from each Eligible Unencumbered Stabilized
Property (excluding percentage rents received during such 3 month
period, but including an amortized value for percentage rents received
during the current Fiscal Year), divided by (2) 0.0975 (which is the
capitalization rate); times (y) 4 (which is the annualization factor);
times (z) 0.60 (which is the advance rate); plus
(ii) an amount equal to the lesser of: (A) the
product of (x) 0.50 (which is the advance rate), times (y) the book
value of Construction in Progress on the last day of the Fiscal Quarter
just ended on all Eligible Properties not subject to a Mortgage and (B)
$20,000,000; plus
(iii) an amount equal to the product of (x) 0.60
(which is the advance rate), times (y) the acquisition cost of all
Eligible Unencumbered Stabilized Property not owned for the entire 3
month period ending on the last day of the Fiscal Quarter just ended
prior to the date of determination.
"Borrowing Base Certificate" means a certificate substantially
in the form of Exhibit L, duly executed by an Executive Officer of the Borrower,
setting forth in reasonable detail the calculations for each component of the
Borrowing Base.
"Capital Stock" means any nonredeemable capital stock of (i)
until the consummation of a Top Level Reorganization and the satisfaction of the
Top Level Reorganization Conditions, the Borrower/Parent or any Consolidated
Subsidiary (to the extent issued to a Person other than the Borrower/Parent),
whether common or preferred and (ii) thereafter, the Parent or any Consolidated
Subsidiary (to the extent issued to a Person other than the Parent), whether
common or preferred.
"CERCLA" means the Comprehensive Environmental Response
Compensation and Liability Act, 42 U.S.C. ss. 9601 et. seq. and its implementing
regulations and amendments.
"CERCLIS" means the Comprehensive Environmental Response
Compensation and Liability Inventory System established pursuant to CERCLA.
"Change of Law" shall have the meaning set forth in Section
8.02.
"Closing Certificate" has the meaning set forth in Section
3.01(e).
"Closing Date" means November 1, 1999.
"Code" means the Internal Revenue Code of 1986, as amended, or
any successor Federal tax code.
"Commitment" means, with respect to each Bank, (i) the amount
set forth opposite the name of such Bank on the signature pages hereof, and
(ii)as to any Bank which enters into any Assignment and Acceptance (whether as
transferor Bank or as Assignee thereunder), the amount of such Bank's Commitment
after giving effect to such Assignment and
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Acceptance, in each case as such amount may be reduced from time to time
pursuant to Sections 2.09 and 2.10.
"Compliance Certificate" has the meaning set forth in Section
5.01(c).
"Consolidated Debt" means at any date the Debt of the
Borrower/Parent and each Consolidated Entity, determined on a consolidated basis
as of such date.
"Consolidated EBITDA" means at any time the sum of the
following, determined on a consolidated basis for the Borrower/Parent and each
Consolidated Entity, at the end of each Fiscal Quarter, for the applicable
measuring period: (i) Consolidated Net Income; plus (ii) Consolidated Interest
Expense; plus (iii) taxes on income; plus (iv) depreciation; plus (v)
amortization; plus (vi) other non-cash charges.
"Consolidated Entity" means at any date the Guarantors and any
other Person the accounts of which, in accordance with GAAP, are consolidated
with those of the Borrower/Parent in its consolidated financial statements as of
such date.
"Consolidated Fixed Charges" means at any time the sum of the
following, determined on a consolidated basis for the Borrower/Parent and each
Consolidated Entity, at the end of each Fiscal Quarter, for the Fiscal Quarter
just ended: (i) Consolidated Interest Expense; plus (ii) all Dividends paid, or
declared but not yet paid, by the Borrower/Parent on preferred stock; plus (iii)
the aggregate amount of scheduled principal amortization paid, as reflected on
the Borrower/Parent's most recent quarterly financial statement submitted to the
Banks, but excluding any principal payments under this Agreement or any other
agreement pertaining to revolving Debt permitted under Section 5.19(iii), and
excluding any balloon, bullet or similar payments on other Debt and (iv)
payments on ground leases.
"Consolidated Intangible Assets" means, with respect to the
Borrower/Parent and its Consolidated Subsidiaries, determined on a consolidated
basis, all assets which would be treated as intangible assets for balance sheet
presentation purposes under GAAP, including without limitation goodwill (whether
representing the excess of cost over book value of assets acquired, or
otherwise), trademarks, tradenames, copyrights, patents and technologies, and
unamortized debt discount and expense.
"Consolidated Interest Expense" for any period means interest,
whether expensed or capitalized, in respect of Debt of the Borrower/Parent and
each Consolidated Entity outstanding during such period.
"Consolidated Net Income" means, for any period, the Net
Income of the Borrower/Parent and each Consolidated Entity determined on a
consolidated basis, but excluding (i) extraordinary items, (ii) gains and losses
on sales of assets, (iii) losses resulting from forgiveness by the
Borrower/Parent or any Consolidated Entity of Debt, (iv) expenses associated
with significant non-recurring events and (v) any equity interests of the
Borrower/Parent or any Subsidiary in the unremitted earnings of any Person that
is not a Subsidiary.
"Consolidated Operating Profits" means, for any period, the
Operating Profits of the Borrower/Parent and each Consolidated Entity.
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"Consolidated Subsidiary" means at any date any Subsidiary or
other entity the accounts of which, in accordance with GAAP, would be
consolidated with those of the Borrower/Parent in its consolidated financial
statements as of such date.
"Consolidated Tangible Assets" means the sum of (i)
Consolidated Total Assets, less (ii) Consolidated Intangible Assets.
"Consolidated Total Assets" means, at any time, the total
assets of the Borrower/Parent and each Consolidated Entity, determined on a
consolidated basis, as set forth or reflected on the most recent consolidated
balance sheet of the Borrower/Parent and each Consolidated Entity, prepared in
accordance with GAAP.
"Consolidated Total Asset Value" means, on a consolidated
basis for the Borrower/Parent and each Consolidated Entity, the sum of:
(i) an amount equal to the product of: (x) the
quotient of (1) the Net Operating Income for the 3 month period ending
on the last day of the Fiscal Quarter just ended prior to the date of
determination (excluding percentage rents received during such 3 month
period, but including an amortized value for percentage rents received
during the current Fiscal Year), from each Property (other than
Property owned by Borrower or any Consolidated Entity for less than
three months) less, divided by (2) 0.0975 (which is the capitalization
rate); times (y) 4 (which is the annualization factor); plus
(ii) an amount equal to the book value of (A)
Construction in Progress plus (B) Properties consisting of unimproved
land, as determined on the last day of the Fiscal Quarter just ended;
plus
(iii) an amount equal to the acquisition cost of
improved Properties owned by Borrower or any Consolidated Entity less
than three months, as determined on the last day of the Fiscal Quarter
just ended; plus
(iv) an amount equal to the sum of all unrestricted
balances on deposit with banks or other financial institutions and all
restricted cash held by a Qualified intermediary on behalf of the
Borrower/Parent or any Guarantor; plus
(v) for any Subsidiary which is not a Wholly Owned
Subsidiary, an amount equal to the book value of the Ownership
Percentage of such Subsidiary, as shown on the Borrower/Parent's
balance sheet; plus
(vi) without duplication, the book value of all
other Consolidated Tangible Assets.
"Consolidated Total Liabilities" means the total liabilities
of the Borrower/Parent and the Consolidated Entities, on a consolidated basis
(including liabilities on account of Dividends, whether paid or declared but not
yet paid), plus the aggregate amount of Debt Guaranteed by the Borrower/Parent,
the Guarantors and the Subsidiaries (other than of Debt of any of them) at the
end of the Borrower/Parent's most recent Fiscal Quarter.
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"Consolidated Total Secured Debt" shall mean all Debt of the
Borrower/Parent and the Consolidated Entities consisting of (i) capitalized
leases, (ii) money borrowed or the deferred purchase price of real property
which is also secured by a Mortgage on any real property owned by the
Borrower/Parent or any Consolidated Entity; and (iii) Guarantees of the
Borrower/Parent or any Consolidated Entity of Debt of any other Person which is
secured by a Mortgage on an asset of the Borrower/Parent or such Consolidated
Entity.
"Consolidated Unencumbered Net Operating Income" means that
portion of Net Operating Income which is attributable to any Property (i) which
is not subject to any Mortgage or (ii) which is owned by any Person whose stock,
partnership interests or other ownership interests are not subject to any pledge
in favor of a third party.
"Consolidated Unencumbered Real Estate Assets" means at any
time, for the Borrower and each Consolidated Entity, determined on a
consolidated basis, the sum (without duplication with respect to any Property)
of the following:
(i) an amount equal to the product of (x) 9.75 (which is
the capitalization rate), times (y) 4 (which is the annualization
factor), times (z) the Net Operating Income for the 3 month period
ending on the last day of the Fiscal Quarter just ended prior to the
date of determination, from each real estate Property not subject to a
Mortgage and owned by the Borrower or any Consolidated Entity for at
least one Fiscal Quarter; plus
(ii) an amount equal to the acquisition cost of improved
Properties not subject to a Mortgage owned by Borrower or any
Consolidated Entity less than three months, as determined on the last
day of the Fiscal Quarter just ended; plus
(iii) an amount equal to the book value of (A) Construction in
Progress on all Properties not subject to a Mortgage, plus (B)
Properties consisting of unimproved land, as determined on the last day
of the Fiscal Quarter just ended, of each Property not subject to a
Mortgage.
"Consolidated Unsecured Interest Expense" means at any time
that portion of Consolidated Interest Expense attributable to Consolidated
Unsecured Senior Debt.
"Consolidated Unsecured Senior Debt" means Consolidated Debt
which is (i) not expressly made subordinated to any other Consolidated Debt and
(ii) not subject to a Mortgage or any other Lien on any Property of the Borrower
or any Consolidated Entity.
"Construction in Progress" means, for any Property in the
process of being developed as a retail shopping center but is not a Stabilized
Property, calculated on a consolidated basis for the Borrower and the
Guarantors, the construction-in-progress as shown from time to time on the books
and records of the Borrower and the Guarantors, maintained in accordance with
GAAP.
"Contribution Agreement" means the Contribution Agreement of
even date herewith in substantially the form of Exhibit O to be executed by the
Borrower and each of the Guarantors pursuant to Section 3.01 or 5.27.
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"Control" means, with respect to any Person, the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities or otherwise.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower, are treated as a single
employer under Section 414 of the Code.
"Debt" of any Person means at any date, without duplication,
(i) all obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in the ordinary
course of business, (iv) all obligations of such Person as lessee under capital
leases, (v) all obligations of such Person to reimburse any bank or other Person
in respect of amounts payable under a banker's acceptance, (vi) all Redeemable
Preferred Stock of such Person (in the event such Person is a corporation),
(vii) all obligations of such Person to reimburse any bank or other Person in
respect of amounts paid or to be paid under a letter of credit or similar
instrument, (viii) all Debt of others secured by a Lien on any asset of such
Person, whether or not such Debt is assumed by such Person, (ix) all obligations
of such Person with respect to interest rate protection agreements, foreign
currency exchange agreements or other hedging arrangements (valued as the
termination value thereof computed in accordance with a method approved by the
International Swap Dealers Association and agreed to by such Person in the
applicable hedging agreement, if any), (x) all obligations of such Person under
a forward contract for the purchase of equity securities, and (xi) all Debt of
others Guaranteed by such Person.
"Debt Rating" means at any time whichever is the average of
the spread between the ratings of the Borrower/Parent's senior unsecured,
unenhanced debt (or, if no such debt exists, its issuer credit rating for debt
of such type) by Moody's or S&P (as such rating may change from time to time,
either pursuant to Section 2.07(g) or otherwise) (provided, that in the event of
a double or greater split rating, the rating immediately above the lowest rating
shall apply), or if only one of them rates the Borrower/Parent's senior
unsecured, unenhanced debt, such rating.
"Default" means any condition or event which constitutes an
Event of Default or which with the giving of notice or lapse of time or both
would, unless cured or waived, become an Event of Default.
"Default Rate" means, with respect to any Loan, on any day,
the sum of 2% plus the then highest interest rate (including the Applicable
Margin) which may be applicable to any Loans hereunder (irrespective of whether
any such type of Loans are actually outstanding hereunder).
"Designated Bank" means a special purpose corporation owned
and controlled by its Designating Bank that is identified as such on the
signature pages hereto next to the caption "Designated Bank" as well as each
special purpose corporation owned and controlled by its Designating Bank that
(i) shall have become a party to this Agreement pursuant to Section 9.08(g), and
(ii) is not otherwise a Bank.
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<PAGE> 13
"Designated Bank Note" means a Money Market Loan Note,
evidencing the obligation of the Borrower to repay Money Market Loans made by a
Designated Bank, and "Designated Bank Notes" means any all such Money Market
Loan Notes to Designated Banks issued hereunder.
"Designating Bank" shall mean each Bank that is identified as
such on the signature pages hereto next to the caption "Designating Bank" and
immediately below the signature of its Designated Bank as well as each Bank that
shall designate a Designated Bank pursuant to Section 9.08(g).
"Designation Agreement" means a designation agreement in
substantially the form of Exhibit K attached hereto, entered into by a Bank and
a Designated Bank and acknowledged by the Borrower and the Administrative Agent.
"Dividends" means for any period the sum of all dividends and
other distributions paid or declared during such period in respect of any
Capital Stock and Redeemable Preferred Stock (other than dividends paid or
payable in the form of additional Capital Stock).
"Dollars" or "$" means dollars in lawful currency of the
United States of America.
"Domestic Business Day" means any day except a Saturday,
Sunday or other day on which commercial banks in Georgia are authorized by law
to close.
"Eligible Property" means the Non-Wholly Owned Eligible
Property (but only so long as the Borrower and/or the Guarantors control the
operation and management of, and have the controlling interest in, such
Property) and any other Property which is wholly owned by the Borrower and/or
any Guarantor and which is either (i) listed on Exhibit M or (ii) which is a
shopping center Property and has been approved (or deemed approved, as hereafter
provided) as an Eligible Property by the Required Banks at the request of the
Borrower, taking into account the following information concerning the Property
provided to the Administrative Agent and the Banks by the Borrower: a physical
description, applicable environmental reports, information regarding its age,
location and occupancy, an operating statement and rent roll for the most recent
Fiscal Quarter, and an operating budget for the current Fiscal Year; provided,
however, that (i) any Property that has been proposed by the Borrower as an
Eligible Property shall be deemed approved as such unless, within 15 Domestic
Business Days after all of the foregoing information concerning such Property
has been delivered by the Borrower to the Administrative Agent and the Banks,
the Administrative Agent notifies the Borrower that the Required Banks have not
approved such Property as an Eligible Property; and (ii) any Eligible Property
shall be released in writing by the Administrative Agent as an Eligible Property
upon the written request of the Borrower, to enable the Borrower to sell or
obtain financing on such Eligible Property, so long as no Default or Event of
Default is in existence or would be caused thereby, and upon such release, such
Property shall no longer constitute Eligible Property.
"Eligible Unencumbered Stabilized Property" means any Eligible
Property which (I) is not subject to a Mortgage, and (ii) is a Stabilized
Property.
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<PAGE> 14
"Environmental Authority" means any foreign, federal, state,
local or regional government that exercises any form of jurisdiction or
authority under any Environmental Requirement.
"Environmental Permits" means all licenses, permits, orders,
approvals, notices or registrations, approvals or similar legal authorizations
for conducting the business of the Borrower/Parent or any Subsidiary required by
any Environmental Requirement.
"Environmental Judgments and Orders" means (i) all judgments,
decrees or orders arising from or in any way associated with any Environmental
Requirements, whether or not entered upon consent, or (ii) written agreements
with an Environmental Authority or other entity arising from or in any way
associated with any Environmental Requirement, whether or not incorporated in a
judgment, decree or order.
"Environmental Liabilities" means any liabilities, whether
accrued, contingent or otherwise, arising from and in any way associated with
any Environmental Requirements.
"Environmental Notices" means written notice from any
Environmental Authority or by any other person or entity, of Borrower's or any
Subsidiary's alleged noncompliance with or liability under any Environmental
Requirement, including without limitation any written complaints, citations,
demands or requests from any Environmental Authority or from any other person or
entity for correction of any violation of any Environmental Requirement or any
investigations concerning any violation of any Environmental Requirement.
"Environmental Proceedings" means any judicial or
administrative proceedings arising from or in any way associated with any
Environmental Requirement.
"Environmental Releases" means releases as defined in CERCLA
or under any similar applicable state or local environmental law or regulation.
"Environmental Requirements" means any federal, state or local
laws and ordinances, regulations, writs, judgments, orders or Environmental
Permits relating to pollution or protection of the environment and applicable to
the Borrower/Parent, any Subsidiary or the Properties, including but not limited
to any such requirement under CERCLA, EPCRA, RCRA, the Clean Water Act, the
Clean Air Act, similar state or local requirements or common law.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, or any successor law. Any reference to any
provision of ERISA shall also be deemed to be a reference to any successor
provision or provisions thereof.
"Euro-Dollar Business Day" means any Domestic Business Day on
which dealings in Dollar deposits are carried out in the London interbank
market.
"Euro-Dollar Loan" means a Loan which bears or is to bear
interest at a rate based upon the Adjusted London Interbank Offered Rate, and to
be made as a Euro-Dollar Loan pursuant to the applicable Notice of Borrowing or
Notice of Continuation or Conversion.
"Euro-Dollar Reserve Percentage" has the meaning set forth in
Section 2.07(c).
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<PAGE> 15
"Executive Officer" refers to an executive officer of the
Borrower, and means the Chairman, the Vice Chairman, the President, the Chief
Financial Officer, Chief Accounting Officer or the Treasurer of the Borrower.
"Event of Default" has the meaning set forth in Section 6.01.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upward, if necessary, to the next higher 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Domestic
Business Day next succeeding such day, provided that (i) if the day for which
such rate is to be determined is not a Domestic Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the next preceding
Domestic Business Day as so published on the next succeeding Domestic Business
Day, and (ii) if such rate is not so published for any day, the Federal Funds
Rate for such day shall be the average rate charged to the Administrative Agent
on such day on such transactions, as determined by the Administrative Agent.
"Fiscal Quarter" means any fiscal quarter of the
Borrower/Parent.
"Fiscal Year" means any fiscal year of the Borrower/Parent.
"Fixed Rate Borrowing" means a Euro-Dollar Borrowing or a
Money Market Borrowing, or any or all of them, as the context shall require.
"Fixed Rate Loans" means Euro-Dollar Loans or Money Market
Loans, or any or all of them, as the context shall require.
"Foreign Currency Loans" means Loans made in a Foreign
Currency pursuant to the terms and conditions set forth in Section 2.01.
"Funding Indemnification Letter" means a letter agreement
substantially in the form of Exhibit P, duly executed by an Executive Officer of
the Borrower, pursuant to which (i) the Administrative Agent and the Borrower
shall have agreed upon the interest rate, amount of Borrowing and Interest
Period for any Fixed Rate Loan requested to be made on the anticipated Closing
Date, and (ii) the Borrower shall indemnify the Banks from any loss or expense
arising from the failure to close on the anticipated Closing Date identified in
such letter or the failure to borrow such Fixed Rate Loan on such date.
"Funds From Operations" has the meaning ascribed to such term
in preparation of financial statements for real estate investment trusts as
required by NAREIT from time to time, subject to Section 1.02.
"GAAP" means generally accepted accounting principles applied
on a basis consistent with those which, in accordance with Section 1.02, are to
be used in making the calculations for purposes of determining compliance with
the terms of this Agreement.
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<PAGE> 16
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to secure, purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt or other obligation (whether arising by virtue
of partnership arrangements, by agreement to keep-well, to purchase assets,
goods, securities or services, to provide collateral security, to take-or-pay,
or to maintain financial statement conditions or otherwise) or (ii) entered into
for the purpose of assuring in any other manner the obligee of such Debt or
other obligation of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part), provided that the term Guarantee shall
not include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
"Guaranty" means, individually and collectively, as the
context shall require, the Guaranty Agreement of even date herewith in
substantially the form of Exhibit N to be executed by the Guarantors,
unconditionally and jointly and severally Guaranteeing payment of the Loans, the
Notes and all other obligations of the Borrower to the Administrative Agent and
the Banks hereunder, including without limitation all principal, interest, fees,
costs, and compensation and indemnification amounts.
"Guarantors" means any one or more or all of the following, as
the context shall require: (i) IRT Capital Corporation II, a Georgia
corporation, IRT Partners L.P., a Georgia limited partnership (subject to the
provisions of Section 5.28), IRT Management Company, a Georgia corporation, and
IRT Alabama, Inc., an Alabama corporation; and (ii) any Significant Subsidiary
which becomes a Guarantor pursuant to Section 5.27; (iii) any other Subsidiary
which elects to become a Guarantor pursuant to Section 5.27; in each case
subject to the provisions of the last sentence of Section 5.05, and (iv) from
and after the consummation of a Top Level Reorganization and the satisfaction of
the Top Level Reorganization Conditions, the Parent.
"Hazardous Materials" includes, without limitation, (a)
hazardous waste, as defined in the Resource Conservation and Recovery Act of
1980, 42 U.S.C. ss. 6901 et seq. and its implementing regulations and
amendments, or in any similar applicable state or local law or regulation, (b)
"hazardous substance", "pollutant", or "contaminant" as defined in CERCLA, or in
any similar applicable state or local law or regulation, (c) gasoline, or any
other petroleum product or by-product, including, crude oil or any fraction
thereof, (d) toxic substances, as defined in the Toxic Substances Control Act of
1976, or in any similar applicable state or local law or regulation and (e)
insecticides, fungicides, or rodenticides, as defined in the Federal
Insecticide, Fungicide, and Rodenticide Act of 1975, or in any similar
applicable state or local law or regulation.
"Interest Period" means: (1) with respect to each Euro-Dollar
Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the first, second, third or sixth month
thereafter, as the Borrower may elect in the applicable Notice of Borrowing;
provided that:
(a) any Interest Period (subject to paragraph (c)
below) which would otherwise end on a day which is not a Euro-Dollar
Business Day shall be extended to the
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<PAGE> 17
next succeeding Euro-Dollar Business Day unless such Euro-Dollar
Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Euro-Dollar Business
Day;
(b) any Interest Period which begins on the last
Euro-Dollar Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the appropriate subsequent
calendar month) shall, subject to paragraph (c) below, end on the last
Euro-Dollar Business Day of the appropriate subsequent calendar month;
and
(c) no Interest Period may be selected which begins
before the Termination Date and would otherwise end after the
Termination Date.
(2) with respect to each Money Market Borrowing, the period commencing on the
date of such Borrowing and ending on the Stated Maturity Date or such other date
or dates as may be specified in the applicable Money Market Quote; provided
that:
(a) any Interest Period (subject to clause (b) below)
which would otherwise end on a day which is not a Domestic Business Day
shall be extended to the next succeeding Domestic Business Day; and
(b) no Interest Period may be selected which begins
before the Termination Date and would otherwise end after the
Termination Date.
"Investment" means any investment in any Person, whether by
means of (i) purchase or acquisition of all or substantially all of the assets
of such Person (or of a division or line of business of such Person), (ii)
purchase or acquisition of obligations or securities of such Person, (iii)
capital contribution to such Person, (iv) loan or advance to such Person, (v)
making of a time deposit with such Person, (vi) Guarantee or assumption of any
obligation of such Person or (vii) by any other means.
"Lending Office" means, as to each Bank, its office located at
its address set forth on the signature pages hereof (or identified on the
signature pages hereof as its Lending Office) or such other office as such Bank
may hereafter designate as its Lending Office by notice to the Borrower and the
Administrative Agent.
"Lien" means, with respect to any asset, any mortgage, deed to
secure debt, deed of trust, lien, pledge, charge, security interest, security
title, preferential arrangement which has the practical effect of constituting a
security interest or encumbrance, or encumbrance or servitude of any kind in
respect of such asset to secure or assure payment of a Debt or a Guarantee,
whether by consensual agreement or by operation of statute or other law, or by
any agreement, contingent or otherwise, to provide any of the foregoing. For the
purposes of this Agreement, the Borrower/Parent or any Subsidiary shall be
deemed to own subject to a Lien any asset which it has acquired or holds subject
to the interest of a vendor or lessor under any conditional sale agreement,
capital lease or other title retention agreement relating to such asset.
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<PAGE> 18
"Liquidity Bank" means for any Designated Bank, at any date of
determination, the collective reference to the financial institutions which at
such date are providing liquidity or credit support facilities to or for the
account of such Designated Bank to fund such Designated Bank's obligations
hereunder or to support the securities, if any, issued by such Designated Bank
to fund such obligations.
"Loan" means a Base Rate Loan, Euro-Dollar Loan, Syndicated
Loan or Money Market Loan, and "Loans" means Base Rate Loans, Euro-Dollar Loans,
Syndicated Loans, Money Market Loans, or any or all of them, as the context
shall require.
"Loan Documents" means this Agreement, the Notes, the
Guaranty, the Contribution Agreement, any other document evidencing, relating to
or securing the Loans, and any other document or instrument delivered from time
to time in connection with this Agreement, the Notes or the Loans, as such
documents and instruments may be amended or supplemented from time to time.
"London Interbank Offered Rate" has the meaning set forth in
Section 2.07(c).
"Margin Stock" means "margin stock" as defined in Regulations
T, U or X.
"Material Adverse Effect" means, with respect to any event,
act, condition or occurrence of whatever nature (including any adverse
determination in any litigation, arbitration, or governmental investigation or
proceeding), whether singly or in conjunction with any other event or events,
act or acts, condition or conditions, occurrence or occurrences, whether or not
related, a material adverse change in, or a material adverse effect upon, any of
(a) the financial condition, operations, business, properties or prospects of
the Borrower/Parent and its Consolidated Subsidiaries taken as a whole, (b) the
rights and remedies of the Administrative Agent or the Banks under the Loan
Documents, or the ability of the Borrower or the Parent to perform its
obligations under the Loan Documents to which it is a party, as applicable, or
(c) the legality, validity or enforceability of any Loan Document.
"Money Market Borrowing Date" has the meaning specified in
Section 2.03.
"Money Market Facility Limit" means an amount equal to 50% of
the aggregate Commitments, as such Commitments may be increased or reduced from
time to time.
"Money Market Loan Notes" means the promissory notes of the
Borrower, substantially in the form of Exhibit A-2, evidencing the obligation of
the Borrower to repay the Money Market Loans, together with all amendments,
consolidations, modifications, renewals and supplements thereto.
"Money Market Loans" means Loans made pursuant to the terms
and conditions set forth in Section 2.03.
"Money Market Quote" has the meaning specified in Section
2.03(c)(i).
"Money Market Quote Request" has the meaning specified in
Section 2.03(b).
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<PAGE> 19
"Money Market Rate" has the meaning specified in Section
2.03(c)(ii)(C).
"Moody's" means Moody's Investor Service, Inc.
"Mortgage" means, with respect to any referenced Property or
other asset, a mortgage, deed to secure debt, deed of trust or similar
instrument encumbering such Property or other asset.
"Multiemployer Plan" shall have the meaning set forth in
Section 4001(a)(3) of ERISA.
"NAREIT" means the National Association of Real Estate
Investment Trusts.
"Net Income" means, as applied to any Person for any period,
the aggregate amount of net income of such Person, after taxes, for such period,
as determined in accordance with GAAP.
"Net Operating Income" means, (A) for any Property, calculated
on a consolidated basis for the Borrower and the Guarantors, the sum of the
following derived from such Property: (i) Property revenues, less (ii) Property
expenses (excluding depreciation, amortization and debt service), less (iii) an
assumed management fee equal to 4% of gross rental income (less any management
fees included in Property expenses under clause (ii)) and less (iv) the ratable
portion allocable to the measurement period of an annual capital reserve equal
to $0.15 per square foot.
"Non-Wholly Owned Eligible Property" means Eligible Property
which is not wholly owned by the Borrower or any Guarantor, which is Venice
Plaza, Venice, Florida.
"Non-Wholly Owned Eligible Property Ownership Percentage"
refers to the ownership percentage which the Borrower and/or the Guarantors have
with respect to the Non-Wholly owned Eligible Property, which as of the Closing
Date is 75%.
"Notes" means each of the Syndicated Loan Notes or Money
Market Loan Notes, or any or all of them, as the context shall require.
"Notice of Borrowing" has the meaning set forth in Section
2.02(a).
"Notice of Continuation or Conversion" has the meaning set
forth in Section 2.04.
"Officer's Certificate" has the meaning set forth in Section
3.01(f).
"Operating Profits" means, as applied to any Person for any
period, the operating income of such Person for such period, as determined in
accordance with GAAP.
"Ownership Percentage" means, with respect to any Subsidiary
which is not a Wholly Owned Subsidiary, the percentage which the aggregate
beneficial ownership interests of the Borrower/Parent in such Subsidiary bears
to the aggregate beneficial ownership interests of all owners of beneficial
interests in such Subsidiary.
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<PAGE> 20
"Parent" has the meaning set forth in Section 5.28, but
references in this Agreement and the other Loan Documents to Parent shall take
effect only upon consummation of the Top Level Reorganization and the
satisfaction of each of the Top Level Reorganization Conditions.
"Participant" has the meaning set forth in Section 9.08(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Performance Pricing Determination Date" has the meaning set
forth in Section 2.07(a).
"Person" means an individual, a corporation, a partnership, an
unincorporated association, a trust or any other entity or organization,
including, but not limited to, a government or political subdivision or an
agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan
which is covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Code and is either (i) maintained by a member
of the Controlled Group for employees of any member of the Controlled Group or
(ii) maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which
a member of the Controlled Group is then making or accruing an obligation to
make contributions or has within the preceding 5 plan years made contributions.
"Prime Rate" refers to that interest rate so denominated and
set by Wachovia from time to time as an interest rate basis for borrowings. The
Prime Rate is but one of several interest rate bases used by Wachovia. Wachovia
lends at interest rates above and below the Prime Rate.
"Properties" means all real property owned, leased or
otherwise used or occupied by the Borrower or any Subsidiary, wherever located.
"Qualified Intermediary" means any Person serving as a
"qualified intermediary" for purposes of a Section 1031 Exchange.
"Quarterly Payment Date means each March 31, June 30,
September 30 and December 31, or, if any such day is not a Domestic Business
Day, the next succeeding Domestic Business Day.
"Redeemable Preferred Stock" of any Person means any preferred
stock issued by such Person which is at any time prior to the Termination Date
either (i) mandatorily redeemable (by sinking fund or similar payments or
otherwise) or (ii) redeemable at the option of the holder thereof.
"Refunding Loan" means a new Syndicated Loan made on the day
on which an outstanding Syndicated Loan is maturing or a Base Rate Borrowing is
being converted to a Fixed Rate Borrowing, if and to the extent that the
proceeds thereof are used for the purpose of paying
15
<PAGE> 21
such maturing Loan or Loan being converted, excluding any difference between the
amount of such maturing Loan or Loan being converted and any greater amount
being borrowed on such day and actually either being made available to the
Borrower pursuant to Section 2.02(c) or remitted to the Administrative Agent as
provided in Section 2.13, in each case as contemplated in Section 2.02(d).
"Regulation T" means Regulation T of the Board of Governors of
the Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
"Regulation X" means Regulation X of the Board of Governors of
the Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
"Related Fund" means, with respect to any Bank that is a fund
that invests in bank loans, any other fund that invests in bank loans and is
advised or managed by the same investment advisor as such Bank.
"Relinquished Property" means a Property sold to a Person
which is not the Borrower or an Affiliate thereof, and the proceeds of such sale
are held in an exchange account by a Qualified Intermediary, as part of a
Section 1031 Exchange.
"Replacement Property" means a Property acquired as a
replacement for a Relinquished Property as part of a Section 1031 Exchange.
"Reported Net Income" means, for any period, the Net Income of
the Borrower/Parent and its Consolidated Subsidiaries determined on a
consolidated basis.
"Required Banks" means at any time Banks having at least 66
2/3% of the aggregate amount of the Commitments or, if the Commitments are no
longer in effect, Banks holding at least 66 2/3% of the aggregate outstanding
principal amount of the sum of the (i) Syndicated Loans and (ii) Money Market
Loans.
"Restricted Payment" means (i) any dividend or other
distribution on any shares of the Borrower/Parent's Capital Stock (except
Dividends payable solely in shares of its Capital Stock) or (ii) any payment on
account of the purchase, redemption, retirement or acquisition of (a) any shares
of the Borrower/Parent's Capital Stock (except shares acquired upon the
conversion thereof into other shares of its Capital Stock) or (b) any option,
warrant or other right to acquire shares of the Borrower/Parent's Capital Stock.
"Section 1031 Exchange" means a sale and exchange of a
Relinquished Property for a Replacement Property pursuant to and qualifying for
tax treatment under Section 1031 of the Code.
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<PAGE> 22
"Significant Subsidiary" means any Subsidiary, other than IRT
Capital Corporation, which has assets which constitute more than 5% of
Consolidated Total Asset Value at the end of the most recent Fiscal Quarter (or,
with respect to any Subsidiary which existed during the entire 4 Fiscal Quarter
period but was acquired by the Borrower/Parent during such period, which would
have contributed more than 5% of Consolidated Total Asset Value during such
period had it been a Subsidiary for the entire period).
"S&P" means Standard & Poor's Ratings Group, a division of
McGraw-Hill, Inc.
"Stabilized Property" means at any time any retail shopping
center Property owned by the Borrower or any Guarantor (i) which is at least 85%
leased and under which rent is being paid (pursuant to written leases which have
been signed by both landlord and tenant, but including any month to month
occupancy by any such tenant after the expiration of such written lease) or (ii)
with respect to which a final certificate of occupancy was issued at least 3
months prior to the date of measurement.
"Stated Maturity Date" means, with respect to any Money Market
Loan, the Stated Maturity Date therefor specified by the Bank in the applicable
Money Market Quote.
"Stock Buyback Plan" means any stock purchase or other stock
acquisition program approved by the board of directors (or any authorized
committee thereof) of the Borrower/Parent pursuant to which the Borrower/Parent
will purchase or otherwise acquire outstanding shares of the common stock of the
Borrower/Parent.
"Subsidiary" means any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by the Borrower/Parent (including,
after the consummation of the Top Level Reorganization and the satisfaction of
the Top Level Reorganization Conditions, the then Borrower hereunder, IRT
Partners L.P.).
"Syndicated Loans" means Base Rate Loans or Euro-Dollar Loans
made pursuant to the terms and conditions set forth in Section 2.01.
"Syndicated Loan Notes" means the promissory notes of the
Borrower, substantially in the form of Exhibit A-1, evidencing the obligation of
the Borrower to repay Syndicated Loans, together with all amendments,
consolidations, modifications, renewals and supplements thereto.
"Taxes" has the meaning set forth in Section 2.13(c).
"Termination Date" means whichever is applicable of (i)
November 1, 2002, (ii) such later date to which it is extended by the Banks
pursuant to Section 2.06(b), in their sole and absolute discretion, (iii) the
date the Commitments are terminated pursuant to Section 6.01 following the
occurrence of an Event of Default, or (iv) the date the Borrower terminates the
Commitments entirely pursuant to Section 2.09.
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<PAGE> 23
"Third Parties" means all lessees, sublessees, licensees and
other users of the Properties, excluding those users of the Properties in the
ordinary course of the Borrower's business and on a temporary basis.
"Transferee" has the meaning set forth in Section 9.08(d).
"Top Level Reorganization" has the meaning set forth in
Section 5.28.
"Top Level Reorganization Conditions" has the meaning set
forth in Section 5.28.
"Unfunded Vested Liabilities" means, with respect to any Plan
at any time, the amount (if any) by which (i) the present value of all vested
nonforfeitable benefits under such Plan exceeds (ii) the fair market value of
all Plan assets allocable to such benefits, all determined as of the then most
recent valuation date for such Plan, but only to the extent that such excess
represents a potential liability of a member of the Controlled Group to the PBGC
or the Plan under Title IV of ERISA.
"Unused Commitment" means at any date, with respect to any
Bank, an amount equal to its Commitment less the aggregate outstanding principal
amount of its Syndicated Loans (but not its Money Market Loans).
"Wachovia" means Wachovia Bank, N.A., a national banking
association, and its successors.
"Wholly Owned Subsidiary" means any Subsidiary all of the
shares of capital stock or other ownership interests of which (except directors'
qualifying shares) are at the time directly or indirectly owned by the
Borrower/Parent.
"Y2K Plan" has the meaning set forth in Section 4.19.
"Year 2000 Compliant and Ready" means that (a) the
Borrower's/Parent's and its Subsidiaries' hardware and software systems with
respect to the operation of its business and its general business plan will: (i)
handle date information involving any and all dates before, during and after
January 1, 2000, including accepting input, providing output and performing date
calculations in whole or in part; (ii) operate, accurately without material
interruption on and in respect of any and all dates before, during and after
January 1, 2000 and without any change in performance; (iii) store and provide
date input information without creating any ambiguity as to the century and; (b)
the Borrower/Parent has developed alternative plans to ensure business
continuity in the event of the failure of any or all of items (i) through (iii)
in clause (a) above in this definition.
SECTION 1.02. ACCOUNTING TERMS AND DETERMINATIONS.
Unless otherwise specified herein, all terms of an accounting
character used herein shall be interpreted, all accounting determinations
hereunder shall be made, and all financial statements required to be delivered
hereunder shall be prepared, in accordance with GAAP, or with respect to the
calculation of Funds From Operations, as required by NAREIT, applied on a basis
consistent (except for changes concurred in by the Borrower/Parent's
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<PAGE> 24
independent public accountants or otherwise required by a change in GAAP) with
the most recent audited consolidated financial statements of the Borrower/Parent
and its Consolidated Subsidiaries delivered to the Banks unless with respect to
any such change concurred in by the Borrower/Parent's independent public
accountants or required by GAAP or, with respect to the calculation of Funds
From Operations, as required by NAREIT, in determining compliance with any of
the provisions of this Agreement or any of the other Loan Documents: (i) the
Borrower shall have objected to determining such compliance on such basis at the
time of delivery of such financial statements, or (ii) the Required Banks shall
so object in writing within 30 days after the delivery of such financial
statements, in either of which events such calculations shall be made on a basis
consistent with those used in the preparation of the latest financial statements
as to which such objection shall not have been made (which, if objection is made
in respect of the first financial statements delivered under Section 5.01
hereof, shall mean the financial statements referred to in Section 4.04).
SECTION 1.03. REFERENCES.
Unless otherwise indicated, references in this Agreement to
"Articles", "Exhibits", "Schedules", "Sections" and other Subdivisions are
references to articles, exhibits, schedules, sections and other subdivisions
hereof.
SECTION 1.04. USE OF DEFINED TERMS.
All terms defined in this Agreement shall have the same
defined meanings when used in any of the other Loan Documents, unless otherwise
defined therein or unless the context shall require otherwise.
SECTION 1.05. TERMINOLOGY.
All personal pronouns used in this Agreement, whether used in
the masculine, feminine or neuter gender, shall include all other genders; the
singular shall include the plural, and the plural shall include the singular.
Titles of Articles and Sections in this Agreement are for convenience only, and
neither limit nor amplify the provisions of this Agreement.
ARTICLE II.
THE CREDITS
SECTION 2.01. COMMITMENTS TO LEND SYNDICATED LOANS.
Each Bank severally agrees, on the terms and conditions set
forth herein, to make Syndicated Loans to the Borrower from time to time before
the Termination Date; provided that,
(i) immediately after each such Syndicated Loan is
made, the aggregate outstanding principal amount of Syndicated Loans by
such Bank shall not exceed the amount of its Commitment, and
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<PAGE> 25
(ii) the aggregate outstanding amount of all
Syndicated Loans and Money Market Loans shall not exceed the lesser of
(A) the aggregate amount of the Commitments and (B) the Borrowing Base.
Each Syndicated Borrowing under this Section shall be in an
aggregate principal amount of $1,000,000 or any larger integral multiple of
$500,000 (except that any such Syndicated Borrowing may be in the aggregate
amount of the Unused Commitments) and shall be made from the several Banks
ratably in proportion to their respective Commitments. Within the foregoing
limits, the Borrower may borrow under this Section, repay or, to the extent
permitted by Section 2.11, prepay Syndicated Loans and reborrow under this
Section at any time before the Termination Date.
SECTION 2.02. METHOD OF BORROWING SYNDICATED LOANS.
(a) The Borrower shall give the Administrative Agent notice (a
"Notice of Borrowing"), which shall be substantially in the form of Exhibit E-1,
prior to 11:00 A.M. (Atlanta, Georgia time), on the same Domestic Business Day
of each Base Rate Borrowing, and at least 3 Euro-Dollar Business Days before
each Euro-Dollar Borrowing, specifying:
(i) the date of such Borrowing, which shall be a
Domestic Business Day in the case of a Base Rate Borrowing or a
Euro-Dollar Business Day in the case of a Euro-Dollar Borrowing,
(ii) the aggregate amount of such Borrowing,
(iii) whether the Syndicated Loans comprising such
Borrowing are to be Base Rate Loans or Euro-Dollar Loans, and
(iv) in the case of a Fixed Rate Borrowing, the
duration of the Interest Period applicable thereto, subject to the
provisions of the definition of Interest Period.
(b) Upon receipt of a Notice of Borrowing, the Administrative
Agent shall promptly notify each Bank of the contents thereof and of such Bank's
ratable share of such Syndicated Borrowing and such Notice of Borrowing, once
received by the Administrative Agent, shall not thereafter be revocable by the
Borrower.
(c) Not later than (i) 12:30 P.M. (Atlanta, Georgia time) as
to Base Rate Borrowings and (ii) 11:00 A.M. (Atlanta, Georgia time) as to
Euro-Dollar Borrowings, on the date of each Syndicated Borrowing, each Bank
shall (except as provided in paragraph (d) of this Section) make available its
ratable share of such Syndicated Borrowing, in Federal or other funds
immediately available in Atlanta, Georgia, to the Administrative Agent at its
address determined pursuant to Section 9.01. Unless the Administrative Agent
determines that any applicable condition specified in Article III has not been
satisfied, the Administrative Agent will make the funds so received from the
Banks available to the Borrower at the Administrative Agent's aforesaid address.
Unless the Administrative Agent receives notice from a Bank, at the
Administrative Agent's address referred to in or specified pursuant to Section
9.01, no later than 4:00 P.M. (local time at such address) on the Domestic
Business Day before the date of a Syndicated Borrowing stating that such Bank
will not make a Syndicated Loan in connection
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<PAGE> 26
with such Syndicated Borrowing, the Administrative Agent shall be entitled to
assume that such Bank will make a Syndicated Loan in connection with such
Syndicated Borrowing and, in reliance on such assumption, the Administrative
Agent may (but shall not be obligated to) make available such Bank's ratable
share of such Syndicated Borrowing to the Borrower for the account of such Bank.
If the Administrative Agent makes such Bank's ratable share available to the
Borrower and such Bank does not in fact make its ratable share of such
Syndicated Borrowing available on such date, the Administrative Agent shall be
entitled to recover such Bank's ratable share from such Bank or the Borrower
(and for such purpose shall be entitled to charge such amount to any account of
the Borrower maintained with the Administrative Agent), together with interest
thereon for each day during the period from the date of such Syndicated
Borrowing until such sum shall be paid in full at a rate per annum equal to the
rate at which the Administrative Agent determines that it obtained (or could
have obtained) overnight Federal funds to cover such amount for each such day
during such period, provided that (i) any such payment by the Borrower of such
Bank's ratable share and interest thereon shall be without prejudice to any
rights that the Borrower may have against such Bank and (ii) until such Bank has
paid its ratable share of such Syndicated Borrowing, together with interest
pursuant to the foregoing, it will have no interest in or rights with respect to
such Syndicated Borrowing for any purpose hereunder. If the Administrative Agent
does not exercise its option to advance funds for the account of such Bank, it
shall forthwith notify the Borrower of such decision.
(d) If any Bank makes a new Syndicated Loan hereunder on a day
on which the Borrower is to repay all or any part of an outstanding Syndicated
Loan from such Bank, such Bank shall apply the proceeds of its new Syndicated
Loan to make such repayment as a Refunding Loan and only an amount equal to the
difference (if any) between the amount being borrowed and the amount of such
Refunding Loan shall be made available by such Bank to the Administrative Agent
as provided in paragraph (c) of this Section, or remitted by the Borrower to the
Administrative Agent as provided in Section 2.13, as the case may be.
(e) Notwithstanding anything to the contrary contained in this
Agreement, no Fixed Rate Borrowing may be made if there shall have occurred a
Default or an Event of Default, which Default or Event of Default shall not have
been cured or waived, and all Refunding Loans shall be made as Base Rate Loans
(but shall bear interest at the Default Rate, if applicable).
(f) In the event that a Notice of Borrowing fails to specify
whether the Syndicated Loans comprising such Syndicated Borrowing are to be Base
Rate Loans or Euro-Dollar Loans, such Syndicated Loans shall be made as Base
Rate Loans. If the Borrower is otherwise entitled under this Agreement to repay
any Syndicated Loans maturing at the end of an Interest Period applicable
thereto with the proceeds of a new Borrowing, and the Borrower fails to repay
such Syndicated Loans using its own moneys and fails to give a Notice of
Borrowing in connection with such new Syndicated Borrowing, a new Syndicated
Borrowing shall be deemed to be made on the date such Syndicated Loans mature in
an amount equal to the principal amount of the Syndicated Loans so maturing, and
the Syndicated Loans comprising such new Syndicated Borrowing shall be Base Rate
Loans.
(g) Notwithstanding anything to the contrary contained herein,
there shall not be more than 8 Interest Periods outstanding at any given time.
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<PAGE> 27
SECTION 2.03. MONEY MARKET LOANS.
(a) In addition to making Syndicated Borrowings, so long as
the Debt Rating is BBB- and Baa3 or higher, the Borrower may, as set forth in
this Section 2.03, request the Banks to make offers to make Money Market
Borrowings available to the Borrower. The Banks may, but shall have no
obligation to, make such offers and the Borrower may, but shall have no
obligation to, accept any such offers in the manner set forth in this Section
2.03, provided that:
(i) the number of Interest Periods applicable to Money
Market Loans which may be outstanding at any given time is subject to
the provisions of Section 2.02(g);
(ii) the aggregate principal amount of all Money Market
Loans, (A) do not exceed the Money Market Facility Limit, and (B)
together with the aggregate principal amount of all Syndicated Loans at
any one time outstanding shall not exceed the aggregate amount of the
Commitments of all of the Banks at such time; and
(iii) The Money Market Loans of any Bank will be deemed to be
usage of the Commitments for the purpose of calculating availability
pursuant to Section 2.01(a)(ii), but will not reduce such Bank's
obligation to lend its pro rata share of the remaining Unused
Commitment.
(b) When the Borrower wishes to request offers to make Money
Market Loans, it shall give the Administrative Agent (which shall promptly
notify the Banks) notice substantially in the form of Exhibit I hereto (a "Money
Market Quote Request") so as to be received no later than 11:00 A.M. (Atlanta,
Georgia time) at least 2 Domestic Business Days prior to the date of the Money
Market Borrowing proposed therein (or such other time and date as the Borrower
and the Administrative Agent, with the consent of the Required Banks, may
agree), specifying:
(i) the proposed date of such Money Market Borrowing, which
shall be a Euro-Dollar Business Day (the "Money Market Borrowing
Date");
(ii) the maturity date (or dates) (each a "Stated Maturity
Date") for repayment of each Money Market Loan to be made as part of
such Money Market Borrowing (which Stated Maturity Date shall be that
date occurring not less than 7 days but not more than 180 days from the
date of such Money Market Borrowing); provided that the Stated Maturity
Date for any Money Market Loan may not extend beyond the Termination
Date (as in effect on the date of such Money Market Quote Request); and
(iii) the aggregate amount of principal to be requested by the
Borrower as a result of such Money Market Borrowing, which shall be at
least $1,000,000 (and in larger integral multiples of $500,000) but
shall not cause the limits specified in Section 2.03(a) to be violated.
The Borrower may request offers to make Money Market Loans having up to 2
different Stated Maturity Dates in a single Money Market Quote Request; provided
that the request for each separate Stated Maturity Date shall be deemed to be a
separate Money Market Quote Request for
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<PAGE> 28
a separate Money Market Borrowing. Except as otherwise provided in the
immediately preceding sentence, after the first Money Market Quote Request has
been given hereunder, no Money Market Quote Request shall be given until at
least 5 Domestic Business Days after all prior Money Market Quote Requests have
been fully processed by the Administrative Agent, the Banks and the Borrower
pursuant to this Section 2.03.
(c) (i) Each Bank may, but shall have no obligation to,
submit a response containing an offer to make a Money Market Loan substantially
in the form of Exhibit J hereto (a "Money Market Quote") in response to any
Money Market Quote Request; provided that, if the Borrower's request under
Section 2.03(b) specified more than 1 Stated Maturity Date, such Bank may, but
shall have no obligation to, make a single submission containing a separate
offer for each such Stated Maturity Date and each such separate offer shall be
deemed to be a separate Money Market Quote. Each Money Market Quote must be
submitted to the Administrative Agent not later than 11:00 A.M. (Atlanta,
Georgia time) on the Money Market Borrowing Date; provided that any Money Market
Quote submitted by Wachovia may be submitted, and may only be submitted, if
Wachovia notifies the Borrower of the terms of the offer contained therein not
later than 10:45 A.M. (Atlanta, Georgia time) on the Money Market Borrowing Date
(or 15 minutes prior to the time that the other Banks are required to have
submitted their respective Money Market Quotes). Subject to Section 6.01, any
Money Market Quote so made shall be irrevocable except with the written consent
of the Administrative Agent given on the instructions of the Borrower.
(ii) Each Money Market Quote shall specify:
(A) the proposed Money Market Borrowing Date and the
Stated Maturity Date therefor;
(B) the principal amounts of the Money Market Loan
which the quoting Bank is willing to make for the applicable Money
Market Quote, which principal amounts (x) may be greater than or less
than the Commitment of the quoting Bank, (y) shall be at least
$1,000,000 or a larger integral multiple of $500,000, and (z) may not
exceed the principal amount of the Money Market Borrowing for which
offers were requested;
(C) the rate of interest per annum (rounded upwards,
if necessary, to the nearest 1/100th of 1%) offered for each such Money
Market Loan (such amounts being hereinafter referred to as the "Money
Market Rate"); and
(D) the identity of the quoting Bank.
Unless otherwise agreed by the Administrative Agent and the
Borrower, no Money Market Quote shall contain qualifying, conditional or similar
language or propose terms other than or in addition to those set forth in the
applicable Money Market Quote Request (other than setting forth the principal
amounts of the Money Market Loan which the quoting Bank is willing to make for
the applicable Interest Period) and, in particular, no Money Market Quote may be
conditioned upon acceptance by the Borrower of all (or some specified minimum)
of the
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<PAGE> 29
principal amount of the Money Market Loan for which such Money Market
Quote is being made.
(d) The Administrative Agent shall as promptly as practicable
after the Money Market Quote is submitted (but in any event not later than
11:30 A.M. (Atlanta, Georgia time)) on the Money Market Borrowing Date, notify
the Borrower of the terms (i) of any Money Market Quote submitted by a Bank that
is in accordance with Section 2.03(c) and (ii) of any Money Market Quote that
amends, modifies or is otherwise inconsistent with a previous Money Market Quote
submitted by such Bank with respect to the same Money Market Quote Request. Any
such subsequent Money Market Quote shall be disregarded by the Administrative
Agent unless such subsequent Money Market Quote is submitted solely to correct a
manifest error in such former Money Market Quote. The Administrative Agent's
notice to the Borrower shall specify (A) the principal amounts of the Money
Market Borrowing for which offers have been received and (B) the respective
principal amounts and Money Market Rates so offered by each Bank (identifying
the Bank that made each Money Market Quote).
(e) Not later than 12:00 P.M. (Atlanta, Georgia time) on the
Money Market Borrowing Date, the Borrower shall notify the Administrative Agent
of its acceptance or nonacceptance of the offers so notified to it pursuant to
Section 2.03(d) and the Administrative Agent shall promptly notify each Bank
which submitted an offer. In the case of acceptance, such notice shall specify
the aggregate principal amount of offers (for each Stated Maturity Date) that
are accepted. The Borrower may accept any Money Market Quote in whole or in
part; provided that:
(i) the aggregate principal amount of each Money Market
Borrowing may not exceed the applicable amount set forth in the related
Money Market Quote Request;
(ii) the aggregate principal amount of each Money Market Loan
comprising a Money Market Borrowing shall be at least $1,000,000 (and
in larger integral multiples of $500,000) but shall not cause the
limits specified in Section 2.03(a) to be violated;
(iii) acceptance of offers may only be made in ascending order
of Money Market Rates; and
(iv) the Borrower may not accept any offer where the
Administrative Agent has advised the Borrower that such offer fails to
comply with Section 2.03(c)(ii) or otherwise fails to comply with the
requirements of this Agreement (including without limitation, Section
2.03(a)).
If offers are made by 2 or more Banks with the same Money Market Rates for a
greater aggregate principal amount than the amount in respect of which offers
are accepted for the related Stated Maturity Date, the principal amount of Money
Market Loans in respect of which such offers are accepted shall be allocated by
the Borrower among such Banks as nearly as possible in proportion to the
aggregate principal amount of such offers. Determinations by the
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<PAGE> 30
Borrower of the amounts of Money Market Loans shall be conclusive in the absence
of manifest error.
(f) Any Bank whose offer to make any Money Market Loan has
been accepted shall, not later than 1:00 P.M. (Atlanta, Georgia time) on the
Money Market Borrowing Date, make the amount of such Money Market Loan allocated
to it available to the Administrative Agent at its address referred to in
Section 9.01 in immediately available funds. The amount so received by the
Administrative Agent shall, subject to the terms and conditions of this
Agreement, be made available to the Borrower on such date by depositing the
same, in immediately available funds, not later than 4:00 P.M. (Atlanta, Georgia
time), in an account of such Borrower maintained with Wachovia.
(g) After any Money Market Loan has been funded, the
Administrative Agent shall notify the Banks of the aggregate principal amount of
the Money Market Quotes received and the highest and lowest rates included in
such Money Market Quotes.
(h) For any Bank which is a Designating Bank, any Money Market
Loan to be made by such Bank may from time to time be made by its Designated
Bank in such Designated Bank's sole discretion, and nothing herein shall
constitute a commitment to make Money Market Loans by such Designated Bank;
provided, that if any Designated Bank elects not to, or fails to, make any such
Money Market Loan that has been accepted by the Borrower in accordance with the
foregoing, its Designating Bank hereby agrees that it shall make such Money
Market Loan pursuant to the terms hereof.
SECTION 2.04. CONTINUATION AND CONVERSION ELECTIONS.
By delivering a notice (a "Notice of Continuation or
Conversion"), which shall be substantially in the form of Exhibit E-2, to the
Administrative Agent on or before 12:00 P.M., Atlanta, Georgia time, on a
Domestic Business Day (or Euro-Dollar Business Day, in the case of Euro-Dollar
Loans outstanding), the Borrower may from time to time irrevocably elect, by
notice on the same Domestic Business Day, in the case of Base Rate Loans, or 3
Euro-Dollar Business Days, in the case of Euro-Dollar Loans, that all, or any
portion in an aggregate principal amount of $1,000,000 or any larger integral
multiple of $500,000 be, (i) in the case of Base Rate Loans, converted into
Euro-Dollar Loans or, (ii) in the case of Euro-Dollar Loans, converted into Base
Rate Loans or continued as Euro-Dollar Loans (in the absence of delivery of a
Notice of Continuation or Conversion with respect to any Euro-Dollar Loan at
least 3 Euro-Dollar Business Days before the last day of the then current
Interest Period with respect thereto, such Euro-Dollar Loan shall, on such last
day, automatically convert to a Base Rate Loan); provided, however, that (x)
each such conversion or continuation shall be pro rated among the applicable
outstanding Loans of all Lenders that have made such Loans, and (y) no portion
of the outstanding principal amount of any Loans may be continued as, or be
converted into, any Fixed Rate Loan when any Event of Default has occurred and
is continuing.
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SECTION 2.05. NOTES.
(a) The Syndicated Loans of each Bank shall be evidenced by a
single Syndicated Loan Note payable to the order of such Bank for the account of
its Lending Office in an amount equal to the original principal amount of such
Bank's Commitment.
(b) The Money Market Loans made by any Bank to the Borrower
shall be evidenced by a single Money Market Loan Note payable to the order of
such Bank for the account of its Lending Office in an amount equal to the Money
Market Facility Limit.
(c) Upon receipt of each Bank's Notes pursuant to Section
3.01, the Administrative Agent shall deliver such Notes to such Bank. Each Bank
shall record, and prior to any transfer of its Notes shall endorse on the
schedules forming a part thereof appropriate notations to evidence, the date,
amount and maturity of, and effective interest rate for, each Loan made by it,
the date and amount of each payment of principal made by the Borrower with
respect thereto, and such schedules of each such Bank's Notes shall constitute
rebuttable presumptive evidence of the respective principal amounts owing and
unpaid on such Bank's Notes; provided that the failure of any Bank to make, or
any error in making, any such recordation or endorsement shall not affect the
obligation of the Borrower hereunder or under the Notes or the ability of any
Bank to assign its Notes. Each Bank is hereby irrevocably authorized by the
Borrower so to endorse its Notes and to attach to and make a part of any Note a
continuation of any such schedule as and when required.
SECTION 2.06. MATURITY OF LOANS.
(a) Each Fixed Rate Loan included in any Borrowing shall
mature, and the principal amount thereof shall be due and payable, on the last
day of the Interest Period applicable to such Borrowing.
(b) Notwithstanding the foregoing, the outstanding principal
amount of the Loans, if any, together with all accrued but unpaid interest
thereon, if any, shall be due and payable on November 1, 2002, unless the
Termination Date is otherwise extended by the Banks, in their sole and absolute
discretion. Upon the written request of the Borrower, which request shall be
delivered to the Administrative Agent at least 60 days prior to the Extension
Date (as such term is hereinafter defined), the Banks shall have the option
(without any obligation whatsoever so to do) of extending the Termination Date
for an additional one-year period on November 1, 2000 and November 1, 2001 (each
an "Extension Date"). Each Bank shall notify the Borrower and the Administrative
Agent at least 30 days prior to the relevant Extension Date whether or not it
chooses to extend the Termination Date for such an additional one-year period
(but any Bank which fails to give such notice within such period shall be deemed
not to have extended); provided, that the Termination Date shall not be extended
with respect to any of the Banks unless:
(i) the Required Banks are willing to extend the Termination
Date; and
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<PAGE> 32
(ii) on or before the relevant Extension Date, as to
the Commitment of any Bank which gave notice that it chooses not to
extend, or which is deemed pursuant to the foregoing not to have
extended (any such Bank being a "Terminating Bank"), one of the
following shall occur:
(x) the remaining Banks shall purchase
ratable assignments (without any obligation so to do)
from such Terminating Bank (in the form of an
Assignment and Acceptance) in accordance with their
respective percentage of the remaining Aggregate
Commitments; provided, that, such Banks shall be
provided such opportunity (which opportunity shall
allow such Banks at least 5 Domestic Business Days in
which to make a decision) prior to the Borrower
finding another bank pursuant to the immediately
succeeding clause (y); and, provided, further, that,
should any of the remaining Banks elect not to
purchase such an assignment, then, such other
remaining Banks shall be entitled to purchase an
assignment from any Terminating Bank which includes
the ratable interest that was otherwise available to
such non-purchasing remaining Bank or Banks, as the
case may be, or
(y) the Borrower shall find another bank,
acceptable to the Administrative Agent, willing to
accept an assignment from such Terminating Bank (in
the form of an Assignment and Acceptance) on or
before the Extension Date, or
(z) the Borrower shall reduce the aggregate
Commitments in an amount equal to the Commitment of
any such Terminating Bank.
In the event of any extension pursuant to the foregoing, on the
relevant Extension Date, the Borrower shall pay to the Administrative
Agent, for the ratable account of the Banks, an extension fee equal to
0.15% of the aggregate amount of the Commitments in effect on such
relevant Extension Date.
SECTION 2.07. INTEREST RATES.
(a) "Applicable Margin" means:
(i) for the period commencing on the Closing Date to and
including the first Performance Pricing Determination Date, (x) for any Base
Rate Loan, 0.00%, and (y) for any Euro-Dollar Loan, 1.15%; and
(ii) from and after the first Performance Pricing
Determination Date, (x) for any Base Rate Loan, 0.00% and (y) for each
Euro-Dollar Loan, the percentage determined on each Performance Pricing
Determination Date by reference to the table set forth below as to such type of
Loan and the Debt Rating on such Performance Pricing Determination Date;
provided, that if there is no Debt Rating, the Applicable Margin for Euro-Dollar
Loans shall be based upon Level V of the table below.
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<PAGE> 33
<TABLE>
<CAPTION>
=============================================================================================================
LEVEL LEVEL LEVEL LEVEL LEVEL
I II III IV V
=============================================================================================================
<S> <C> <C> <C> <C> <C>
>=BBB >=BBB-
>=BBB+ or Baa2 or Baa3 <BBB-
Debt Rating >=A- or Baa1 but but or
but <BBB+ or <BBB or Baa3
<A- Baa1 Baa2
- -------------------------------------------------------------------------------------------------------------
Applicable Margin 0.70% 0.85% 1.00% 1.15% 1.40%
=============================================================================================================
</TABLE>
In determining the amounts to be paid by the Borrower pursuant to Sections
2.07(b), and 2.08(a), the Borrower and the Banks shall refer to the Borrower's
Debt Rating from time to time. For purposes hereof, "Performance Pricing
Determination Date" shall mean each date on which the Debt Rating changes. Each
change in interest and fees as a result of a change in Debt Rating shall be
effective only for Loans (including Refunding Loans) which are made and fees
which accrue on or after the relevant Performance Pricing Determination Date.
All determinations hereunder shall be made by the Administrative Agent unless
the Required Banks shall object to any such determination. The Borrower shall
promptly notify the Administrative Agent of any change in the Debt Rating.
(b) Each Base Rate Loan shall bear interest on the outstanding
principal amount thereof, for each day from the date such Loan is made until it
becomes due, at a rate per annum equal to the Base Rate for such day plus the
Applicable Margin. Such interest shall be payable on each Quarterly Payment Date
while such Base Rate Loan is outstanding and on the date such Base Rate Loan is
converted to a Fixed Rate Loan. Any overdue principal of and, to the extent
permitted by applicable law, overdue interest on any Base Rate Loan shall bear
interest, payable on demand, for each day until paid at a rate per annum equal
to the Default Rate.
(c) Each Euro-Dollar Loan shall bear interest on the
outstanding principal amount thereof, for the Interest Period applicable
thereto, at a rate per annum equal to the sum of the Applicable Margin plus the
applicable Adjusted London Interbank Offered Rate for such Interest Period. Such
interest shall be payable for each Interest Period on the last day thereof and,
if such Interest Period is longer than 3 months, at intervals of 3 months after
the first day thereof. Any overdue principal of and, to the extent permitted by
law, overdue interest on any Euro-Dollar Loan shall bear interest, payable on
demand, for each day until paid at a rate per annum equal to the Default Rate.
The "Adjusted London Interbank Offered Rate" applicable to any
Interest Period means a rate per annum equal to the quotient obtained (rounded
upwards, if necessary, to the next higher 1/100th of 1%) by dividing (i) the
applicable London Interbank Offered Rate for such Interest Period by (ii) 1.00
minus the Euro-Dollar Reserve Percentage.
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<PAGE> 34
The "London Interbank Offered Rate" applicable to any
Euro-Dollar Loan means for the Interest Period of such Euro-Dollar Loan, the
rate per annum determined on the basis of the offered rate for deposits in
Dollars of amounts equal or comparable to the principal amount of such
Euro-Dollar Loan offered for a term comparable to such Interest Period, which
rates appear on Telerate Page 3750 effective as of 11:00 A.M., London time, 2
Euro-Dollar Business Days prior to the first day of such Interest Period,
provided that if no such offered rates appear on such page, the "London
Interbank Offered Rate" for such Interest Period will be the arithmetic average
(rounded upward, if necessary, to the next higher 1/100th of 1%) of rates quoted
by not less than 2 major banks in New York City, selected by the Administrative
Agent, at approximately 10:00 A.M., New York City time, 2 Euro-Dollar Business
Days prior to the first day of such Interest Period, for deposits in Dollars
offered by leading European banks for a period comparable to such Interest
Period in an amount comparable to the principal amount of such Euro-Dollar Loan.
"Euro-Dollar Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement for a member bank of
the Federal Reserve System in respect of "Eurocurrency liabilities" (or in
respect of any other category of liabilities which includes deposits by
reference to which the interest rate on Euro-Dollar Loans is determined or any
category of extensions of credit or other assets which includes loans by a
non-United States office of any Bank to United States residents). The Adjusted
London Interbank Offered Rate shall be adjusted automatically on and as of the
effective date of any change in the Euro-Dollar Reserve Percentage.
(d) Each Money Market Loan shall bear interest on the
outstanding principal amount thereof, for each day from the date such Money
Market Loan is made until it becomes due, at a rate per annum equal to the
applicable Money Market Rate set forth in the relevant Money Market Quote. Such
interest shall be payable on the Stated Maturity Date thereof, and, if the
Stated Maturity Date occurs more than 90 days after the date of the relevant
Money Market Loan, at intervals of 90 days after the first day thereof. Any
overdue principal of and, to the extent permitted by law, overdue interest on
any Money Market Loan shall bear interest, payable on demand, for each day until
paid at a rate per annum equal to the Default Rate.
(e) The Administrative Agent shall determine each interest
rate applicable to the Loans hereunder. The Administrative Agent shall give
prompt notice to the Borrower and the Banks by telecopier of each rate of
interest so determined, and its determination thereof shall be conclusive in the
absence of manifest error.
(f) After the occurrence and during the continuance of an
Event of Default, the principal amount of the Loans (and, to the extent
permitted by applicable law, all accrued interest thereon) may, at the election
of the Required Banks, bear interest at the Default Rate.
(g) Upon the request of Administrative Agent, at the direction
of the Required Banks, made not more than once in any period of 18 consecutive
months, the Borrower shall apply to Moody's or S&P for a new (or confirmation of
the old) Debt Rating.
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SECTION 2.08. FEES.
(a) The Borrower shall pay to the Administrative
Agent for the ratable account of each Bank a facility fee (the
"Facility Fee") on the maximum amount of the aggregate Commitments in
effect for any relevant period, irrespective of usage, calculated in
the manner provided in Section 2.07(a)(ii), at a rate per annum equal
to (i) for the period commencing on the Closing Date to and including
the first Performance Pricing Determination Date, 0.20%; and (ii) from
and after the first Performance Pricing Determination Date, the
percentage determined on each Performance Pricing Determination Date by
reference to the table set forth below and the Debt Rating for the
quarterly or annual period ending immediately prior to such Performance
Pricing Determination Date; provided, that if there is no Debt Rating,
the Facility Fee shall be based upon Level V of the table below. The
Facility Fee shall accrue at all times from and including the Closing
Date to but excluding the Termination Date and shall be payable, in
arrears, on each Quarterly Payment Date and on the Termination Date.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
==================================================================================================================
LEVEL LEVEL LEVEL LEVEL LEVEL
I II III IV V
==================================================================================================================
>=BBB >=BBB-
>=BBB+ or Baa2 or Baa3 <BBB-
Debt Rating >=A- or Baa1 but but or
but <BBB+ or <BBB or Baa3
<A- Baa1 Baa2
- ------------------------------------------------------------------------------------------------------------------
Facility Fee 0.15% 0.15% 0.20% 0.20% 0.25%
===================================================================================================================
</TABLE>
(b) The Borrower shall pay to the Administrative Agent, for
the account and sole benefit of the Administrative Agent, such fees and other
amounts at such times as set forth in the Arranger's Letter Agreement.
SECTION 2.09. OPTIONAL TERMINATION OR REDUCTION OF
COMMITMENTS.
The Borrower may, upon at least 3 Domestic Business Days'
notice to the Administrative Agent, terminate at any time, or proportionately
reduce the Unused Commitments from time to time by an aggregate amount of at
least $5,000,000 or any larger integral multiple of $500,000. If the Commitments
are terminated in their entirety, all accrued fees (as provided under Section
2.08) shall be due and payable on the effective date of such termination.
SECTION 2.10. MANDATORY REDUCTION AND TERMINATION OF
COMMITMENTS.
The Commitments shall terminate on the Termination Date and
any Loans then outstanding (together with accrued interest thereon) shall be due
and payable on such date.
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<PAGE> 36
SECTION 2.11. OPTIONAL PREPAYMENTS.
(a) The Borrower may, upon at least 1 Domestic Business Days'
notice to the Administrative Agent, prepay any Base Rate Borrowing in whole at
any time, or from time to time in part in amounts aggregating at least
$1,000,000 or any larger integral multiple of $500,000, by paying the principal
amount to be prepaid together with accrued interest thereon to the date of
prepayment. Each such optional prepayment shall be applied to prepay ratably the
Base Rate Loans of the several Banks included in such Base Rate Borrowing.
(b) Subject to any payments required pursuant to the terms of
Article VIII for such Fixed Rate Loan, upon 3 Domestic Business Day's prior
written notice, the Borrower may prepay in minimum amounts of $1,000,000 or any
larger integral multiple of $500,000 (or any lesser amount equal to the
outstanding balance of such Loan) all or any portion of the principal amount of
any Fixed Rate Loan prior to the maturity thereof.
(c) Upon receipt of a notice of prepayment pursuant to this
Section 2.11, the Administrative Agent shall promptly notify each Bank of the
contents thereof and of such Bank's ratable share of such prepayment and such
notice, once received by the Administrative Agent, shall not thereafter be
revocable by the Borrower.
SECTION 2.12. MANDATORY PREPAYMENTS.
On each date on which the conditions set forth in clauses (i)
or (ii) of Section 2.01 are not satisfied (including, without limitation, by
reason of the reduction of the Commitments pursuant to Section 2.09 or Section
2.10), the Borrower shall repay or prepay such principal amount of the
outstanding Loans, if any (together with interest accrued thereon and any amount
due under Section 8.05(a)), as may be necessary so that after such payment the
aggregate unpaid principal amount of the Loans does not exceed the aggregate
amount of the Commitments as then reduced. Each such payment or prepayment shall
be applied ratably to the Loans of the Banks outstanding on the date of payment
or prepayment in the following order of priority:(i) first, to Base Rate Loans;
(ii) secondly, to Euro-Dollar Loans; and (iii) lastly, to Money Market Loans,
except that to the extent any prepayment is required to cause the outstanding
balance of Money Market Loans not to exceed the Money Market Facility Limit
shall be applied to Money Market Loans.
SECTION 2.13. GENERAL PROVISIONS AS TO PAYMENTS.
(a) The Borrower shall make each payment of principal of, and
interest on, the Loans and of fees hereunder, without any setoff, counterclaim
or any deduction whatsoever, not later than 11:00 A.M. (Atlanta, Georgia time)
on the date when due, in Federal or other funds immediately available in
Atlanta, Georgia, to the Administrative Agent at its address referred to in
Section 9.01. The Administrative Agent will promptly distribute to each Bank its
ratable share of each such payment received by the Administrative Agent for the
account of the Banks.
(b) Whenever any payment of principal of, or interest on, the
Base Rate Loans, Money Market Loans or of fees hereunder shall be due on a day
which is not a Domestic Business Day, the date for payment thereof shall be
extended to the next succeeding Domestic
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<PAGE> 37
Business Day. Whenever any payment of principal of or interest on, the
Euro-Dollar Loans shall be due on a day which is not a Euro-Dollar Business Day,
the date for payment thereof shall be extended to the next succeeding
Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another
calendar month, in which case the date for payment thereof shall be the next
preceding Euro-Dollar Business Day.
(c) All payments of principal, interest and fees and all other
amounts to be made by the Borrower pursuant to this Agreement with respect to
any Loan or fee relating thereto shall be paid without deduction for, and free
from, any tax, imposts, levies, duties, deductions, or withholdings of any
nature now or at anytime hereafter imposed by any governmental authority or by
any taxing authority thereof or therein excluding in the case of each Bank,
taxes imposed on or measured by its net income, and franchise taxes imposed on
it, by the jurisdiction under the laws of which such Bank is organized or any
political subdivision thereof and, in the case of each Bank, taxes imposed on
its income, and franchise taxes imposed on it, by the jurisdiction of such
Bank's applicable Lending Office or any political subdivision thereof (all such
non-excluded taxes, imposts, levies, duties, deductions or withholdings of any
nature being "Taxes"). In the event that the Borrower is required by applicable
law to make any such withholding or deduction of Taxes with respect to any Loan
or fee or other amount, the Borrower shall pay such deduction or withholding to
the applicable taxing authority, shall promptly furnish to any Bank in respect
of which such deduction or withholding is made all receipts and other documents
evidencing such payment and shall pay to such Bank additional amounts as may be
necessary in order that the amount received by such Bank after the required
withholding or other payment shall equal the amount such Bank would have
received had no such withholding or other payment been made. If no withholding
or deduction of Taxes are payable in respect to any Loan or fee relating
thereto, the Borrower shall furnish any Bank, at such Bank's request, a
certificate from each applicable taxing authority or an opinion of counsel
acceptable to such Bank, in either case stating that such payments are exempt
from or not subject to withholding or deduction of Taxes. If the Borrower fails
to provide such original or certified copy of a receipt evidencing payment of
Taxes or certificate(s) or opinion of counsel of exemption, the Borrower hereby
agrees to compensate such Bank for, and indemnify them with respect to, the tax
consequences of the Borrower's failure to provide evidence of tax payments or
tax exemption.
Each Bank which is not organized under the laws of the United
States or any state thereof agrees, as soon as practicable after receipt by it
of a request by the Borrower to do so, to file all appropriate forms and take
other appropriate action to obtain a certificate or other appropriate document
from the appropriate governmental authority in the jurisdiction imposing the
relevant Taxes, establishing that it is entitled to receive payments of
principal and interest under this Agreement and the Notes without deduction and
free from withholding of any Taxes imposed by such jurisdiction; provided that
if it is unable, for any reason, to establish such exemption, or to file such
forms and, in any event, during such period of time as such request for
exemption is pending, the Borrower shall nonetheless remain obligated under the
terms of the immediately preceding paragraph.
If the an officer of the Administrative Agent or any Bank
having responsibility for the administration of this Agreement and the
transactions hereunder shall obtain actual knowledge that the Administrative
Agent or such Bank is entitled to a refund in respect of Taxes
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<PAGE> 38
for which it has been indemnified by the Borrower pursuant to this Section, the
Administrative Agent or such Bank shall promptly notify the Borrower of the
availability of such refund and shall, within 30 days after receipt of a written
request by the Borrower, apply for such refund at the Borrower's sole cost and
expense. In the event any Bank receives a refund of any Taxes paid by the
Borrower pursuant to this Section 2.13(c), it will pay to the Borrower the
amount of such refund promptly upon receipt thereof; provided that if at any
time thereafter it is required to return such refund, the Borrower shall
promptly repay to it the amount of such refund.
Before seeking any compensation pursuant to this Section, such
Bank shall designate a different Lending Office if such designation will avoid
the need for seeking such compensation and will not, in the judgment of such
Bank, be otherwise disadvantageous to such Bank
Without prejudice to the survival of any other agreement of
the Borrower hereunder, the agreements and obligations of the Borrower and the
Banks contained in this Section 2.13(c) shall be applicable with respect to any
Participant, Assignee or other Transferee, and any calculations required by such
provisions (i) shall be made based upon the circumstances of such Participant,
Assignee or other Transferee, and (ii) constitute a continuing agreement and
shall survive the termination of this Agreement and the payment in full or
cancellation of the Notes.
SECTION 2.14. COMPUTATION OF INTEREST AND FEES.
Interest on all types of Loans shall be computed on the basis
of a year of 360 days and paid for the actual number of days elapsed, calculated
as to each Interest Period from and including the first day thereof to but
excluding the last day thereof. Commitment fees and any other fees payable
hereunder shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the last
day).
ARTICLE III.
CONDITIONS TO BORROWINGS
SECTION 3.01. CONDITIONS TO FIRST BORROWING.
The obligation of each Bank to make a Loan on the occasion of
the first Borrowing is subject to the satisfaction of the conditions set forth
in Section 3.02 and receipt by the Administrative Agent of the following (as to
the documents described in paragraphs (a),(c), (d)and (e) below, in sufficient
number of counterparts for delivery of a counterpart to each Bank and retention
of one counterpart by the Administrative Agent):
(a) from each of the parties hereto of either (i) a duly
executed counterpart of this Agreement signed by such party or (ii) a
facsimile transmission of such executed counterpart, with the original
to be sent to the Administrative Agent by overnight courier);
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<PAGE> 39
(b) a duly executed Syndicated Loan Note and a duly executed
Money Market Loan Note for the account of each Bank complying with the
provisions of Section 2.05, a Guaranty, duly executed by the Guarantors
and a Contribution Agreement, duly executed by the Borrower and the
Guarantors;
(c) an opinion letter (together with any opinions of local
counsel relied on therein) of Alston & Bird LLP, counsel for the
Borrower and the Guarantors, dated as of the Closing Date,
substantially in the form of Exhibit B and covering such additional
matters relating to the transactions contemplated hereby as the
Administrative Agent or any Bank may reasonably request;
(d) an opinion of Jones, Day, Reavis & Pogue, special counsel
for the Administrative Agent, dated as of the Closing Date,
substantially in the form of Exhibit C and covering such additional
matters relating to the transactions contemplated hereby as the
Administrative Agent may reasonably request;
(e) a certificate (the "Closing Certificate") substantially in
the form of Exhibit G), dated as of the Closing Date, signed by a
principal financial officer of the Borrower, to the effect that (i) no
Default has occurred and is continuing on the date of the first
Borrowing and (ii) the representations and warranties of the Borrower
contained in Article IV are true on and as of the date of the first
Borrowing hereunder;
(f) all documents which the Administrative Agent or any Bank
may reasonably request relating to the existence of the Borrower, the
corporate authority for and the validity of this Agreement and the
Notes, and any other matters relevant hereto, all in form and substance
satisfactory to the Administrative Agent, including, without
limitation, (A) a certificate of the Borrower substantially in the form
of Exhibit H (the "Officer's Certificate"), signed by the Secretary or
an Assistant Secretary of the Borrower, certifying as to the names,
true signatures and incumbency of the officer or officers of the
Borrower authorized to execute and deliver the Loan Documents, and
certified copies of the following items: (i) the Borrower's Certificate
of Incorporation, (ii) the Borrower's Bylaws, (iii) a certificate of
the Secretary of State of the State of Georgia as to the good standing
of the Borrower as a Georgia corporation, and (iv) the action taken by
the Board of Directors of the Borrower authorizing the Borrower's
execution, delivery and performance of this Agreement, the Notes and
the other Loan Documents to which the Borrower is a party, and (B) from
each Guarantor, a similar Officer's Certificate, signed by the
Secretary or an Assistant Secretary of such Guarantor, containing
similar certifications as above as to such Guarantor and the Guaranty
and Contribution Agreement;
(g) a Notice of Borrowing or notification pursuant to Section
2.03(e) of acceptance of one or more Money Market Quotes, as
applicable;
(h) receipt of the initial Borrowing Base Certificate, showing
the Borrowing Base as of last day of the Fiscal Quarter ending prior to
the Closing Date;
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<PAGE> 40
(i) payment to the Administrative Agent of all fees payable on
the Closing Date under the Arrangers' Letter Agreement; and
(j) payment of all amounts payable under and termination of
the Credit Agreement dated September 9, 1998, as amended as of the
Closing Date, by and among the Borrower, Bank of America, N.A, as
Administrative Agent, and the Banks parties thereto.
In addition, if the Borrower desires funding of a Fixed Rate
Loan on the Closing Date, the Administrative Agent shall have received, the
requisite number of days prior to the Closing Date, a Funding Indemnification
Letter.
SECTION 3.02. CONDITIONS TO ALL BORROWINGS.
The obligation of each Bank to make a Syndicated Loan on the
occasion of each Borrowing is subject to the satisfaction of the following
conditions:
(a) receipt by the Administrative Agent of a Notice of
Borrowing or notification pursuant to Section 2.03(e) of acceptance of
one or more Money Market Quotes, as applicable.
(b) the fact that, immediately before and after such
Borrowing, no Default shall have occurred and be continuing;
(c) the fact that the representations and warranties of the
Borrower contained in Article IV of this Agreement shall be true on and
as of the date of such Borrowing (except to the extent any such
representation or warranty is expressly made as of a prior date); and
(d) the fact that, immediately after such Borrowing, the
conditions set forth in clauses (i) and (ii) of Section 2.01 shall have
been satisfied.
Each Syndicated Borrowing, each Money Market Borrowing and
each Notice of Continuation or Conversion hereunder shall be deemed to be a
representation and warranty by the Borrower on the date of such Borrowing as to
the truth and accuracy of the facts specified in paragraphs (b), (c) and (d) of
this Section; provided, that if such Borrowing is a Syndicated Borrowing which
consists solely of a Refunding Loan then, (i) if such Borrowing is a Fixed Rate
Borrowing or such Notice of Continuation or Conversion is to a Fixed Rate Loan,
such Borrowing or Notice of Continuation or Conversion shall be deemed to be
such a representation and warranty by the Borrower only as to the matters set
forth in paragraphs (b) and (d) above, and (ii) if such Borrowing is a Base Rate
borrowing, or such Notice of Continuation or Conversions is to a Base Rate Loan,
such Borrowing or Notice of Continuation or Conversion shall be deemed to be a
representation and warranty by the Borrower only as to the matters set forth in
paragraph (d) above.
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<PAGE> 41
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
The Borrower and (by incorporation by reference in the
Guaranty) the Guarantors, as expressly stated, each represents and warrants
that:
SECTION 4.01. CORPORATE EXISTENCE AND POWER.
The Borrower and each Guarantor is a corporation, partnership
or other legal entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, is duly qualified to
transact business in every jurisdiction where, by the nature of its business,
such qualification is necessary other than such qualifications the failure to
obtain which would not result in a Material Adverse Effect, and has all powers
and all governmental licenses, authorizations, consents and approvals required
to carry on its business as now conducted, except for such licenses,
authorizations, consents and approvals, the failure to obtain which, would not
result in a Material Adverse Effect.
SECTION 4.02. CORPORATE AND GOVERNMENTAL AUTHORIZATION; NO
CONTRAVENTION.
The execution, delivery and performance by the Borrower of
this Agreement, the Notes and the other Loan Documents, and by each Guarantor of
the Guaranty and Contribution Agreement and, upon consummation of the Top Level
Reorganization, of the Joinder Agreement, the new Notes and the Contribution
Agreement in accordance with Section 5.28, (i) are within the Borrower's or such
Guarantor's or the Parent's powers, (ii) have been duly authorized by all
necessary corporate action, (iii) require no action by or in respect of or
filing with, any governmental body, agency or official, (iv) do not contravene,
or constitute a default under, any provision of applicable law or regulation or
of the certificate of incorporation or by-laws of the Borrower, such Guarantor
or the Parent or of any agreement, judgment, injunction, order, decree or other
instrument binding upon the Borrower, any of its Subsidiaries or the Parent,
except those as to which consents or waivers have been obtained, and (v) do not
result in the creation or imposition of any Lien on any asset of the Borrower,
any of its Subsidiaries or the Parent.
SECTION 4.03. BINDING EFFECT.
This Agreement constitutes a valid and binding agreement of
the Borrower and, upon consummation of the Top Level Reorganization, the Parent,
enforceable in accordance with its terms, and the Notes and the other Loan
Documents, when executed and delivered by the Borrower, and, upon consummation
of the Top Level Reorganization, the Parent, and each Guarantor which is a party
thereto in accordance with this Agreement, will constitute valid and binding
obligations of the Borrower, the Parent and such Guarantor enforceable in
accordance with their respective terms, provided that the enforceability hereof
and thereof is subject in each case to general principles of equity and to
bankruptcy, insolvency and similar laws affecting the enforcement of creditors'
rights generally.
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SECTION 4.04. FINANCIAL INFORMATION.
(a) The consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of December 31, 1998 and the related consolidated
statements of income, shareholders' equity and cash flows for the Fiscal Year
then ended, reported on by Arthur Andersen LLP, copies of which have been
delivered to each of the Banks, and the unaudited consolidated financial
statements of the Borrower for the interim period ended June 30, 1999, copies of
which have been delivered to each of the Banks, fairly present, in conformity
with GAAP, except, in the case of unaudited financial statements, for year-end
adjustments and the absence of notes, the consolidated financial position of the
Borrower and its Consolidated Subsidiaries as of such dates and their
consolidated results of operations and cash flows for such periods stated.
(b) Since December 31, 1998, there has been no event, act,
condition or occurrence having a Material Adverse Effect.
SECTION 4.05. NO LITIGATION.
There is no action, suit or proceeding pending, or to the
knowledge of the Borrower and the Guarantors threatened, against or affecting
the Borrower or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official which could have a Material Adverse Effect
or which in any manner draws into question the validity of or could impair the
ability of the Borrower or any Guaranty to perform its obligations under, this
Agreement, the Notes or any of the other Loan Documents to which it is a party.
SECTION 4.06. COMPLIANCE WITH ERISA.
(a) The Borrower/Parent and each member of the Controlled
Group have fulfilled their obligations under the minimum funding standards of
ERISA and the Code with respect to each Plan and are in compliance in all
material respects with the presently applicable provisions of ERISA and the
Code, and have not incurred any liability to the PBGC or a Plan under Title IV
of ERISA.
(b) Neither the Borrower/Parent nor any member of the
Controlled Group is or ever has been obligated to contribute to any
Multiemployer Plan.
SECTION 4.07. COMPLIANCE WITH LAWS; PAYMENT OF TAXES.
The Borrower/Parent and its Subsidiaries are in material
compliance with all applicable laws, regulations and similar requirements of
governmental authorities, except where such compliance is being contested in
good faith through appropriate proceedings. There have been filed on behalf of
the Borrower/Parent and its Subsidiaries all material Federal, state and local
income, excise, property and other material tax returns which are required to be
filed by them and all taxes due pursuant to such returns or pursuant to any
assessment received by or on behalf of the Borrower/Parent or any Subsidiary
have been paid, except for those taxes which are being contested in good faith
by appropriate proceedings for which adequate reserves have been established in
accordance with GAAP. The charges, accruals and reserves on the books of the
Borrower/Parent and its Subsidiaries in respect of taxes or other governmental
charges are, in the
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<PAGE> 43
opinion of the Borrower/Parent, adequate. United States income tax returns of
the Borrower and its Subsidiaries have been audited and closed through the
Fiscal Year ended December 31, 1992.
SECTION 4.08. SUBSIDIARIES.
Each of the Borrower/Parent's Subsidiaries is a corporation,
partnership or other legal entity duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization, is duly qualified
to transact business in every jurisdiction where, by the nature of its business,
such qualification is necessary other than such qualifications the failure to
obtain which would not result in a Material Adverse Effect, and has all powers
and all governmental licenses, authorizations, consents and approvals required
to carry on its business as now conducted except for such licenses,
authorizations, consents and approvals, the failure to obtain which, would not
result in a Material Adverse Effect. As of the Closing Date, the Borrower has no
Subsidiaries except for those Subsidiaries listed on Schedule 4.08, which
accurately sets forth each such Subsidiary's complete name and jurisdiction of
organization.
SECTION 4.09. INVESTMENT COMPANY ACT.
Neither the Borrower/Parent nor any of its Subsidiaries is an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
SECTION 4.10. PUBLIC UTILITY HOLDING COMPANY ACT.
Neither the Borrower/Parent nor any of its Subsidiaries is a
"holding company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company", as such terms are defined in the Public Utility Holding Company Act of
1935, as amended.
SECTION 4.11. OWNERSHIP OF PROPERTY; LIENS.
Each of the Borrower/Parent and its Consolidated Subsidiaries
has title to its properties sufficient for the conduct of its business, and none
of such property is subject to any Lien except as permitted in Section 5.17.
SECTION 4.12. NO DEFAULT.
To the Borrower and the Parent's knowledge, neither the
Borrower nor the Parent nor any of the Consolidated Subsidiaries is in default
under or with respect to any agreement, instrument or undertaking to which it is
a party or by which it or any of its property is bound which could reasonably be
expected to have or cause a Material Adverse Effect. No Default or Event of
Default has occurred and is continuing.
SECTION 4.13. FULL DISCLOSURE.
All information heretofore furnished by the Borrower or the
Parent to the Administrative Agent or any Bank for purposes of or in connection
with this Agreement or any transaction contemplated hereby is, and all such
information hereafter furnished by the Borrower or the Parent to the
Administrative Agent or any Bank will be, true, accurate and complete in
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<PAGE> 44
every material respect or based on reasonable estimates on the date as of which
such information is stated or certified. The Borrower and the Parent have
disclosed to the Banks in writing any and all facts which could have or cause a
Material Adverse Effect.
SECTION 4.14. ENVIRONMENTAL MATTERS.
To the knowledge of the Borrower/Parent, except as set forth
in Schedule 4.14, and except to the extent not causing or which reasonably could
not be expected to cause a Material Adverse Effect:
(a) Neither the Borrower/Parent nor any Subsidiary is subject
to any Environmental Liability and neither the Borrower/Parent nor any
Subsidiary has been designated as a potentially responsible party under CERCLA
or under any state statute similar to CERCLA. None of the Properties has been
identified or proposed for inclusion on any (i) National Priorities List under
40 C.F.R. ss. 300, (ii) CERCLIS list or (iii) any list arising from a state
statute similar to CERCLA.
(b) No Hazardous Materials have been or are being used,
produced, manufactured, processed, treated, recycled, generated, stored,
disposed of, managed or otherwise handled at, or shipped or transported to or
from the Properties or are otherwise present at, on, in or under the Properties,
and no Hazardous Materials are or have been migrating to or from the Properties,
except for Hazardous Materials, such as cleaning solvents, pesticides and other
materials used, produced, manufactured, processed, treated, recycled, generated,
stored, disposed of, managed, or otherwise handled in the ordinary course of
business in compliance with all applicable Environmental Requirements.
(c) The Borrower/Parent and each of its Subsidiaries has
procured all Environmental Permits necessary for the conduct of its business,
and is in compliance with all Environmental Requirements in connection with the
operation of the Properties and the Borrower/Parent's, and each of its
Subsidiary's, respective businesses.
SECTION 4.15. CAPITAL STOCK.
All Capital Stock, debentures, bonds, notes and all other
securities of the Borrower/Parent and its Subsidiaries presently issued and
outstanding are validly and properly issued in accordance with all applicable
laws, including, but not limited to, the "Blue Sky" laws of all applicable
states and the federal securities laws. The issued shares of Capital Stock of
the Borrower/Parent's Wholly Owned Subsidiaries are owned by the Borrower/Parent
free and clear of any Lien or adverse claim, except as may be otherwise
permitted in Section 5.17. At least a majority of the issued shares of capital
stock of each of the Borrower/Parent's other Subsidiaries (other than Wholly
Owned Subsidiaries) is owned by the Borrower/Parent free and clear of any Lien
or adverse claim, except as may be otherwise permitted in Section 5.17.
SECTION 4.16. MARGIN STOCK.
Neither the Borrower/Parent nor any of its Subsidiaries is
engaged principally, or as one of its important activities, in the business of
purchasing or carrying any Margin Stock, and no part of the proceeds of any Loan
will be used to purchase or carry any Margin Stock in
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violation of the provisions of Regulation T, U or X or to extend credit to
others for the purpose of purchasing or carrying any Margin Stock in violation
of the provisions of Regulation T, U or X, or be used for any purpose which
violates, or which is inconsistent with, the provisions of Regulation T, U or X.
SECTION 4.17. INSOLVENCY.
After giving effect to the execution and delivery of the Loan
Documents and the making of the Loans under this Agreement: (i) the Borrower
will not (x) be "insolvent," within the meaning of such term as used in O.C.G.A.
ss. 18-2-22 or as defined in ss. 101 of the "Bankruptcy Code", or Section 2 of
either the "UFTA" or the "UFCA", or as defined or used in any "Other Applicable
Law" (as those terms are defined below), or (y) be unable to pay its debts
generally as such debts become due within the meaning of Section 548 of the
Bankruptcy Code, Section 4 of the UFTA or Section 6 of the UFCA, or (z) have an
unreasonably small capital to engage in any business or transaction, whether
current or contemplated, within the meaning of Section 548 of the Bankruptcy
Code, Section 4 of the UFTA or Section 5 of the UFCA; and (ii) the obligations
of the Borrower under the Loan Documents and with respect to the Loans will not
be rendered avoidable under any Other Applicable Law. For purposes of this
Section 4.17, "Bankruptcy Code" means Title 11 of the United States Code, "UFTA"
means the Uniform Fraudulent Transfer Act, "UFCA" means the Uniform Fraudulent
Conveyance Act, and "Other Applicable Law" means any other applicable law
pertaining to fraudulent transfers or acts voidable by creditors, in each case
as such law may be amended from time to time.
SECTION 4.18. INSURANCE.
The Borrower/Parent and each of its Subsidiaries has (either
in the name of the Borrower/Parent or in such Subsidiary's own name), with
financially sound and reputable insurance companies, insurance in at least such
amounts and against at least such risks (including on all its property, and
public liability and worker's compensation) as are usually insured against in
the same general area by companies of established repute engaged in the same or
similar business.
SECTION 4.19. Y2K PLAN.
The Borrower/Parent has developed and has delivered to the
Administrative Agent and the Banks a comprehensive plan (the "Y2K Plan") for
insuring that the Borrower/Parent's and its Subsidiaries' software and hardware
systems which impact or affect in any way the business operations of the
Borrower/Parent and its Subsidiaries' will be Year 2000 Compliant and Ready. The
Borrower/Parent and its Subsidiaries' have met the Y2K Plan milestones such that
all hardware and software systems will be Year 2000 Compliant and Ready in
accordance with the Y2K Plan on or before December 1, 1999.
SECTION 4.20. REAL ESTATE INVESTMENT TRUST.
The Borrower is qualified under the Code as a real estate
investment trust.
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ARTICLE V.
COVENANTS
The Borrower and (by incorporation by reference in the
Guaranty) the Guarantors (including the Parent, as to references to the Parent
and to the Guarantors), as expressly stated, each agrees that, so long as any
Bank has any Commitment hereunder or any amount payable hereunder or under any
Note remains unpaid:
SECTION 5.01. INFORMATION.
The Borrower and the Parent will deliver to each of the Banks:
(a) as soon as available and in any event within 90 days after
the end of each Fiscal Year, a consolidated balance sheet of the Borrower/Parent
and its Consolidated Subsidiaries as of the end of such Fiscal Year and the
related consolidated statements of income, shareholders' equity and cash flows
for such Fiscal Year, setting forth in each case in comparative form the figures
for the previous fiscal year, all certified by Arthur Andersen LLP or other
independent public accountants of nationally recognized standing, with such
certification to be free of exceptions and qualifications not acceptable to the
Required Banks;
(b) as soon as available and in any event within 45 days after
the end of each of the first 3 Fiscal Quarters of each Fiscal Year, a
consolidated balance sheet of the Borrower/Parent and its Consolidated
Subsidiaries as of the end of such Fiscal Quarter and the related consolidated
statement of income and statement of cash flows for such Fiscal Quarter and for
the portion of the Fiscal Year ended at the end of such Fiscal Quarter, setting
forth in each case in comparative form the figures for the corresponding Fiscal
Quarter and the corresponding portion of the previous Fiscal Year, all certified
(subject to normal year-end adjustments and without notes) as to fairness of
presentation, GAAP and consistency by the chief financial officer or the chief
accounting officer of the Borrower/Parent;
(c) simultaneously with the delivery of each set of financial
statements referred to in paragraphs (a) and (b) above, a certificate,
substantially in the form of Exhibit F (a "Compliance Certificate"), of the
chief financial officer or the chief accounting officer of the Borrower/Parent
(i) setting forth in reasonable detail the calculations required to establish
whether the Borrower/Parent was in compliance with the requirements of Sections
5.05, 5.15, 5.16 and Sections 5.19 through 5.25, inclusive on the date of such
financial statements and (ii) stating whether any Default exists on the date of
such certificate and, if any Default then exists, setting forth the details
thereof and the action which the Borrower/Parent is taking or proposes to take
with respect thereto;
(d) simultaneously with the delivery of each set of annual
financial statements referred to in paragraph (a) above, a statement of the firm
of independent public accountants which reported on such statements to the
effect that nothing has come to their attention to cause them to believe that
any Default existed on the date of such financial statements;
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(e) within 5 Domestic Business Days after an Executive Officer
of the Borrower or a comparable officer of the Parent obtains actual knowledge
of the occurrence of any Default, a certificate of the chief financial officer
or the chief accounting officer of the Borrower or Parent stating that it is a
"Notice of Default" and setting forth the details thereof and the action which
the Borrower or Parent is taking or proposes to take with respect thereto;
(f) promptly upon the mailing thereof to the shareholders of
the Borrower/Parent generally, copies of all financial statements, reports and
proxy statements so mailed;
(g) promptly upon the filing thereof, copies of all
registration statements (other than the exhibits thereto and any registration
statements on Form S-8 or its equivalent) and annual, quarterly or monthly
reports which the Borrower/Parent shall have filed with the Securities and
Exchange Commission;
(h) if and when any member of the Controlled Group (i) gives
or is required to give notice to the PBGC of any "reportable event" (as defined
in Section 4043 of ERISA) with respect to any Plan which might constitute
grounds for a termination of such Plan under Title IV of ERISA, or knows that
the plan administrator of any Plan has given or is required to give notice of
any such reportable event, a copy of the notice of such reportable event given
or required to be given to the PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA, a copy of such notice; or (iii)
receives notice from the PBGC under Title IV of ERISA of an intent to terminate
or appoint a trustee to administer any Plan, a copy of such notice;
(i) prior to January 1, 2000, within 5 Domestic Business Days
after the Borrower/Parent becomes aware of any deviations from the Y2K Plan
which would cause compliance with the Y2K Plan to be materially delayed or not
achieved, a statement of the Chief Executive Officer, Chief Financial Officer,
or Chief Technology Officer setting forth the details thereof and the action
which the Borrower/Parent is taking or proposes to take with respect thereto;
(j) prior to January 1, 2000, promptly upon the receipt
thereof, a copy of any third party assessments of the Borrower/Parent's Y2K Plan
together with any recommendations made by such third party with respect to Year
2000 compliance;
(k) within 60 days after the end of each Fiscal Quarter, and
more frequently, at the election of the Borrower, a Borrowing Base Certificate
as of the last day of the Fiscal Quarter just ended;
(l) simultaneously with the delivery of each set of financial
statements referred to in paragraphs (a) and (b) above, operating statements for
each Eligible Property for the period covered by such financial statements; and
(m) from time to time such additional information regarding
the financial position or business of the Borrower/Parent and its Subsidiaries
as the Administrative Agent, at the request of any Bank, may reasonably request.
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SECTION 5.02. INSPECTION OF PROPERTY, BOOKS AND RECORDS.
The Borrower and the Parent will (i) keep, and cause each
Subsidiary to keep, proper books of record and account in which full, true and
correct entries in conformity with GAAP shall be made of all dealings and
transactions in relation to its business and activities; and (ii) permit, and
cause each Subsidiary to permit, representatives of any Bank at such Bank's
expense prior to the occurrence of a Default and at the Borrower's expense after
the occurrence of a Default to visit and inspect any of their respective
properties, to examine and make abstracts from any of their respective books and
records and to discuss their respective affairs, finances and accounts with
their respective officers, employees and independent public accountants. The
Borrower and the Parent agree to cooperate and assist in such visits and
inspections, in each case at such reasonable times and as often as may
reasonably be desired, except that, prior to the occurrence of a Default, such
visits and inspections shall not occur more than once in any Fiscal Quarter.
SECTION 5.03. MAINTENANCE OF EXISTENCE.
Except as otherwise permitted herein, the Borrower and the
Parent shall, and shall cause each Subsidiary to, maintain its corporate
existence and carry on its business in substantially the same manner and in
substantially the same fields as such business is now carried on and maintained.
SECTION 5.04. DISSOLUTION.
Neither the Borrower, the Parent nor any of the Subsidiaries
shall suffer or permit dissolution or liquidation either in whole or in part or
redeem or retire any shares of its own stock or that of any Subsidiary, except
through corporate reorganization to the extent permitted by Section 5.05.
SECTION 5.05. CONSOLIDATIONS, MERGERS AND SALES OF ASSETS.
The Borrower and the Parent will not, nor will they permit any
Subsidiary to, consolidate or merge with or into, or sell, lease or otherwise
transfer all or any substantial part of its assets to, any other Person, or
discontinue or eliminate any business line or segment, provided that (a) the Top
Level Reorganization may be consummated, subject to satisfaction of the Top
Level Reorganization Conditions, and the Borrower may merge with another Person
if (i) such Person was organized under the laws of the United States of America
or one of its states, (ii) the Borrower is the corporation surviving such merger
and (iii) immediately after giving effect to such merger, no Default shall have
occurred and be continuing, (b) Subsidiaries of the Borrower/Parent may merge
with one another, and with the Borrower (c) Subsidiaries of the Borrower/Parent
may merge with any other Person, so long as (i) such Person was organized under
the laws of the United States of America or one of its states (ii) such Person
shall become a Subsidiary immediately upon consummation of such merger (and if
the merging Subsidiary was a Guarantor and is not the corporation surviving such
merger, such Person shall comply with Section 5.27) and (iii) immediately after
giving effect to such merger, no Default shall have occurred and be continuing,
and (d) the foregoing limitation on the sale, lease or other transfer of assets
and on the discontinuation or elimination of a business line or segment shall
not prohibit,
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(A) sales, leases or transfers of assets between Guarantors or between any
Guarantor and the Borrower, or transfers pursuant to the Top Level
Reorganization, subject to satisfaction of the Top Level Reorganization
conditions, or (B) during any Fiscal Quarter, a transfer of assets or the
discontinuance or elimination of a business line or segment (in a single
transaction or in a series of related transactions) unless the aggregate assets
to be so transferred or utilized in a business line or segment to be so
discontinued, when combined with all other assets transferred, and all other
assets utilized in all other business lines or segments discontinued, during
such Fiscal Quarter and the immediately preceding 3 Fiscal Quarters, either (x)
constituted more than 15% of Consolidated Total Assets at the end of the most
recent Fiscal Year immediately preceding such Fiscal Quarter, or (y) contributed
more than 15% of Consolidated Operating Profits during the 4 Fiscal Quarters
immediately preceding such Fiscal Quarter.
In the case of any Subsidiary which transfers all or a substantial part of its
assets pursuant to clause (c) of the preceding sentence, and in the case of any
Subsidiary the stock or other ownership interests in which are being sold and
with respect to which clause (c) would have been satisfied if the transaction
had been a sale of assets of such Subsidiary, such Subsidiary shall be released
from its obligations under the Guaranty (if it has become a party thereto) and,
in the case of a transaction involving a sale of assets, such Subsidiary may
dissolve.
SECTION 5.06. USE OF PROCEEDS.
Proceeds of the Loans may be used for construction financing,
acquisitions and general working capital purposes; provided, that no portion of
the proceeds of the Loans will be used by the Borrower/Parent or any Subsidiary
(i) in connection with, whether directly or indirectly, any tender offer for, or
other acquisition of, stock of any corporation with a view towards obtaining
control of such other corporation, unless such tender offer or other acquisition
is to be made on a negotiated basis with the approval of the Board of Directors
of the Person to be acquired, and the provisions of Section 5.16 would not be
violated, (ii) directly or indirectly, for the purpose, whether immediate,
incidental or ultimate, of purchasing or carrying any Margin Stock in violation
of Regulations T, U or X, or (iii) for any purpose in violation of any
applicable law or regulation.
SECTION 5.07. COMPLIANCE WITH LAWS; PAYMENT OF TAXES.
The Borrower and the Parent will, and will cause each of the
Subsidiaries and each member of the Controlled Group to, comply with applicable
laws (including but not limited to ERISA), regulations and similar requirements
of governmental authorities (including but not limited to PBGC), except where
the necessity of such compliance is being contested in good faith through
appropriate proceedings diligently pursued and except where noncompliance with
any such applicable laws, regulations and similar requirements could not
reasonably be expected to result in a Material Adverse Effect. The Borrower and
the Parent will, and will cause each of the Subsidiaries to, pay promptly when
due all taxes, assessments, governmental charges, claims for labor, supplies,
rent and other obligations which, if unpaid, might become a lien against the
property of the Borrower, the Parent or any Subsidiary, except liabilities being
contested in good faith and against which, if requested by the Administrative
Agent, the Borrower/Parent will set up reserves in accordance with GAAP.
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SECTION 5.08. INSURANCE.
The Borrower and the Parent will maintain, and will cause each
of the Subsidiaries to maintain (either in the name of the Borrower, the Parent
or in such Subsidiary's own name), with financially sound and reputable
insurance companies, insurance on all its property in at least such amounts and
against at least such risks (including on all its property, and public liability
and worker's compensation) as are usually insured against in the same general
area by companies of established repute engaged in the same or similar business.
SECTION 5.09. CHANGE IN FISCAL YEAR.
The Borrower/Parent will not change its Fiscal Year without
the consent of the Required Banks.
SECTION 5.10. MAINTENANCE OF PROPERTY.
Except as permitted hereunder, the Borrower and the Parent
shall, and shall cause each Subsidiary to, maintain all of its properties and
assets in good condition, repair and working order, ordinary wear and tear,
casualty and condemnation excepted.
SECTION 5.11. ENVIRONMENTAL NOTICES.
Except to the extent which would not reasonably be expected to
cause a Material Adverse Effect, the Borrower and the Parent shall furnish to
the Banks and the Administrative Agent prompt written notice of all
Environmental Liabilities, pending or threatened Environmental Proceedings,
Environmental Notices, Environmental Judgments and Orders, and Environmental
Releases at, on, in, under or in any way affecting the Properties, and all
facts, events, or conditions that could reasonably be expected to lead to any of
the foregoing.
SECTION 5.12. ENVIRONMENTAL MATTERS.
The Borrower, the Parent and the Subsidiaries will not, and
will not permit any Third Party to, use, produce, manufacture, process, treat,
recycle, generate, store, dispose of, manage at, or otherwise handle, or ship or
transport to or from the Properties any Hazardous Materials except for Hazardous
Materials such as cleaning solvents, pesticides and other similar materials
used, produced, manufactured, processed, treated, recycled, generated, stored,
disposed, managed, or otherwise handled in the ordinary course of business in
compliance with all applicable Environmental Requirements.
SECTION 5.13. ENVIRONMENTAL RELEASE.
The Borrower and the Parent agree that upon the occurrence of
an Environmental Release at or on any of the Properties it will comply with all
applicable Environmental Requirements to investigate the extent of, and to take
appropriate remedial action to eliminate, such Environmental Release, whether or
not ordered or otherwise directed to do so by any Environmental Authority.
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SECTION 5.14. TRANSACTIONS WITH AFFILIATES.
Neither the Borrower, the Parent nor any of the Subsidiaries
shall enter into, or be a party to, any transaction with any Affiliate of the
Borrower or such Subsidiary (which Affiliate is not the Borrower, the Parent or
a Wholly Owned Subsidiary), except as permitted by law and in the ordinary
course of business and pursuant to reasonable terms which are no less favorable
to Borrower or such Subsidiary than would be obtained in a comparable arm's
length transaction with a Person which is not an Affiliate.
SECTION 5.15. RESTRICTED PAYMENTS.
The Borrower's/Parent's Restricted Payments in any calendar
year shall not exceed (i) as to purchases of Capital Stock in connection with
any Stock Buyback Plan, acquisition of shares in any 12 month period in excess
of 10% of all of the Borrower/Parent's Capital Stock outstanding at the
beginning of such period, and (ii) as to other Restricted Payments, 95% of Funds
From Operations for such period.
SECTION 5.16. INVESTMENTS.
Neither the Borrower, the Parent nor any of the Subsidiaries
shall make Investments in any Person except (i) loans or advances to employees
not exceeding $10,000,000 in the aggregate principal amount outstanding at any
time, in each case made in the ordinary course of business and consistent with
practices existing on December 31, 1998; (ii) deposits required by government
agencies or public utilities, (ii) Investments in direct obligations of the
United States Government maturing within one year, (iii) Investments in
certificates of deposit issued by a commercial bank whose credit is satisfactory
to the Administrative Agent, (iv) Investments in commercial paper rated A1 or
the equivalent thereof by S&P or P1 or the equivalent thereof by Moody's and in
either case maturing within 6 months after the date of acquisition, (v)
Investments in tender bonds the payment of the principal of and interest on
which is fully supported by a letter of credit issued by a United States bank
whose long-term certificates of deposit are rated at least AA or the equivalent
thereof by S&P and Aa or the equivalent thereof by Moody's, (vi) Investments
existing on the Closing Date, (vii) Investments in Guarantors (or in any Person
which, upon the making of such Investment, becomes a Guarantor pursuant to
Section 5.27) and (viii) other Investments which do not at any time exceed an
aggregate amount outstanding equal to (1) at any time during which the
Borrower's Debt Rating is both BBB or better by S&P and Baa2 or better by
Moody's 20% of Consolidated Total Assets, and (2) at any other time, 15% of
Consolidated Total Assets; provided, however, immediately after giving effect to
the making of any Investment, no Default shall have occurred and be continuing.
SECTION 5.17. LIENS.
Neither the Borrower, the Parent nor any Consolidated
Subsidiary will create, assume or suffer to exist any Lien on any asset now
owned or hereafter acquired by it, except:
(a) Subject to Section 5.21, Liens existing on the date of
this Agreement securing Debt outstanding on the date of this Agreement
in an aggregate principal amount not exceeding $127,000,000;
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(b) Subject to Section 5.21, any Lien existing on any specific
fixed asset of any Person at the time such Person becomes a
Consolidated Subsidiary and not created in contemplation of such event;
(c) Subject to Section 5.21, any Lien on any specific fixed
asset securing Debt incurred or assumed for the purpose of financing
all or any part of the cost of acquiring or constructing such asset,
provided that such Lien attaches to such asset concurrently with or
within 18 months after the acquisition or completion of construction
thereof;
(d) Subject to Section 5.21, any Lien on any specific fixed
asset of any corporation existing at the time such corporation is
merged or consolidated with or into the Borrower, the Parent or a
Consolidated Subsidiary and not created in contemplation of such event;
(e) Subject to Section 5.21, any Lien existing on any specific
fixed asset prior to the acquisition thereof by the Borrower, the
Parent or a Consolidated Subsidiary and not created in contemplation of
such acquisition;
(f) Liens securing Debt owing by any Subsidiary to the
Borrower or the Parent;
(g) any Lien arising out of the refinancing, extension,
renewal or refunding of any Debt secured by any Lien permitted by any
of the foregoing paragraphs of this Section, provided that (i) such
Debt is not secured by any additional assets, and (ii) the amount of
such Debt secured by any such Lien is not increased;
(h) Liens incidental to the conduct of its business or the
ownership of its assets which (i) do not secure Debt and (ii) do not in
the aggregate materially detract from the value of its assets or
materially impair the use thereof in the operation of its business;
(i) any Lien on Margin Stock; and
(j) Liens not otherwise permitted by the foregoing paragraphs
of this Section securing Debt (other than indebtedness represented by
the Notes), but permitted by Section 5.21.
SECTION 5.18. RESTRICTIONS ON ABILITY OF SUBSIDIARIES TO PAY
DIVIDENDS.
The Borrower and the Parent shall not permit any Subsidiary
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any encumbrance or restriction on the ability of any such
Subsidiary to (i) pay any Dividends or make any other distributions on its
Capital Stock or any other interest or (ii) make or repay any loans or advances
to the Borrower, the Parent or other parent of such Subsidiary.
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SECTION 5.19. ADDITIONAL DEBT.
Neither the Borrower, the Parent nor any Subsidiary will
create, incur, assume or suffer to exist any Debt except (i) Debt in existence
on the Closing Date; (ii) Debt of any Guarantor to the Borrower or to any other
Guarantor, (iii) other unsecured revolving credit in an aggregate outstanding
principal amount not at any time exceeding $15,000,000, (iv) publicly held debt
having a maturity later than the Termination Date, and (v) other Debt which is
privately held and which does not constitute revolving credit (including Debt
included in Consolidated Total Secured Debt, so long as it is not revolving
credit, and subject to the provisions of Sections 5.17 and 5.21).
SECTION 5.20. RATIO OF CONSOLIDATED TOTAL LIABILITIES TO
CONSOLIDATED TOTAL ASSET VALUE.
The ratio of Consolidated Total Liabilities to Consolidated
Total Asset Value shall at all times be equal to or less than 0.55 to 1.0.
SECTION 5.21. RATIO OF CONSOLIDATED TOTAL SECURED DEBT TO
CONSOLIDATED TOTAL ASSET VALUE.
The ratio of Consolidated Total Secured Debt to Consolidated
Total Asset Value shall at all times be equal to or less than 0.35 to 1.0.
SECTION 5.22. RATIO OF CONSOLIDATED EBITDA TO CONSOLIDATED
INTEREST EXPENSE.
The ratio of Consolidated EBITDA to Consolidated Interest
Expense actually incurred for the Fiscal Quarter just ended will not be less
than 2.0 to 1.0.
SECTION 5.23. RATIO OF CONSOLIDATED UNENCUMBERED REAL ESTATE
ASSETS TO CONSOLIDATED UNSECURED SENIOR DEBT.
The ratio of Consolidated Unencumbered Real Estate Assets to
Consolidated Unsecured Senior Debt shall at all times be greater than 1.65 to
1.00.
SECTION 5.24. RATIO OF CONSOLIDATED UNENCUMBERED NET OPERATING
INCOME TO CONSOLIDATED UNSECURED INTEREST EXPENSE.
The ratio of Consolidated Unencumbered Net Operating Income to
Consolidated Unsecured Interest Expense shall at all times be greater than 2.0
to 1.00.
SECTION 5.25. RATIO OF CONSOLIDATED EBITDA TO CONSOLIDATED
FIXED CHARGES.
The ratio of Consolidated EBITDA to Consolidated Fixed
Charges, in each case for the Fiscal Quarter just ended and the 3 immediately
preceding Fiscal Quarters, shall at all times exceed 1.5 to 1.00.
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SECTION 5.26. Y2K COMPLIANCE.
The Borrower/Parent will meet the milestones contained in the
Y2K Plan and will have all hardware and software systems Year 2000 Compliant and
Ready (including all internal and external testing) on or before December 1,
1999.
SECTION 5.27. SIGNIFICANT SUBSIDIARIES TO BE GUARANTORS;
ELECTION TO BECOME GUARANTOR.
Any Subsidiary (whether existing on the Closing Date or
acquired or created thereafter), subject to Section 5.28, as to IRT Partners
L.P. (i) must become a Guarantor promptly upon becoming a Significant
Subsidiary, and (ii) may elect to become a Guarantor at any time if it is not a
Significant Subsidiary, in each case by (x) executing and delivering to the
Administrative Agent a counterpart of the Guaranty and a counterpart of the
Contribution Agreement, thereby becoming a party to each of them, (y) delivering
to the Administrative Agent an opinion of counsel to such Subsidiary, in form
and substance satisfactory to the Administrative Agent in its reasonable
discretion, the form attached hereto as Exhibit B (being one such satisfactory
form, but limited to such Subsidiary, and making appropriate modifications, and
(z) delivering to the Administrative Agent documents pertaining to the
Subsidiary reasonably requested by the Administrative Agent of the types
described in paragraph (f) of Section 3.01 (but making appropriate
modifications).
SECTION. 5.28. TOP LEVEL REORGANIZATION.
The Borrower currently anticipates accomplishing a corporate
reorganization at the top level of the corporate structure. Pursuant to such
reorganization, the following steps would be accomplished: (1) a new corporation
("Newco") would be created, which initially would be, directly or indirectly,
wholly owned by IRT Property Company, and to which IRT Property Company would
transfer all of its 1% general partnership interest in IRT Partners L.P.; (2)
IRT Property Company would be merged into IRT Partners L.P. through one or a
series of mergers, with IRT Partners L.P. being the surviving entity, (3) the
name of Newco would be changed to "IRT Property Company" (from and after the
consummation of the Top Level Reorganization, as defined below, Newco is
referred to as the "Parent" for all purposes under the Credit Agreement and the
other Loan Documents), and (4) the capital stock of the Parent would be or would
be deemed to be exchanged for the capital stock of IRT Property Company, so
that, after giving effect to the foregoing steps (the completion of all such
steps being the "Top Level Reorganization"), the Parent would be a public
company which would be a holding company and own, directly or indirectly, in
excess of 90% of the capital stock of IRT Partners L.P., which would become a
Subsidiary. The Administrative Agent and the Banks hereby consent to the Top
Level Reorganization and the transfers and other transactions contemplated
thereby, so long as each of the following conditions is satisfied (collectively,
the "Top Level Reorganization Conditions"):
(i) IRT Partners L.P., as the surviving entity of the merger,
shall become the "Borrower" for all purposes hereunder, and shall
execute and deliver to the Administrative Agent, (x) a Joinder
Agreement in substantially the form attached hereto as Exhibit Q,
thereby obtaining all of the rights and assuming all of the obligations
of the "Borrower" hereunder and under the Notes and the other Loan
Documents (other than the Guaranty), (ii) a new Syndicated Loan Note
and a new Money Market Loan Note for
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each Bank, which new Notes will be distributed to the Banks in exchange
for the original Notes, which shall be surrendered for cancellation;
(ii) IRT Partners L.P. shall be released from the Guaranty,
and shall no longer be a Guarantor (but shall remain a party to the
Contribution Agreement);
(iii) The Parent shall execute a counterpart of the Guaranty
and the Contribution Agreement, and shall become a joint and several
Guarantor for all purposes hereunder and under the Guaranty;
(iv) IRT Partners L.P. and the Parent shall deliver to the
Administrative Agent documents of the types described in Section
3.01(f) and an opinion of counsel similar to Exhibit B, but in each
case pertaining and referring to such Joinder Agreement and the Notes
and the other Loan Documents (and the binding effect of this Agreement
and the Notes as a result thereof), as to IRT Partners L.P., and the
Guaranty (including, without limitation the representations and
warranties of the Parent contained in Articles IV and V hereof, which
are incorporated in the Guaranty), as to the Parent; and
(v) The Top Level Reorganization and each of the conditions
set forth in clauses (i) through (iv) above shall have been completed
and consummated on or before 15 months after the Closing Date, at a
time when no Default or Event of Default is in existence.
ARTICLE VI.
DEFAULTS
SECTION 6.01. EVENTS OF DEFAULT.
If one or more of the following events ("Events of Default")
shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal of
any Loan or shall fail to pay any interest on any Loan within 5
Domestic Business Days after such interest shall become due, or shall
fail to pay any fee or other amount payable hereunder within 5 Domestic
Business Days after such fee or other amount becomes due; or
(b) the Borrower or the Parent shall fail to observe or
perform any covenant contained in Sections 5.01(e), 5.01(i), 5.01(j),
5.02(ii), 5.03 through 5.06, inclusive, Section 5.09, Sections 5.15 or
5.16, or Sections 5.18 through 5.27, inclusive; or
(c) the Borrower or any Guarantor shall fail to observe or
perform any covenant or agreement contained or incorporated by
reference in this Agreement (other than those covered by paragraph (a)
or (b) above) or the Guaranty and such failure shall not have been
cured within 30 days after the earlier to occur of (i) written notice
thereof has been given to the Borrower by the Administrative Agent at
the request of any Bank or
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(ii) an Executive Officer of the Borrower otherwise obtains actual
knowledge of any such failure; or
(d) any representation, warranty, certification or statement
made by the Borrower or any Guarantor in Article IV of this Agreement
or in any certificate, financial statement or other document delivered
pursuant to this Agreement shall prove to have been incorrect or
misleading in any material respect when made (or deemed made); or
(e) the Borrower, the Parent or any Subsidiary shall fail to
make any payment in respect of Debt outstanding (other than the Notes)
in an individual principal amount of $5,000,000 or more or in an
aggregate principal amount of $10,000,000 or more when due or within
any applicable grace period; or
(f) any event or condition shall occur which results in the
acceleration of the maturity of Debt outstanding of the Borrower, the
Parent or any Subsidiary (including, without limitation, any required
mandatory prepayment or "put" of such Debt to the Borrower or any
Subsidiary) in an individual principal amount of $5,000,000 or more or
in an aggregate principal amount of $10,000,000 or more, or enables
(or, with the giving of notice or lapse of time or both, would enable)
the holders of such Debt or commitment or any Person acting on such
holders' behalf to accelerate the maturity thereof or terminate any
such commitment (including, without limitation, any required mandatory
prepayment or "put" of such Debt to the Borrower, the Parent or any
Subsidiary); or
(g) the Borrower, the Parent or any Subsidiary shall commence
a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar law now or hereafter
in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief
or to the appointment of or taking possession by any such official in
an involuntary case or other proceeding commenced against it, or shall
make a general assignment for the benefit of creditors, or shall fail
generally, or shall admit in writing its inability, to pay its debts as
they become due, or shall take any corporate action to authorize any of
the foregoing; or
(h) an involuntary case or other proceeding shall be commenced
against the Borrower, the Parent or any Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under
any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of
its property, and such involuntary case or other proceeding shall
remain undismissed and unstayed for a period of 60 days; or an order
for relief shall be entered against the Borrower, the Parent or any
Subsidiary under the federal bankruptcy laws as now or hereafter in
effect; or
(i) the Borrower/Parent or any member of the Controlled Group
shall fail to pay when due any material amount which it shall have
become liable to pay to the PBGC or to a Plan under Title IV of ERISA;
or notice of intent to terminate a Plan or Plans shall be filed under
Title IV of ERISA by the Borrower/Parent, any member of the Controlled
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Group, any plan administrator or any combination of the foregoing; or
the PBGC shall institute proceedings under Title IV of ERISA to
terminate or to cause a trustee to be appointed to administer any such
Plan or Plans or a proceeding shall be instituted by a fiduciary of any
such Plan or Plans to enforce Section 515 or 4219(c)(5) of ERISA and
such proceeding shall not have been dismissed within 30 days
thereafter; or a condition shall exist by reason of which the PBGC
would be entitled to obtain a decree adjudicating that any such Plan or
Plans must be terminated; or the Borrower/Parent or any other member of
the Controlled Group shall enter into, contribute or be obligated to
contribute to, terminate or incur any withdrawal liability with respect
to, a Multiemployer Plan; or
(j) one or more judgments or orders for the payment of money
in an aggregate amount in excess of $5,000,000 shall be rendered
against the Borrower, the Parent or any Subsidiary and such judgment or
order shall continue unsatisfied and unstayed for a period of 30 days;
or
(k) a federal tax lien shall be filed against the Borrower,
the Parent or any Subsidiary under Section 6323 of the Code or a lien
of the PBGC shall be filed against the Borrower or any Subsidiary under
Section 4068 of ERISA and in either case such lien shall remain
undischarged for a period of 25 days after the date of filing; or
(l) (i) any Person or two or more Persons acting in concert
shall have acquired beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934) of [20%] or more of the outstanding shares of the
voting stock of the Borrower; or (ii) as of any date a majority of the
Board of Directors of the Borrower/Parent consists of individuals who
were not either (A) directors of the Borrower/Parent as of the
corresponding date of the previous year, (B) selected or nominated to
become directors by the Board of Directors of the Borrower/Parent of
which a majority consisted of individuals described in clause (A), or
(C) selected or nominated to become directors by the Board of Directors
of the Borrower/Parent of which a majority consisted of individuals
described in clause (A) and individuals described in clause (B); or
(m) the occurrence of any event, act, occurrence, or condition
which the Required Banks determine either does or has a reasonable
probability of causing a Material Adverse Effect.
then, and in every such event, (i) the Administrative Agent shall, if requested
by the Required Banks, by notice to the Borrower terminate the Commitments and
they shall thereupon terminate, (ii) any Bank may terminate its obligation to
fund a Money Market Loan in connection with any relevant Money Market Quote, and
(iii) the Administrative Agent shall, if requested by the Required Banks, by
notice to the Borrower declare the Notes (together with accrued interest
thereon), and all other amounts payable hereunder and under the other Loan
Documents, to be, and the Notes (together with accrued interest thereon), and
all other amounts payable hereunder and under the other Loan Documents shall
thereupon become, immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Borrower together with interest at the Default Rate accruing on the principal
amount thereof from and after the date of such Event of Default; provided that
if any
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Event of Default specified in paragraph (g) or (h) above occurs with respect to
the Borrower, without any notice to the Borrower or any other act by the
Administrative Agent or the Banks, the Commitments shall thereupon terminate and
the Notes (together with accrued interest thereon) and all other amounts payable
hereunder and under the other Loan Documents shall automatically and without
notice become immediately due and payable without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Borrower
together with interest thereon at the Default Rate accruing on the principal
amount thereof from and after the date of such Event of Default. Notwithstanding
the foregoing, the Administrative Agent shall have available to it all other
remedies at law or equity, and shall exercise any one or all of them at the
request of the Required Banks.
SECTION 6.02. NOTICE OF DEFAULT.
The Administrative Agent shall give notice to the Borrower of
any Default under Section 6.01(c) promptly upon being requested to do so by any
Bank and shall thereupon notify all the Banks thereof.
ARTICLE VII.
THE ADMINISTRATIVE AGENT
SECTION 7.01. APPOINTMENT; POWERS AND IMMUNITIES.
Each Bank hereby irrevocably appoints and authorizes the
Administrative Agent to act as its agent hereunder and under the other Loan
Documents with such powers as are specifically delegated to the Administrative
Agent by the terms hereof and thereof, together with such other powers as are
reasonably incidental thereto. The Administrative Agent: (a) shall have no
duties or responsibilities except as expressly set forth in this Agreement and
the other Loan Documents, and shall not by reason of this Agreement or any other
Loan Document be a trustee for any Bank; (b) shall not be responsible to the
Banks for any recitals, statements, representations or warranties contained in
this Agreement or any other Loan Document, or in any certificate or other
document referred to or provided for in, or received by any Bank under, this
Agreement or any other Loan Document, or for the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or any other document referred to or provided for herein or therein or
for any failure by the Borrower to perform any of its obligations hereunder or
thereunder; (c) shall not be required to initiate or conduct any litigation or
collection proceedings hereunder or under any other Loan Document except to the
extent requested by the Required Banks, and then only on terms and conditions
satisfactory to the Administrative Agent, and (d) shall not be responsible for
any action taken or omitted to be taken by it hereunder or under any other Loan
Document or any other document or instrument referred to or provided for herein
or therein or in connection herewith or therewith, except for its own gross
negligence or willful misconduct. The Administrative Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any such agents or attorneys-in-fact selected by it with reasonable care. The
provisions of this Article VII are solely for the benefit of the Administrative
Agent and the Banks, and the Borrower shall not have any rights as a third party
beneficiary of any of the
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provisions hereof. In performing its functions and duties under this Agreement
and under the other Loan Documents, the Administrative Agent shall act solely as
agent of the Banks and does not assume and shall not be deemed to have assumed
any obligation towards or relationship of agency or trust with or for the
Borrower. The duties of the Administrative Agent shall be ministerial and
administrative in nature, and the Administrative Agent shall not have by reason
of this Agreement or any other Loan Document a fiduciary relationship in respect
of any Bank.
SECTION 7.02. RELIANCE BY ADMINISTRATIVE AGENT.
The Administrative Agent shall be entitled to rely upon any
certification, notice or other communication (including any thereof by
telephone, telecopier, telegram or cable) believed by it to be genuine and
correct and to have been signed or sent by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel, independent
accountants or other experts selected by the Administrative Agent. As to any
matters not expressly provided for by this Agreement or any other Loan Document,
the Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder and thereunder in accordance with instructions
signed by the Required Banks, and such instructions of the Required Banks in any
action taken or failure to act pursuant thereto shall be binding on all of the
Banks.
SECTION 7.03. DEFAULTS.
The Administrative Agent shall not be deemed to have knowledge
of the occurrence of a Default or an Event of Default (other than the nonpayment
of principal of or interest on the Loans) unless the Administrative Agent has
received notice from a Bank or the Borrower specifying such Default or Event of
Default and stating that such notice is a "Notice of Default". In the event that
the Administrative Agent receives such a notice of the occurrence of a Default
or an Event of Default, the Administrative Agent shall give prompt notice
thereof to the Banks. The Administrative Agent shall give each Bank prompt
notice of each nonpayment of principal of or interest on the Loans whether or
not it has received any notice of the occurrence of such nonpayment. The
Administrative Agent shall (subject to Section 9.06) take such action hereunder
with respect to such Default or Event of Default as shall be directed by the
Required Banks, provided that, unless and until the Administrative Agent shall
have received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Banks.
SECTION 7.04. RIGHTS OF ADMINISTRATIVE AGENT AND ITS
AFFILIATES AS A BANK.
With respect to the Loans made by the Administrative Agent and
any Affiliate of the Administrative Agent, Wachovia in its capacity as a Bank
hereunder and any Affiliate of the Administrative Agent or such Affiliate in its
capacity as a Bank hereunder shall have the same rights and powers hereunder as
any other Bank and may exercise the same as though Wachovia were not acting as
the Administrative Agent, and the term "Bank" or "Banks" shall, unless the
context otherwise indicates, include Wachovia in its individual capacity and any
Affiliate of the Administrative Agent in its individual capacity. The
Administrative Agent and any Affiliate of the Administrative Agent may (without
having to account therefor to any Bank) accept deposits from, lend money to and
generally engage in any kind of banking, trust or other business with
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the Borrower (and any of the Borrower's Affiliates) as if Wachovia were not
acting as the Administrative Agent, and the Administrative Agent and any
Affiliate of the Administrative Agent may accept fees and other consideration
from the Borrower (in addition to any agency fees and arrangement fees
heretofore agreed to between the Borrower and the Administrative Agent) for
services in connection with this Agreement or any other Loan Document or
otherwise without having to account for the same to the Banks.
SECTION 7.05. INDEMNIFICATION.
Each Bank severally agrees to indemnify the Administrative
Agent, to the extent the Administrative Agent shall not have been reimbursed by
the Borrower, ratably in accordance with its Commitment, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including, without limitation, counsel fees and disbursements)
or disbursements of any kind and 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 or any other Loan Document or any other
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby (excluding, unless an Event of Default has
occurred and is continuing, the normal administrative costs and expenses
incident to the performance of its agency duties hereunder) or the enforcement
of any of the terms hereof or thereof or any such other documents; provided that
no Bank shall be liable for any of the foregoing to the extent they arise from
the gross negligence or willful misconduct of the Administrative Agent; and
provided further that no Designated Bank shall be liable for any payment under
this Section 7.05 so long as, and to the extent that, its Designating Bank makes
such payments. If any indemnity furnished to the Administrative Agent for any
purpose shall, in the opinion of the Administrative Agent, be insufficient or
become impaired, the Administrative Agent may call for additional indemnity and
cease, or not commence, to do the acts indemnified against until such additional
indemnity is furnished.
SECTION 7.06. CONSEQUENTIAL DAMAGES.
THE ADMINISTRATIVE AGENT SHALL NOT BE RESPONSIBLE OR LIABLE TO
ANY BANK, THE BORROWER OR ANY OTHER PERSON OR ENTITY FOR ANY PUNITIVE, EXEMPLARY
OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF THIS AGREEMENT, THE
OTHER LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
SECTION 7.07. PAYEE OF NOTE TREATED AS OWNER.
The Administrative Agent may deem and treat the payee of any
Note as the owner thereof for all purposes hereof unless and until a written
notice of the assignment or transfer thereof shall have been filed with the
Administrative Agent and the provisions of Section 9.08(c) have been satisfied.
Any requests, authority or consent of any Person who at the time of making such
request or giving such authority or consent is the holder of any Note shall be
conclusive and binding on any subsequent holder, transferee or assignee of that
Note or of any Note or Notes issued in exchange therefor or replacement thereof.
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SECTION 7.08. NONRELIANCE ON ADMINISTRATIVE AGENT AND OTHER
BANKS.
Each Bank agrees that it has, independently and without
reliance on the Administrative Agent or any other Bank, and based on such
documents and information as it has deemed appropriate, made its own credit
analysis of the Borrower and decision to enter into this Agreement and that it
will, independently and without reliance upon the Administrative Agent or any
other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement or any of the other Loan
Documents. The Administrative Agent shall not be required to keep itself (or any
Bank) informed as to the performance or observance by the Borrower of this
Agreement or any of the other Loan Documents or any other document referred to
or provided for herein or therein or to inspect the properties or books of the
Borrower or any other Person. Except for notices, reports and other documents
and information expressly required to be furnished to the Banks by the
Administrative Agent hereunder or under the other Loan Documents, the
Administrative Agent shall not have any duty or responsibility to provide any
Bank with any credit or other information concerning the affairs, financial
condition or business of the Borrower or any other Person (or any of their
Affiliates) which may come into the possession of the Administrative Agent.
SECTION 7.09. FAILURE TO ACT.
Except for action expressly required of the Administrative
Agent hereunder or under the other Loan Documents, the Administrative Agent
shall in all cases be fully justified in failing or refusing to act hereunder
and thereunder unless it shall receive further assurances to its satisfaction by
the Banks of their indemnification obligations under Section 7.05 against any
and all liability and expense which may be incurred by the Administrative Agent
by reason of taking, continuing to take, or failing to take any such action.
SECTION 7.10. RESIGNATION OR REMOVAL OF ADMINISTRATIVE AGENT.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided below, the Administrative Agent may resign at
any time by giving notice thereof to the Banks and the Borrower and the
Administrative Agent may be removed at any time with or without cause by the
Required Banks. Upon any such resignation or removal, the Required Banks shall
have the right to appoint a successor Administrative Agent. If no successor
Administrative Agent shall have been so appointed by the Required Banks and
shall have accepted such appointment within 30 days after the retiring
Administrative Agent's notice of resignation or the Required Banks' removal of
the retiring Administrative Agent, then the retiring Administrative Agent may,
on behalf of the Banks, appoint a successor Administrative Agent. Any successor
Administrative Agent shall be a bank which has a combined capital and surplus of
at least $500,000,000. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. After any retiring Administrative Agent's resignation or
removal hereunder as Administrative Agent, the provisions of this Article VII
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
hereunder.
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SECTION 7.11. SYNDICATION AGENT.
The Syndication Agent, in its capacity as such, shall have no
duties or responsibilities under this Agreement or any of the other Loan
Documents.
ARTICLE VIII.
CHANGE IN CIRCUMSTANCES; COMPENSATION
SECTION 8.01. BASIS FOR DETERMINING INTEREST RATE INADEQUATE
OR UNFAIR.
If on or prior to the first day of any Interest Period:
(a) the Administrative Agent reasonably determines that
deposits in Dollars (in the applicable amounts) are not being offered
in the relevant market for such Interest Period, or
(b) the Required Banks reasonably determine and advise the
Administrative Agent that the London Interbank Offered Rate, as
determined by the Administrative Agent will not adequately and fairly
reflect the cost to such Banks of funding Euro-Dollar Loans 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 suspension no longer exist, the
obligations of the Banks to make the type of Fixed Rate Loans specified in such
notice, or to permit continuations or conversions into such type of Loans, shall
be suspended. Unless the Borrower notifies the Administrative Agent at least 2
Domestic Business Days before the date of any Borrowing of such type of Fixed
Rate Loans for which a Notice of Borrowing has previously been given, or
continuation or conversion into such type of Fixed Rate Loans for which a Notice
of Continuation or Conversion has previously been given, that it elects not to
borrow or so continue or convert on such date, such Borrowing shall instead be
made as a Base Rate Borrowing, or such Fixed Rate Loan shall be converted to a
Base Rate Loan.
SECTION 8.02. ILLEGALITY.
If, after the date hereof, the adoption of any applicable law,
rule or regulation, or any change therein or any existing or future law, rule or
regulation, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof (any such agency being referred to as
an "Authority" and any such event being referred to as a "Change of Law"), or
compliance by any Bank (or its Lending Office) with any request or directive
(whether or not having the force of law) of any Authority shall make it unlawful
or impossible for any Bank (or its Lending Office) to make, maintain or fund its
Euro-Dollar Loans and such Bank shall so notify the Administrative Agent, the
Administrative Agent shall forthwith give notice thereof to the other Banks and
the Borrower, whereupon until such Bank notifies the Borrower and the
Administrative Agent that the circumstances giving rise to such suspension no
longer exist, the
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obligation of such Bank to make or permit continuations or conversions of
Euro-Dollar Loans shall be suspended. 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. If such Bank shall determine that it may not lawfully continue to
maintain and fund any of its outstanding Euro-Dollar Loans to maturity, and
shall so specify in such notice, the Borrower shall immediately prepay in full
the then outstanding principal amount of each Euro-Dollar Loan of such Bank,
together with accrued interest thereon and any amount due such Bank pursuant to
Section 8.05(a). Concurrently with prepaying each such Euro-Dollar Loan, the
Borrower shall borrow a Base Rate Loan in an equal principal amount from such
Bank (on which interest and principal shall be payable contemporaneously with
the related Euro-Dollar Loans of the other Banks), and such Bank shall make such
a Base Rate Loan.
SECTION 8.03. INCREASED COST AND REDUCED RETURN.
(a) If after the date hereof, a Change of Law or compliance by
any Bank (or its Lending Office) with any request or directive (whether or not
having the force of law) of any Authority:
(i) shall impose, modify or deem applicable any
reserve, special deposit or similar requirement (including, without
limitation, any such requirement imposed by the Board of Governors of
the Federal Reserve System, but excluding with respect to any
Euro-Dollar Loan any such requirement included in an applicable
Euro-Dollar Reserve Percentage) against assets of, deposits with or for
the account of, or credit extended by, any Bank (or its Lending
Office); or
(ii) shall impose on any Bank (or its Lending Office)
or on the United States market for certificates of deposit or the
London interbank market any other condition affecting its Fixed Rate
Loans, its Notes or its obligation to make Fixed Rate Loans;
and the result of any of the foregoing is to increase the cost to such Bank (or
its Lending Office) of making or maintaining any Loan, or to reduce the amount
of any sum received or receivable by such Bank (or its Lending Office) under
this Agreement or under its Notes with respect thereto, by an amount reasonably
deemed by such Bank to be material, then, within 15 days after demand by such
Bank (with a copy to the Administrative Agent), the Borrower shall pay to such
Bank such additional amount or amounts as will compensate such Bank for such
increased cost or reduction.
(b) If any Bank shall have determined that after the date
hereof the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof, or compliance by any Bank (or its Lending Office) with
any request or directive regarding capital adequacy (whether or not having the
force of law) of any Authority, has or would have 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 such Bank could have achieved but for such
adoption, change or compliance (taking into consideration such Bank's policies
with respect to capital adequacy) by an amount reasonably
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deemed by such Bank to be material, then from time to time, within 15 days after
demand by such Bank, the Borrower shall pay to such Bank such additional amount
or amounts as will compensate such Bank for such reduction.
(c) Each Bank will promptly notify the Borrower and the
Administrative Agent of any event of which it has knowledge, occurring after the
date hereof, which will entitle such Bank to compensation pursuant to this
Section 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 judgment of such Bank, be otherwise disadvantageous to such Bank. A
certificate of any Bank claiming compensation under this Section and setting
forth the additional amount or amounts to be paid to it hereunder shall be
conclusive in the absence of manifest error; provided, however, that the
liability of the Borrower to provide compensation to such Bank hereunder shall
be limited to amounts incurred within 90 days prior to such certification. In
determining such amount, such Bank may use any reasonable averaging and
attribution methods.
(d) The provisions of this Section 8.03 shall be applicable
with respect to any Participant, Assignee or other Transferee, and any
calculations required by such provisions shall be made based upon the
circumstances of such Participant, Assignee or other Transferee.
SECTION 8.04. BASE RATE LOANS OR OTHER FIXED RATE LOANS
SUBSTITUTED FOR AFFECTED FIXED RATE LOANS.
If (i) the obligation of any Bank to make or maintain any type
of Fixed Rate Loans has been suspended pursuant to Section 8.02 or (ii) any Bank
has demanded compensation under Section 8.03, and the Borrower shall, by at
least 5 Euro-Dollar Business Days' prior notice to such Bank through the
Administrative Agent, have elected that the provisions of this Section shall
apply to such Bank, then, unless and until such Bank notifies the Borrower that
the circumstances giving rise to such suspension or demand for compensation no
longer apply:
(a) all Loans which would otherwise be made by such Bank as,
or permitted to be continued as or converted into, Euro-Dollar Loans
shall be instead be made or converted into Base Rate Loans, and
(b) after each of such Fixed Rate Loans has been repaid, all
payments of principal which would otherwise be applied to repay such
Fixed Rate Loans shall be applied to repay its Base Rate Loans instead.
SECTION 8.05. COMPENSATION.
Upon the request of any Bank, delivered to the Borrower and
the Administrative Agent, the Borrower shall pay to such Bank such amount or
amounts as shall reasonably compensate such Bank for any loss, cost or expense
actually incurred by such Bank as a result of:
(a) any payment or prepayment (pursuant to Section 2.11, 2.13,
6.01, 8.02 or otherwise) of a Fixed Rate Loan on a date other than the
last day of an Interest Period for such Loan; or
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(b) any failure by the Borrower to prepay a Fixed Rate Loan on
the date for such prepayment specified in the relevant notice of
prepayment hereunder; or
(c) any failure by the Borrower to borrow a Fixed Rate Loan on
the date for the Fixed Rate Borrowing of which such Fixed Rate Loan is
a part specified in the applicable Notice of Borrowing delivered
pursuant to Section 2.02 or notification of acceptance of Money Market
Quotes pursuant to Section 2.03(e);
such compensation to include, without limitation, an amount equal to the excess,
if any, of (x) the amount of interest which would have accrued on the amount so
paid or prepaid or not prepaid or borrowed for the period from the date of such
payment, prepayment or failure to prepay or borrow to the last day of the then
current Interest Period for such Fixed Rate Loan (or, in the case of a failure
to prepay or borrow, the Interest Period for such Fixed Rate Loan which would
have commenced on the date of such failure to prepay or borrow) at the
applicable rate of interest for such Fixed Rate Loan provided for herein over
(y) the amount of interest (as reasonably determined by such Bank) such Bank
would have paid on deposits in Dollars of comparable amounts having terms
comparable to such period placed with it by leading banks in the London
interbank market (if such Fixed Rate Loan is a Euro-Dollar Loan).
SECTION 8.06. REPLACEMENT OF BANKS.
If any Bank (a "Notice Bank") makes demand for amounts owed
under Section 8.03 (other than due to any change in the Eurodollar Reserve
Percentage), or gives notice under Section 8.02 that it can no longer
participate in Euro-Dollar Loans, then in each case the Borrower shall have the
right, if no Default or Event of Default exists, and subject to the terms and
conditions set forth in Section 9.08(c), to designate an assignee (a
"Replacement Bank") to purchase the Notice Bank's share of outstanding
Syndicated Loans, Money Market Loans and all other obligations hereunder and to
assume the Notice Bank's obligations to the Borrower under this Agreement;
provided, that, any Replacement Bank must be reasonably acceptable to the
Administrative Agent and the Required Banks (and, in any event, may not be an
Affiliate of the Borrower). Subject to the foregoing, the Notice Bank agrees to
assign without recourse to the Replacement Bank its share of outstanding
Syndicated Loans and Money Market Loans and its Commitment, and to delegate to
the Replacement Bank its obligations to the Borrower under this Agreement and
its future obligations to the Administrative Agent under this Agreement. Upon
such sale and delegation by the Notice Bank and the purchase and assumption by
the Replacement Bank, and compliance with the provisions of Section 9.08(c), the
Notice Bank shall cease to be a "Bank" hereunder and the Replacement Bank shall
become a "Bank" under this Agreement; provided, however, that any Notice Bank
shall continue to be entitled to the indemnification provisions contained
elsewhere herein.
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ARTICLE IX.
MISCELLANEOUS
SECTION 9.01. NOTICES.
All notices, requests and other communications to any party
hereunder shall be in writing (including telecopier or similar writing) and
shall be given to such party at its address or telecopier number set forth on
the signature pages hereof or such other address or telecopier number as such
party may hereafter specify for the purpose by notice to each other party. Each
such notice, request or other communication shall be effective (i) if given by
telecopier, when such telecopy is transmitted to the telecopier number specified
in this Section and the confirmation is received, (ii) if given by mail, 72
hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or (iii) if given by any other means,
when delivered at the address specified in this Section; provided that notices
to the Administrative Agent under Article II or Article VIII shall not be
effective until received.
SECTION 9.02. NO WAIVERS.
No failure or delay by the Administrative Agent or any Bank in
exercising any right, power or privilege hereunder or under any Note or other
Loan Document shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.
SECTION 9.03. EXPENSES; DOCUMENTARY TAXES.
The Borrower shall pay (i) all out-of-pocket expenses of the
Administrative Agent, including reasonable fees and disbursements of special
counsel for the Administrative Agent actually incurred, in connection with the
preparation of this Agreement and the other Loan Documents, any waiver or
consent hereunder or thereunder or any amendment hereof or thereof or any
Default or alleged Default hereunder or thereunder and (ii) if a Default occurs,
all out-of-pocket expenses incurred by the Administrative Agent and the Banks,
including reasonable fees and disbursements of counsel actually incurred, in
connection with such Default and collection and other enforcement proceedings
resulting therefrom, including out-of-pocket expenses incurred in enforcing this
Agreement and the other Loan Documents. The Borrower shall indemnify the
Administrative Agent and each Bank against any transfer taxes, documentary
taxes, assessments or charges made by any Authority by reason of the execution
and delivery of this Agreement or the other Loan Documents.
SECTION 9.04. INDEMNIFICATION.
The Borrower shall indemnify the Administrative Agent, the
Banks and each Affiliate thereof and their respective directors, officers,
employees and agents from, and hold each of them harmless against, any and all
losses, liabilities, claims or damages to which any of them may become subject,
insofar as such losses, liabilities, claims or damages arise out of or result
from any actual or proposed use by the Borrower of the proceeds of any extension
of credit by any Bank hereunder or breach by the Borrower of this Agreement or
any other Loan Document or from any investigation, litigation (including,
without limitation, any actions taken by the Administrative Agent or any of the
Banks to enforce this Agreement or any of the other Loan Documents) or other
proceeding (including, without limitation, any threatened investigation or
proceeding) relating to the foregoing, and the Borrower shall reimburse the
Administrative Agent and each Bank, and each Affiliate thereof and their
respective directors,
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officers, employees and agents, upon demand for any expenses (including, without
limitation, legal fees) incurred in connection with any such investigation or
proceeding; but excluding any such losses, liabilities, claims, damages or
expenses (i) incurred by reason of the gross negligence or willful misconduct of
the Person to be indemnified or (ii) to the extent they are determined by final
judgment of a court of competent jurisdiction to have resulted from a breach of
contract by such Person seeking indemnification with respect to the Loan
Documents.
SECTION 9.05. SETOFF; SHARING OF SETOFFS.
(a) The Borrower hereby hereby authorizes the Administrative
Agent and each Bank, upon the occurrence and during the continuance of an Event
of Default, at any time or times with or without prior notice to apply any
balances in the Borrower's deposit accounts of any kind, or any interest in any
deposits or deposit accounts thereof, held by any Bank or the Administrative
Agent for the account or benefit of the Borrower and including any balance of
any deposit account or of any credit of the Borrower with the Administrative
Agent or any such Bank, whether now existing or hereafter established to such of
the indebtedness and obligations owing by the Borrower to the Banks and/or the
Administrative Agent then past due and in such amounts as they may elect, and
whether or not the collateral, if any, or the responsibility of other Persons
primarily, secondarily or otherwise liable may be deemed adequate. Each Bank and
the Administrative Agent agrees to promptly notify the Borrower after any such
set-off or application. For the purposes of this paragraph, all remittances and
property shall be deemed to be in the possession of the Administrative Agent or
any such Bank as soon as the same may be put in transit to it by mail or carrier
or by other bailee.
(b) Each Bank agrees that if it shall, by exercising any right
of setoff or counterclaim or resort to collateral security or otherwise, receive
payment of a proportion of the aggregate amount of principal and interest owing
with respect to the Note held by it which is greater than the proportion
received by any other Bank in respect of the aggregate amount of all principal
and interest owing with respect to the Note held by such other Bank, the Bank
receiving such proportionately greater payment shall purchase such
participations in the Notes held by the other Banks owing to such other Banks,
and such other adjustments shall be made, as may be required so that all such
payments of principal and interest with respect to the Notes held by the Banks
owing to such other Banks shall be shared by the Banks pro rata; provided that
(i) nothing in this Section shall impair the right of any Bank to exercise any
right of setoff or counterclaim it may have and to apply the amount subject to
such exercise to the payment of indebtedness of the Borrower other than its
indebtedness under the Notes, and (ii) if all or any portion of such payment
received by the purchasing Bank is thereafter recovered from such purchasing
Bank, such purchase from each other Bank shall be rescinded and such other Bank
shall repay to the purchasing Bank the purchase price of such participation to
the extent of such recovery together with an amount equal to such other Bank's
ratable share (according to the proportion of (x) the amount of such other
Bank's required repayment to (y) the total amount so recovered from the
purchasing Bank) of any interest or other amount paid or payable by the
purchasing Bank in respect of the total amount so recovered. The Borrower
agrees, to the fullest extent it may effectively do so under applicable law and
pursuant to the terms hereof, that any holder of a participation in a Note,
whether or not acquired pursuant to the foregoing arrangements, may exercise
rights of setoff or counterclaim and other rights with respect to such
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participation as fully as if such holder of a participation were a direct
creditor of the Borrower in the amount of such participation.
SECTION 9.06. AMENDMENTS AND WAIVERS.
(a) Any provision of this Agreement, the Notes or any other
Loan Documents may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by the Borrower and the Required Banks (and,
if the rights or duties of the Administrative Agent are affected thereby, by the
Administrative Agent); provided that, no such amendment or waiver shall, unless
signed by all Banks, (i) change the Commitment of any Bank or subject any Bank
to any additional obligation, (ii) reduce the principal of or the rate of
interest on any Loan or any fees (other than fees payable to the Administrative
Agent) hereunder, (iii) change the date fixed for any payment of principal of or
interest on any Loan or any fees hereunder, (iv) reduce the amount of principal,
interest or fees due on any date fixed for the payment thereof, (v) change the
percentage of the Commitments or of the aggregate unpaid principal amount of the
Notes, or the percentage of Banks, which shall be required for the Banks or any
of them to take any action under this Section or any other provision of this
Agreement, (vi) change the manner of application of any payments made under this
Agreement or the Notes, (vii) release or substitute all or any substantial part
of the collateral (if any) held as security for the Loans, (viii) release any
Guarantee given to support payment of the Loans or (ix) change the definition of
"Borrowing Base".
(b) The Borrower will not solicit, request or negotiate for or
with respect to any proposed waiver or amendment of any of the provisions of
this Agreement unless each Bank shall be informed thereof by the Borrower and
shall be afforded an opportunity of considering the same and shall be supplied
by the Borrower with sufficient information to enable it to make an informed
decision with respect thereto. Executed or true and correct copies of any waiver
or consent effected pursuant to the provisions of this Agreement shall be
delivered by the Borrower to each Bank forthwith following the date on which the
same shall have been executed and delivered by the requisite percentage of
Banks. The Borrower will not, directly or indirectly, pay or cause to be paid
any remuneration, whether by way of supplemental or additional interest, fee or
otherwise, to any Bank (in its capacity as such) as consideration for or as an
inducement to the entering into by such Bank of any waiver or amendment of any
of the terms and provisions of this Agreement unless such remuneration is
concurrently paid, on the same terms, ratably to all such Banks.
(c) The Designated Bank hereby appoints Designating Bank as
Designated Bank's agent and attorney in fact and grants to the Designating Bank
an irrevocable power of attorney, coupled with an interest, to receive payments
made for the benefit of the Designated Bank under this Agreement, to deliver and
receive all communications and notices under this Agreement and other Loan
Documents and to exercise on the Designed Bank's behalf all rights to vote and
to grant and make approvals, waivers, consent of amendments to or under this
Agreement or other Loan Documents. Any document executed by such agent on the
Designated Bank's behalf in connection with this Agreement or other Loan
Documents shall be binding on the Designated Bank. The Borrower, the
Administrative Agent and each of the Banks may rely on and are beneficiaries of
the preceding provisions.
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SECTION 9.07. NO MARGIN STOCK COLLATERAL.
Each of the Banks represents to the Administrative Agent and
each of the other Banks that it in good faith is not, directly or indirectly (by
negative pledge or otherwise), relying upon any Margin Stock as collateral in
the extension or maintenance of the credit provided for in this Agreement.
SECTION 9.08. SUCCESSORS AND ASSIGNS.
(a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns; provided that the Borrower may not assign or otherwise transfer any of
its rights under this Agreement.
(b) Any Bank may at any time sell to one or more Persons (each
a "Participant") participating interests in any Loan owing to such Bank, any
Note held by such Bank, any Commitment hereunder or any other interest of such
Bank hereunder. In the event of any such sale by a Bank of a participating
interest to a Participant, such Bank's obligations under this Agreement shall
remain unchanged, such Bank shall remain solely responsible for the performance
thereof, such Bank shall remain the holder of any such Note for all purposes
under this Agreement, and the Borrower and the Administrative Agent shall
continue to deal solely and directly with such Bank in connection with such
Bank's rights and obligations under this Agreement. In no event shall a Bank
that sells a participation be obligated to the Participant to take or refrain
from taking any action hereunder except that such Bank may agree that it will
not (except as provided below), without the consent of the Participant, agree to
(i) the change of any date fixed for the payment of principal of or interest on
the related loan or loans, (ii) the change of the amount of any principal,
interest or fees due on any date fixed for the payment thereof with respect to
the related loan or loans, (iii) the change of the principal of the related loan
or loans, (iv) any change in the rate at which either interest is payable
thereon or (if the Participant is entitled to any part thereof) fee is payable
hereunder from the rate at which the Participant is entitled to receive interest
or fee (as the case may be) in respect of such participation, (v) the release or
substitution of all or any substantial part of the collateral (if any) held as
security for the Loans, or (vi) the release of any Guarantee given to support
payment of the Loans. Each Bank selling a participating interest in any Loan,
Note, Commitment or other interest under this Agreement, other than a Money
Market Loan or Money Market Note or participating interest therein, shall,
within 10 Domestic Business Days of such sale, provide the Borrower and the
Administrative Agent with written notification stating that such sale has
occurred and identifying the Participant and the interest purchased by such
Participant. The Borrower agrees that each Participant shall be entitled to the
benefits of Article VIII with respect to its participation in Loans outstanding
from time to time.
(c) Any Bank may at any time assign to one or more banks or
financial institutions (each an "Assignee") all or a proportionate part of its
rights and obligations under this Agreement, the Notes and the other Loan
Documents, and such Assignee shall assume all such rights and obligations,
pursuant to an Assignment and Acceptance, executed by such Assignee, such
transferor Bank and the Administrative Agent (and, in the case of an Assignee
that is not then a Bank or an Affiliate or Related Fund of a Bank), subject to
clause (iii) below, by the Borrower); provided that (i) no interest may be sold
by a Bank pursuant to this paragraph
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(c) unless the Assignee shall agree to assume ratably equivalent portions of the
transferor Bank's Commitment, (ii) if a Bank is assigning only a portion of its
Commitment, then, the amount of the Commitment being assigned (determined as of
the effective date of the assignment) shall be in an amount not less than
$5,000,000 (except that there shall be no such minimum if the assignment is to
any Bank or any Affiliate or Related Fund of any Bank), (iii) except during the
continuance of a Default, no interest may be sold by a Bank pursuant to this
paragraph (c) to any Assignee that is not then a Bank or an Affiliate or Related
Fund of a Bank without the consent of the Borrower and the Administrative Agent,
which consent shall not be unreasonably withheld and (iv) a Bank may not have
more than 3 Assignees that are not then Banks (or an Affiliate or Related Fund
thereof) at any one time. Upon (A) execution of the Assignment and Acceptance by
such transferor Bank, such Assignee, the Administrative Agent and (if
applicable) the Borrower, (B) delivery of an executed copy of the Assignment and
Acceptance to the Borrower and the Administrative Agent, (C) payment by such
Assignee to such transferor Bank of an amount equal to the purchase price agreed
between such transferor Bank and such Assignee, and (D) payment of a processing
and recordation fee to the Administrative Agent of (1) if such Assignee is a
Bank or an Affiliate or Related Fund of a Bank, $1,000), and (ii) for any other
Assignee, $3,500, such Assignee shall for all purposes be a Bank party to this
Agreement and shall have all the rights and obligations of a Bank under this
Agreement to the same extent as if it were an original party hereto with a
Commitment as set forth in such instrument of assumption, and the transferor
Bank shall be released from its obligations hereunder to a corresponding extent,
and no further consent or action by the Borrower, the Banks or the
Administrative Agent shall be required. Upon the consummation of any transfer to
an Assignee pursuant to this paragraph (c), the transferor Bank, the
Administrative Agent and the Borrower shall make appropriate arrangements so
that, if required, a new Note is issued to each of such Assignee and such
transferor Bank.
(d) Subject to the provisions of Section 9.09, the Borrower
authorizes each Bank to disclose to any Participant, Assignee or other
transferee (each a "Transferee") and any prospective Transferee any and all
financial information in such Bank's possession concerning the Borrower which
has been delivered to such Bank by the Borrower pursuant to this Agreement or
which has been delivered to such Bank by the Borrower in connection with such
Bank's credit evaluation prior to entering into this Agreement.
(e) No Transferee shall be entitled to receive any greater
payment under Section 8.03 than the transferor Bank would have been entitled to
receive with respect to the rights transferred, unless such transfer is made
with the Borrower's prior written consent or by reason of the provisions of
Section 2.13(c), 8.02 or 8.03 requiring such Bank to designate a different
Lending Office under certain circumstances or at a time when the circumstances
giving rise to such greater payment did not exist.
(f) Anything in this Section 9.08 to the contrary
notwithstanding, any Bank may assign and pledge all or any portion of the Loans
and/or obligations owing to it to any Federal Reserve Bank or the United States
Treasury 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, provided that any payment in respect of such assigned
Loans and/or obligations made by the Borrower to the assigning and/or pledging
Bank in accordance with the terms of this Agreement shall satisfy the Borrower's
obligations hereunder in respect of
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such assigned Loans and/or obligations to the extent of such payment. No such
assignment shall release the assigning and/or pledging Bank from its obligations
hereunder.
(g) Any Bank may at any time designate not more than one
Designated Bank to fund Money Market Loans on behalf of such Designating Bank
subject to the terms of Section 9.08(c), and the provisions of Section 9.08(c)
shall not apply to such designation. No Bank may have more than one Designated
Bank at any time. Such designation may occur either by the execution of the
signature pages hereof by such Bank and Designated Bank next to the appropriate
"Designating Bank" and "Designated Bank" captions, or by execution by such
parties of a Designation Agreement subsequent to the date hereof; provided, that
any Bank and its Designated Bank executing the signatures pages hereof as
"Designating Bank" and "Designated Bank", respectively, on the date hereof shall
be deemed to have executed a Designation Agreement, and shall be bound by the
respective representations, warranties and covenants contained therein, and such
designation shall be conclusively deemed to be acknowledged by the Borrower and
the Administrative Agent. The parties to each such designation occurring
subsequent to the execution date hereof shall execute and deliver to the
Administrative Agent and the Borrower for their acknowledgment a Designation
Agreement. Upon such receipt of an appropriately completed Designation Agreement
executed by a Designating Bank and a designee representing that it is a
Designated Bank and acknowledge by the Borrower, the Administrative Agent will
acknowledge such Designation Agreement and will give prompt notice thereof to
the Borrower and the other Banks, whereupon, (i) the Borrower shall execute and
deliver to the Designating Bank a Designated Bank Note payable to the order of
the Designated Bank, (ii) from and after the effective date specified in the
Designation Agreement, the Designated Bank shall become a party to this
Agreement with a right to make Money Market Loans on behalf of its Designating
Bank pursuant to Section 2.03(h), and (iii) the Designated Bank shall not be
required to make payments with respect to any obligations in this Agreement
except to the extent of excess cash flow of such Designated Bank which is not
otherwise required to repay obligations of such Designated Bank which are then
due and payable; provided, however, that regardless of such designation and
assumption by the Designated Bank, the Designating Bank shall be and remain
obligated to the Borrower, the Administrative Agent and the Banks for each and
every obligation of the Designating Bank and its related Designated Bank with
respect to this Agreement, including, without limitation, any indemnification
obligations under Section 7.05 and any sums otherwise payable to the Borrower by
the Designated Bank. Each Designating Bank, or a specified branch or affiliate
thereof, shall serve as the administrative agent of its Designated Bank and
shall on behalf of its Designated Bank: (x) receive any and all payments made
for the benefit of such Designated Bank and (y) give and receive all
communications and notices and take all actions hereunder, including, without
limitation, votes, approvals, waivers, consents and amendments under or relating
to this Agreement and the other Loan Documents. Any such notice, communication,
vote, approval, waiver, consent or amendment shall be signed by a Designating
Bank, or specified branch or affiliate thereof, as administrative agent for its
Designated Bank and need not be signed by such Designated Bank on its own
behalf. The Borrower, the Administrative Agent and the Banks may rely thereon
without any requirement that the Designated Bank sign or acknowledge the same.
No Designated Bank may assign or transfer all or any portion of its interest
hereunder or under any other Loan Document, other than via an assignment to its
Designating Bank or Liquidity Bank (but any assignment to a Liquidity Bank shall
not curtail or affect the appointment or rights of the Designating Bank pursuant
to Section 9.06(c) or Section 4 of the Designation Agreement, which
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appointment and rights are irrevocable), if any, or otherwise in accordance with
the provisions of Section 2.03(h).
SECTION 9.09. CONFIDENTIALITY.
Each Bank agrees to exercise commercially reasonable efforts
to keep any information delivered or made available by the Borrower to it which
is clearly indicated to be confidential information, confidential from anyone
other than persons employed or retained by such Bank who are or are expected to
become engaged in evaluating, approving, structuring or administering the Loans;
provided that nothing herein shall prevent any Bank from disclosing such
information (i) to any other Bank, (ii) upon the order of any court or
administrative agency, (iii) upon the request or demand of any regulatory agency
or authority having jurisdiction over such Bank, (iv) which has been publicly
disclosed, (v) to the extent reasonably required in connection with any
litigation to which the Administrative Agent, any Bank or their respective
Affiliates may be a party, (vi) to the extent reasonably required in connection
with the exercise of any remedy hereunder, (vii) to such Bank's legal counsel
and independent auditors, and (viii) to any actual or proposed Participant,
Assignee or other Transferee of all or part of its rights hereunder which has
agreed in writing to be bound by the provisions of this Section 9.09 and (ix) by
any Designated Bank to any rating agency, commercial paper dealer, or provider
of a surety, guaranty or credit or liquidity enhancement to such Designated Bank
which has agreed in writing to be bound by the provisions of this Section 9.09;
provided that should disclosure of any such confidential information be required
by virtue of clause (ii) of the immediately preceding sentence, to the extent
permitted by law, any relevant Bank shall promptly notify the Borrower of same
so as to allow the Borrower to seek a protective order or to take any other
appropriate action; provided, further, that, no Bank shall be required to delay
compliance with any directive to disclose any such information so as to allow
the Borrower to effect any such action.
SECTION 9.10. REPRESENTATION BY BANKS.
Each Bank hereby represents that it is a commercial lender or
financial institution which makes loans in the ordinary course of its business
and that it will make its Loans hereunder for its own account in the ordinary
course of such business; provided that, subject to Section 9.08, the disposition
of the Note or Notes held by that Bank shall at all times be within its
exclusive control.
SECTION 9.11. OBLIGATIONS SEVERAL.
The obligations of each Bank hereunder are several, and no
Bank shall be responsible for the obligations or commitment of any other Bank
hereunder. Nothing contained in this Agreement and no action taken by the Banks
pursuant hereto shall be deemed to constitute the Banks to be a partnership, an
association, a joint venture or any other kind of entity. The amounts payable at
any time hereunder to each Bank shall be a separate and independent debt, and
each Bank shall be entitled to protect and enforce its rights arising out of
this Agreement or any other Loan Document and it shall not be necessary for any
other Bank to be joined as an additional party in any proceeding for such
purpose.
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SECTION 9.12. GEORGIA LAW.
This Agreement and each Note shall be construed in accordance
with and governed by the law of the State of Georgia.
SECTION 9.13. SEVERABILITY.
In case any one or more of the provisions contained in this
Agreement, the Notes or any of the other Loan Documents should be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby and shall be enforced to the
greatest extent permitted by law.
SECTION 9.14. INTEREST.
In no event shall the amount of interest, and all charges,
amounts or fees contracted for, charged or collected pursuant to this Agreement,
the Notes or the other Loan Documents and deemed to be interest under applicable
law (collectively, "Interest") exceed the highest rate of interest allowed by
applicable law (the "Maximum Rate"), and in the event any such payment is
inadvertently received by any Bank, then the excess sum (the "Excess") shall be
credited as a payment of principal, unless the Borrower shall notify such Bank
in writing that it elects to have the Excess returned forthwith. 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. The right to
accelerate maturity of any of the Loans does not include the right to accelerate
any interest that has not otherwise accrued on the date of such acceleration,
and the Administrative Agent and the Banks do not intend to collect any unearned
interest in the event of any such acceleration. All monies paid to the
Administrative Agent or the Banks hereunder or under any of the Notes or the
other Loan Documents, whether at maturity or by prepayment, shall be subject to
rebate of unearned interest as and to the extent required by applicable law. By
the execution of this Agreement, the Borrower covenants, to the fullest extent
permitted by law, that (i) the credit or return of any Excess shall constitute
the acceptance by the Borrower of such Excess, and (ii) the Borrower shall not
seek or pursue any other remedy, legal or equitable , against the Administrative
Agent or any Bank, based in whole or in part upon contracting for charging or
receiving any Interest in excess of the Maximum Rate. For the purpose of
determining whether or not any Excess has been contracted for, charged or
received by the Administrative Agent or any Bank, all interest at any time
contracted for, charged or received from the Borrower in connection with this
Agreement, the Notes or any of the other Loan Documents shall, to the extent
permitted by applicable law, be amortized, prorated, allocated and spread in
equal parts throughout the full term of the Commitments. The Borrower, the
Administrative Agent and each Bank shall, to the maximum extent permitted under
applicable law, (i) characterize any non-principal payment as an expense, fee or
premium rather than as Interest and (ii) exclude voluntary prepayments and the
effects thereof. The provisions of this Section shall be deemed to be
incorporated into each Note and each of the other Loan Documents (whether or not
any provision of this Section is referred to therein). All such Loan Documents
and communications relating to any Interest owed by the Borrower and all figures
set forth therein shall, for the sole purpose of computing the extent of
obligations hereunder and under the Notes and the other Loan Documents be
automatically recomputed by the Borrower, and by any court considering the same,
to give effect to the adjustments or credits required by this Section.
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SECTION 9.15. INTERPRETATION.
No provision of this Agreement or any of the other Loan
Documents shall be construed against or interpreted to the disadvantage of any
party hereto by any court or other governmental or judicial authority by reason
of such party having or being deemed to have structured or dictated such
provision.
SECTION 9.16. WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION.
The Borrower (a) and each of the Banks and the Administrative
Agent irrevocably waives, to the fullest extent permitted by law, any and all
right to trial by jury in any legal proceeding arising out of this Agreement,
any of the other Loan Documents, or any of the transactions contemplated hereby
or thereby, (b) submits to the nonexclusive personal jurisdiction in the State
of Georgia, the courts thereof and the United States District Courts sitting
therein, for the enforcement of this Agreement, the Notes and the other Loan
Documents, (c) waives any and all personal rights under the law of any
jurisdiction to object on any basis (including, without limitation,
inconvenience of forum) to jurisdiction or venue within the State of Georgia for
the purpose of litigation to enforce this Agreement, the Notes or the other Loan
Documents, and (d) agrees that service of process may be made upon it in the
manner prescribed in Section 9.01 for the giving of notice to the Borrower.
Nothing herein contained, however, shall prevent the Administrative Agent from
bringing any action or exercising any rights against any security and against
the Borrower personally, and against any assets of the Borrower, within any
other state or jurisdiction.
SECTION 9.17. COUNTERPARTS.
This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
SECTION 9.18. SOURCE OF FUNDS -- ERISA.
Each of the Banks hereby severally (and not jointly)
represents to the Borrower that no part of the funds to be used by such Bank to
fund the Loans hereunder from time to time constitutes (i) assets allocated to
any separate account maintained by such Bank in which any employee benefit plan
(or its related trust) has any interest nor (ii) any other assets of any
employee benefit plan. As used in this Section, the terms "employee benefit
plan" and "separate account" shall have the respective meanings assigned to such
terms in Section 3 of ERISA.
SECTION 9.19. NO BANKRUPTCY PROCEEDINGS.
Each of the Borrower, the Administrative Agent and the Banks
agrees that it will not institute against any Designated Bank or join any other
Person in instituting against any Designated Bank any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding under any
federal or state bankruptcy or similar law, for one year and one day after the
payment in full of the latest maturing commercial paper note issued by such
Designated Bank.
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SECTION 9.20. APPROVAL OF GUARANTY PROVISIONS
The Administrative Agent and the Banks hereby approve the
terms, conditions and provisions of the Guaranty, and agree to be bound thereby,
including, without limitation, the provisions of Paragraph 10 thereof, providing
for the sharing of "Guaranty Proceeds" with holders of "Existing Senior
Obligations" (as those terms are defined therein) pursuant and subject to the
terms of such Paragraph 10.
[Signatures are contained on the following pages.]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, under seal, by their respective authorized
officers as of the day and year first above written.
IRT PROPERTY COMPANY (SEAL)
By: /s/ James G. Levy
-------------------------------------------
James G. Levy
Senior Vice President
IRT Property Company
200 Galleria Parkway, Suite 1400
Atlanta, Georgia 30339
Attention: James G. Levy
Telecopier number: 770-988-8773
Confirmation number: 770-955-4406
71
<PAGE> 77
COMMITMENTS WACHOVIA BANK, N.A.,
as Administrative Agent and as a Bank (SEAL)
$30,000,000 By: /s/ CATHY CASEY
------------------------------------------
Title: SVP
Lending Office
Wachovia Bank, N.A.
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attention: Cathy Casey
Telecopier number: 404-332-4066
Confirmation number: 404-332-5649
72
<PAGE> 78
FIRST UNION NATIONAL BANK,
as Syndication Agent and as a Bank (SEAL)
$25,000,000 By: /s/ JOHN SCHISSEL
--------------------------------------
Title: Director
Lending Office
First Union National Bank
One First Union Center, TW-6
Charlotte, North Carolina 28288
Attention: John Schissel
Telecopier number: 704-383-6205
Confirmation number: 704-383-1967
73
<PAGE> 79
$20,000,000 AMSOUTH BANK, as a Bank (SEAL)
By: /s/ KATHEIRNE ALLEN
--------------------------------------
Title: AVP
Lending Office
AmSouth Bank
Commercial Real Estate Department
1900 5th Avenue North
Birmingham, Alabama 35203
Attention: Katherine Allen
Telecopier number: 205-326-4075
Confirmation number: 205-326-4788
74
<PAGE> 80
$15,000,000 SOUTHTRUST BANK, N.A., as a Bank (SEAL)
By: /s/ SAM BOROUGHS
-----------------------------------------
Title: Assistant Vice President
Lending Office
SouthTrust Bank, N.A.
420 North 20th Street
11th Floor
Birmingham, Alabama 35203
Attention: Sam Boroughs
Telecopier number: 205-254-8270
Confirmation number: 205-254-5039
75
<PAGE> 81
$10,000,000 SUNTRUST BANK, ATLANTA, as a Bank (SEAL)
By: /s/ W. JOHN NEILL
--------------------------------------
Title: EVP
Lending Office
SunTrust Bank, Atlanta
50 Hurt Plaza, Suite 700
Atlanta, Georgia 30303
Attention: John Neill
Telecopier number: 404-827-6774
Confirmation number: 404-588-8248
TOTAL COMMITMENTS
$100,000,000
76
<PAGE> 82
EXHIBIT A-1
SYNDICATED LOAN NOTE
Atlanta, Georgia
[November __,] 1999
For value received, IRT PROPERTY COMPANY, a Georgia
corporation (the "Borrower"), promises to pay to the order of
___________________________________________________________, a
____________________ (the "Bank"), for the account of its Lending Office, the
principal sum of ___________________________________ AND NO/100 DOLLARS
($__________), or such lesser amount as shall equal the unpaid principal amount
of each Syndicated Loan made by the Bank to the Borrower pursuant to the Credit
Agreement referred to below, on the dates and in the amounts provided in the
Credit Agreement. The Borrower promises to pay interest on the unpaid principal
amount of this Syndicated Loan Note on the dates and at the rate or rates
provided for in the Credit Agreement. Interest on any overdue principal of and,
to the extent permitted by law, overdue interest on the principal amount hereof
shall bear interest at the Default Rate, as provided for in the Credit
Agreement. All such payments of principal and interest shall be made in lawful
money of the United States in Federal or other immediately available funds at
the office of Wachovia Bank, N.A., 191 Peachtree Street, N.E., Atlanta, Georgia
30303-1757, or such other address as may be specified from time to time pursuant
to the Credit Agreement.
All Syndicated Loans made by the Bank, the respective
maturities thereof, the interest rates from time to time applicable thereto, and
all repayments of the principal thereof shall be recorded by the Bank and, prior
to any transfer hereof, endorsed by the Bank on the schedule attached hereto, or
on a continuation of such schedule attached to and made a part hereof; provided
that the failure of the Bank to make any such recordation or endorsement shall
not affect the obligations of the Borrower hereunder or under the Credit
Agreement.
This Syndicated Loan Note is one of the Syndicated Loan Notes
referred to in the Credit Agreement dated as of November 1, 1999 among the
Borrower, the Banks listed on the signature pages thereof, Wachovia Bank, N.A.,
as Administrative Agent and First Union National Bank, as Syndication Agent. (as
the same may be amended and modified from time to time, the "Credit Agreement").
Terms defined in the Credit Agreement are used herein with the same meanings.
Reference is made to the Credit Agreement for provisions for the optional and
mandatory prepayment and the repayment hereof and the acceleration of the
maturity hereof, as well as the obligation of the Borrower to pay all costs of
collection, including reasonable attorneys fees, in the event this Syndicated
Loan Note is collected by law or through an attorney at law.
The Borrower hereby waives presentment, demand, protest,
notice of demand, protest and nonpayment and any other notice required by law
relative hereto, except to the extent as otherwise may be expressly provided for
in the Credit Agreement.
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<PAGE> 83
IN WITNESS WHEREOF, the Borrower has caused this Syndicated
Loan Note to be duly executed, under seal, by its duly authorized officer as of
the day and year first above written.
IRT PROPERTY COMPANY (SEAL)
By:
-------------------------------------
James G. Levy
Senior Vice President
78
<PAGE> 84
Syndicated Loan Note (cont'd)
<TABLE>
<CAPTION>
SYNDICATED LOANS AND PAYMENTS OF PRINCIPAL
- --------------------------------------------------------------------------------------------------
BASE RATE OR AMOUNT OF
EURO AMOUNT PRINCIPAL MATURITY NOTATION
DATE DOLLAR LOAN OF LOAN REPAID DATE MADE BY
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
</TABLE>
79
<PAGE> 85
EXHIBIT A-2
MONEY MARKET LOAN NOTE
As of November 1, 1999
For value received, IRT PROPERTY COMPANY, a Georgia
corporation (the "Borrower"), promises to pay to the order of
______________________________________, a _______________ (the "Bank"), for the
account of its Lending Office, the principal sum of FIFTY MILLION AND NO/100
DOLLARS ($50,000,000), or such lesser amount as shall equal the unpaid principal
amount of each Money Market Loan made by the Bank to the Borrower pursuant to
the Credit Agreement referred to below, on the dates and in the amounts provided
in the Credit Agreement. The Borrower promises to pay interest on the unpaid
principal amount of this Money Market Loan Note on the dates and at the rate or
rates provided for in the Credit Agreement referred to below. Interest on any
overdue principal of and, to the extent permitted by law, overdue interest on
the principal amount hereof shall bear interest at the Default Rate, as provided
for in the Credit Agreement. All such payments of principal and interest shall
be made in lawful money of the United States in Federal or other immediately
available funds at the office of Wachovia Bank, N.A., 191 Peachtree Street,
N.E., Atlanta, Georgia 30303-1757, or such other address as may be specified
from time to time pursuant to the Credit Agreement.
All Money Market Loans made by the Bank, the respective
maturities thereof, the interest rates from time to time applicable thereto, and
all repayments of the principal thereof shall be recorded by the Bank and, prior
to any transfer hereof, endorsed by the Bank on the schedule attached hereto, or
on a continuation of such schedule attached to and made a part hereof; provided
that the failure of the Bank to make any such recordation or endorsement shall
not affect the obligations of the Borrower hereunder or under the Credit
Agreement.
This Money Market Loan Note is one of the Money Market Loan
Notes referred to in the Credit Agreement dated as of November 1, 1999 among the
Borrower, the Banks listed on the signature pages thereof, Wachovia Bank, N.A.,
as Administrative Agent and First Union National Bank, as Syndication Agent. (as
the same may be amended and modified from time to time, the "Credit Agreement").
Terms defined in the Credit Agreement are used herein with the same meanings.
Reference is made to the Credit Agreement for provisions for the optional and
mandatory prepayment and the repayment hereof and the acceleration of the
maturity hereof, as well as the obligation of the Borrower to pay all costs of
collection, including reasonable attorneys fees, in the event this Money Market
Loan Note is collected by law or through an attorney at law.
The Borrower hereby waives presentment, demand, protest,
notice of demand, protest and nonpayment and any other notice required by law
relative hereto, except to the extent as otherwise may be expressly provided for
in the Credit Agreement.
80
<PAGE> 86
IN WITNESS WHEREOF, the Borrower has caused this Money Market
Loan Note to be duly executed, under seal, by its duly authorized officer as of
the day and year first above written.
IRT PROPERTY COMPANY (SEAL)
By:
---------------------------------
James G. Levy
Senior Vice President
81
<PAGE> 87
Money Market Loan Note (cont'd)
MONEY MARKET LOANS AND PAYMENTS OF PRINCIPAL
<TABLE>
<CAPTION>
MONEY MARKET LOANS AND PAYMENTS OF PRINCIPAL
- --------------------------------------------------------------------------------------------------
AMOUNT OF STATED
INTEREST AMOUNT PRINCIPAL MATURITY NOTATION
DATE RATE OF LOAN REPAID DATE MADE BY
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
</TABLE>
82
<PAGE> 88
EXHIBIT B
OPINION OF
COUNSEL FOR THE BORROWER AND THE GUARANTORS
[LETTERHEAD OF ALSTON & BIRD LLP]
November 1, 1999
To the Parties shown on Exhibit A hereto
c/o Wachovia Bank, N.A.,
as Agent
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attn: Syndications Group
Dear Sirs:
We have acted as counsel for IRT Property Company, a Georgia
corporation (the "Borrower") in connection with the Credit Agreement (the
"Credit Agreement") dated as of November 1, 1999, among the Borrower, the banks
listed on the signature pages thereof, Wachovia Bank, N.A., as Administrative
Agent and First Union National Bank, as Syndication Agent. We have also acted as
counsel for IRT Capital Corporation II, a Georgia corporation ("IRT Capital"),
IRT Partners L.P., a Georgia limited partnership ("IRT Partners"), IRT
Management Company, a Georgia corporation ("IRT Management", IRT Management,
together with IRT Capital and IRT Partners, each individually a "Georgia
Guarantor" and collectively, the "Georgia Guarantors")), and IRT Alabama, Inc.,
an Alabama corporation ("IRT Alabama", and together with the Georgia Guarantors,
each individually a "Guarantor" and collectively, the "Guarantors").
In connection with this opinion, we have examined originals or
photostatic or certified copies of the following documents: (i) the Credit
Agreement; (ii) each of the Notes dated as of the date hereof; (iii) the
Guaranty Agreement; and (iv) the Contribution Agreement (collectively, the
"Credit Documents"). We have examined originals or copies, certified or
otherwise identified to our satisfaction, of such other documents, corporate
records, certificates of public officials and other instruments and have
conducted such other investigations of fact and law as we have deemed necessary
or advisable for purposes of this opinion.
In rendering this opinion, we have assumed (i) the genuineness
of all signatures of, and the authority of, all persons signing all agreements
and documents on behalf of the parties thereto other than the Borrower and the
Guarantors; (iii) the authenticity of all documents submitted to us as
originals; (iv) the conformity to authentic original documents of all documents
83
<PAGE> 89
submitted to us as photostatic or certified copies; (v) the due authorization,
execution and delivery of all agreements and documents by all parties thereto
other than the Borrower and the Guarantors; (vi) the legal right and power of
all such parties other than the Borrower and the Guarantors under all applicable
laws and regulations to enter into, execute and deliver such agreements and
documents; (vii) that such agreements and documents and are the legal, valid and
binding obligations of all parties thereto (other than the Borrower and
Guarantors) enforceable against such parties in accordance with their terms.
This opinion letter is limited by, and is in accordance with,
the January 1, 1992 edition of the Interpretive Standards applicable to
Legal Opinions to Third Parties in Corporate Transactions adopted by
the Legal Opinion Committee of the Corporate and Banking Law Section of
the State Bar of Georgia, which Interpretative Standards are
incorporated in this opinion letter by this reference. Capitalized
terms used in this opinion letter and the attachments hereto and not
otherwise defined herein shall have the meanings assigned to such terms
in the Interpretive Standards and/or the Credit Agreement.
As to factual matters forming a basis of our opinions,
whenever an opinion with respect to existence or absence of a fact or an opinion
which is based in whole or in part on the existence or absence of the fact is
qualified by the phrase "to our knowledge," or words to that effect, it is
intended to indicate that we have no actual knowledge that any such fact is
inaccurate, and further that any such statement is limited to the current
awareness of Ralph F. MacDonald, Mark Nance and Andrea Goodrich (the "Primary
Lawyer Group"), the attorneys involved in our representation of the Borrower and
Guarantors in connection with the matters described herein. In this connection,
we have relied, with your permission, upon the articles or certificate of
incorporation and bylaws of the Borrower and each Guarantor, upon certificates
of public officials, upon the representations and warranties contained in the
Credit Documents to the extent the same relate to matters of fact relevant to
the opinions expressed herein and an officer's certificate attached hereto as
Exhibit B. We have no reason to believe that such items are not true and correct
in all material respects.
The opinions set forth herein are limited to the laws of the
State of Georgia, applicable federal laws and, solely for purposes of the
opinions set forth in paragraphs 4 and 5(i) and (ii), the Alabama Business
Corporation Code.
Upon the basis of the foregoing, and subject to the
qualifications hereinafter set forth or incorporated herein, we are of the
opinion that:
1. The Borrower is a corporation, validly existing and in good
standing under the laws of Georgia and has all corporate powers required to
carry on its business as now conducted.
2. Each Georgia Guarantor (other than IRT Partners) is a
corporation, validly existing and in good standing under the laws of Georgia and
has all corporate powers required to carry on its business as now conducted.
84
<PAGE> 90
3. IRT Partners is a limited partnership, validly existing and
in good standing under the laws of Georgia and has all powers required to carry
on its business as now conducted.
4. IRT Alabama is a corporation, validly existing and in good
standing under the laws of Alabama and has all corporate powers required to
carry on its business as now conducted.
5. The execution, delivery and performance by the Borrower of
the Credit Agreement and the Notes and of the Guaranty by the Guarantors (i) are
within the Borrower's and each Guarantor's powers, (ii) have been duly
authorized by all necessary corporate or partnership action, as applicable,
(iii) require no action by or in respect of, or filing with, any governmental
body, agency or official, (iv) do not contravene, or constitute a default under,
any provision of applicable law or regulation or of the organizational documents
of the Borrower or any Guarantor or any judgment, injunction, order, decree or
any Material Contract which to our knowledge is binding upon the Borrower or any
Guarantor and (v) to our knowledge, except as provided in the Credit Agreement,
do not result in the creation or imposition of any Lien on any asset of the
Borrower or any of its Subsidiaries. With your permission we have assumed that
the term "Material Contracts" used above includes only those agreements set
forth on Exhibit C hereto.
6. The Credit Agreement, the Notes and the Guaranty are
enforceable.
7. Neither the Borrower nor any of its Subsidiaries is an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
8. Neither the Borrower nor any of its Subsidiaries is a
"holding company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company", as such terms are defined in the Public Utility Holding Company Act of
1935, as amended.
Based upon the limitations and qualifications set forth above
and incorporated herein, we confirm to you that, to our knowledge, there is no
action, suit or proceeding pending, or threatened, against or affecting the
Borrower or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official in which there is a reasonable possibility
of an adverse decision which could materially adversely affect the business,
consolidated financial position or consolidated results of operations of the
Borrower and its Consolidated Subsidiaries, considered as a whole, or which in
any manner questions the validity or enforceability of the Credit Agreement, any
Note or the Guaranty. The foregoing confirmation is based solely upon the
current awareness of the Primary Lawyer Group and the officer's certificate,
provided, however, that the determination of materiality is based solely on the
officer's certificate. Furthermore, we have made no examination of our files,
the files of the Borrower or its Subsidiaries or the plaintiff or defendant
indices of any federal, state or other court or any other tribunal to determine
the existence of any suits or proceedings pending or threatened against the
Borrower or its Subsidiaries.
We are qualified to practice in the State of Georgia and do
not purport to be experts on any laws other than the laws of the United States
and the State of Georgia and, except
85
<PAGE> 91
with respect to matters under the Alabama Business Corporation Act discussed in
paragraphs 4, 5(i) and 5(ii), this opinion is rendered only with respect to such
laws. We have made no independent investigation of the laws of any other
jurisdiction. This opinion is limited to the matters stated herein and no
opinion is implied or may be inferred beyond the matters expressly stated.
Opinions rendered herein are as of the date hereof, and we make no undertaking
and expressly disclaim any duty to supplement such opinions if, after the date
hereof, facts and circumstances come to our attention or changes in the law
occur which could affect such opinions.
This opinion is delivered to you in connection with the
transaction referenced above and may only be relied upon by you, any Assignee,
Participant or other Transferee under the Credit Agreement, and Jones, Day,
Reavis & Pogue without our prior written consent.
Very truly yours,
ALSTON & BIRD LLP
By:
----------------------------
A Partner
86
<PAGE> 92
EXHIBIT A
Wachovia Bank, N.A.
First Union National Bank
AmSouth Bank
SouthTrust Bank, N.A.
SunTrust Bank, Atlanta
87
<PAGE> 93
EXHIBIT B
OFFICER'S CERTIFICATE
(Attached)
88
<PAGE> 94
EXHIBIT C
MATERIAL CONTRACTS
89
<PAGE> 95
EXHIBIT C
OPINION OF
JONES, DAY, REAVIS & POGUE, SPECIAL COUNSEL
FOR THE ADMINISTRATIVE AGENT
[Dated as provided in Section 3.01 of
the Credit Agreement]
To the Banks and the Administrative Agent
Referred to Below
c/o Wachovia Bank, N.A.,
as Administrative Agent
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attn: Syndications Group
Dear Sirs:
We have participated in the preparation of the Credit
Agreement (the "Credit Agreement") dated as of IRT Property Company, a Georgia
corporation (the "Borrower"), the banks listed on the signature pages thereof
(the "Banks"), Wachovia Bank, N.A., as Administrative Agent (the "Administrative
Agent") and First Union National Bank, as Syndication Agent, and have acted as
special counsel for the Administrative Agent for the purpose of rendering this
opinion pursuant to Section 3.01(d) of the Credit Agreement. Terms defined in
the Credit Agreement and not defined herein are used herein as therein defined.
This opinion letter is limited by, and is in accordance with,
the January 1, 1992 edition of the Interpretive Standards applicable to Legal
Opinions to Third Parties in Corporate Transactions adopted by the Legal Opinion
Committee of the Corporate and Banking Law Section of the State Bar of Georgia
which Interpretive Standards are incorporated herein by this reference.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as we have deemed necessary or advisable
for purposes of this opinion.
Upon the basis of the foregoing, and assuming the due
authorization, execution and delivery of the Credit Agreement and each of the
Notes by or on behalf of the Borrower, and of the Guaranty by IRT Capital
Corporation II, a Georgia corporation, IRT Partners L.P., a Georgia limited
partnership, IRT Management Company, a Georgia corporation and IRT Alabama,
Inc., an Alabama corporation (each individually a "Guarantor" and collectively,
the "Guarantors") we are of the opinion that:
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<PAGE> 96
1. The Credit Agreement and the Notes constitute valid and
binding agreements of the Borrower and the Guaranty constitutes valid and
binding obligations of the Guarantors, in each case enforceable in accordance
with its terms except as: (i) the enforceability thereof may be affected by
bankruptcy, insolvency, reorganization, fraudulent conveyance, voidable
preference, moratorium or similar laws applicable to creditors' rights or the
collection of debtors' obligations generally; (ii) rights of acceleration and
the availability of equitable remedies may be limited by equitable principles of
general applicability; and (iii) the enforceability of certain of the remedial,
waiver and other provisions of the Credit Agreement and the Notes may be further
limited by the laws of the State of Georgia; provided that such additional laws
do not, in our opinion, substantially interfere with the practical realization
of the benefits expressed in the Credit Agreement and the Notes, except for the
economic consequences of any procedural delay which may result from such laws.
2. The obligations of the Borrower to the Administrative Agent
and the Banks under the Credit Agreement (the "Bank Obligations") constitute
"Existing Senior Indebtedness", as defined in Section 2.8 of the Supplemental
Indenture No. 3 dated as of September 9, 1998 executed by the Borrower, as the
"Company", IRT Partners L.P., as the "Guarantor" and SunTrust Bank, Atlanta, as
the "Trustee", supplementing the Indenture dated as of November 9, 1995, as
amended, a form of which has been filed with the Securities and Exchange
Commission under the Securities Act of 1933, as an exhibit to the Borrower's
Registration Statement on Form S-3 (Registration No. 33-63523), providing for
the issuance from time to time of senior debt securities, and in the event any
"Guaranty Proceeds" (as defined in such Section 2.8) are received thereunder,
the Administrative Agent and the Banks would be entitled to receive an equal and
ratable distribution thereof pursuant to such Section 2.8, based on the
principal amount of the Bank Obligations then outstanding at the time of such
distribution.
In giving the foregoing opinions, we express no opinion as to
the effect (if any) of any law of any jurisdiction except the State of Georgia.
We express no opinion as to the effect of the compliance or noncompliance of the
Administrative Agent or any of the Banks with any state or federal laws or
regulations applicable to the Administrative Agent or any of the Banks by reason
of the legal or regulatory status or the nature of the business of the
Administrative Agent or any of the Banks.
This opinion is delivered to you in connection with the
transaction referenced above and may only be relied upon by you and any
Assignee, Participant or other Transferee under the Credit Agreement without our
prior written consent.
Very truly yours,
91
<PAGE> 97
EXHIBIT D
ASSIGNMENT AND ACCEPTANCE
Dated ________________ ___, ______
Reference is made to the Credit Agreement dated as of November
1, 1999 (together with all amendments and modifications thereto, the "Credit
Agreement") among IRT Property Company, a Georgia corporation (the "Borrower"),
the Banks (as defined in the Credit Agreement), Wachovia Bank, N.A., as
Administrative Agent (the "Administrative Agent") and First Union National Bank,
as Syndication Agent. Terms defined in the Credit Agreement are used herein with
the same meaning.
__________________________ (the "Assignor") and
_________________________________________(the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee,
without recourse to the Assignor, and the Assignee hereby purchases and assumes
from the Assignor, a _______% interest in and to all of the Assignor's rights
and obligations under the Credit Agreement as of the Effective Date (as defined
below) (including, without limitation, a _______% interest (which on the
Effective Date hereof is $__________) in the Assignor's Commitment and a
________ interest (which on the Effective Date hereof is $________)
in the Syndicated Loans [and Money Market Loans] owing to the Assignor and a
____% interest in the Note[s] held by the Assignor (which on the Effective Date
hereof is $__________).
2. The Assignor (i) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement or any other instrument or document furnished pursuant
thereto, other than that it is the legal and beneficial owner of the interest
being assigned by it hereunder, that such interest is free and clear of any
adverse claim and that as of the date hereof its Commitment (without giving
effect to assignments thereof which have not yet become effective) is
$__________ and the aggregate outstanding principal amount of Syndicated Loans
[and Money Market Loans] owing to it (without giving effect to assignments
thereof which have not yet become effective) is $________; (ii) makes
no representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or the performance or observance by the
Borrower of any of its obligations under the Credit Agreement or any other
instrument or document furnished pursuant thereto; and (iii) attaches the
Note[s] referred to in paragraph 1 above and requests that the Administrative
Agent exchange such Note[s] for [a new Syndicated Loan Note dated
______________, _______ in the principal amount of $__________ payable to the
order of the Assignee and a new Money Market Loan Note dated ___________, ___ in
the principal amount of $___ payable to the order of the Assignee]
[new Notes as follows: a (i) Syndicated Loan Note dated __________________,
_____ in the principal amount of $_____ payable to the order of the
Assignor (ii) Syndicated Loan Note dated _______________, _______ in the
principal amount of $____ payable to the order of the Assignee,
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<PAGE> 98
and (iii) and a new Money Market Loan Note dated ___________, ____ in the
principal amount of $___ payable to the order of the Assignee].
3. The Assignee (i) confirms that it has received a copy of
the Credit Agreement, together with copies of the financial statements referred
to in Section 4.04(a) thereof (or any more recent financial statements of the
Borrower delivered pursuant to Section 5.01(a) or (b) thereof) and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance; (ii) agrees
that it will, independently and without reliance upon the Administrative Agent,
the Assignor or any other Bank and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Credit Agreement; (iii) confirms that it
is a bank or financial institution; (iv) appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers under the Credit Agreement as are delegated to the Administrative
Agent by the terms thereof, together with such powers as are reasonably
incidental thereto; (v) agrees that it will perform in accordance with their
terms all of the obligations which by the terms of the Credit Agreement are
required to be performed by it as a Bank; (vi) specifies as its Lending Office
(and address for notices) the office set forth beneath its name on the signature
pages hereof, (vii) represents and warrants that the execution, delivery and
performance of this Assignment and Acceptance are within its corporate powers
and have been duly authorized by all necessary corporate action, (viii) makes
the representation and warranty contained in Section 9.18 of the Credit
Agreement[, and (ix) attaches the forms prescribed by the Internal Revenue
Service of the United States certifying as to the Assignee's status for purposes
of determining exemption from United States withholding taxes with respect to
all payments to be made to the Assignee under the Credit Agreement and the Notes
or such other documents as are necessary to indicate that all such payments are
subject to such taxes at a rate reduced by an applicable tax treaty].
4. The Effective Date for this Assignment and Acceptance shall
be _______________, _____(the "Effective Date"). Following the execution of this
Assignment and Acceptance, it will be delivered to the Administrative Agent for
execution and acceptance by the Administrative Agent and to the Borrower for
execution by the Borrower.
5. Upon such execution and acceptance by the Administrative
Agent [and execution by the Borrower] [IF REQUIRED BY THE CREDIT AGREEMENT],
from and after the Effective Date, (i) the Assignee shall be a party to the
Credit Agreement and, to the extent rights and obligations have been transferred
to it by this Assignment and Acceptance, have the rights and obligations of a
Bank thereunder and (ii) the Assignor shall, to the extent its rights and
obligations have been transferred to the Assignee by this Assignment and
Acceptance, relinquish its rights (other than under Sections 8.03, 9.03 and 9.04
of the Credit Agreement) and be released from its obligations under the Credit
Agreement.
6. Upon such execution and acceptance by the Administrative
Agent [and execution by the Borrower] [IF REQUIRED BY THE CREDIT AGREEMENT],
from and after the Effective Date, the Administrative Agent shall make all
payments in respect of the interest assigned hereby to the Assignee. The
Assignor and Assignee shall make all appropriate adjustments in payments for
periods prior to such acceptance by the Administrative Agent directly between
themselves.
93
<PAGE> 99
7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of Georgia.
[NAME OF ASSIGNOR]
By:
-------------------------------------
Title:
[NAME OF ASSIGNEE]
By:
-------------------------------------
Title:
Lending Office:
[Address]
WACHOVIA BANK, N.A.,
As Administrative Agent
By:
-------------------------------------
Title:
IRT PROPERTY COMPANY
IF REQUIRED BY THE CREDIT AGREEMENT
BY:
-------------------------------------
TITLE:
94
<PAGE> 100
EXHIBIT E-1
NOTICE OF BORROWING
----------------- ----, -----
Wachovia Bank, N.A., as Administrative Agent
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attention: Syndications Group
Re: Credit Agreement (as amended and modified from time to time,
the "Credit Agreement") dated as of November 1, 1999 by and
among IRT Property Company(1), the Banks from time to time
parties thereto, Wachovia Bank, N.A., as Administrative Agent
and First Union National Bank, as Syndication Agent.
Gentlemen:
Unless otherwise defined herein, capitalized terms used herein
shall have the meanings attributable thereto in the Credit Agreement.
This Notice of Borrowing is delivered to you pursuant to
Section 2.02 of the Credit Agreement.
The Borrower hereby requests a [Euro-Dollar Borrowing] [Base
Rate Borrowing] in the aggregate principal amount of $__________ to be made on
______________, 199____, and for interest to accrue thereon at the rate
established by the Credit Agreement for [Euro-Dollar Loans] [Base Rate Loans].
[The duration of the Interest Period with respect thereto shall be [1 month] [2
months] [3 months] [6 months]].
The amount available to be borrowed under Section 2.01 of the
Credit Agreement, net of amounts to be paid with the proceeds of this Borrowing,
is as follows:
<TABLE>
<S> <C> <C>
(a) Aggregate amount of Commitments $
--------------
(b) Borrowing Base per most recent Borrowing Base Certificate
$
--------------
(c) Principal amount outstanding under Syndicated Loans
$
--------------
</TABLE>
- --------------------
(1) Change to IRT Partners L.P. after satisfaction of all Top Level
Reorganization Conditions.
95
<PAGE> 101
<TABLE>
<S> <C> <C>
(d) Principal amount outstanding under Money Market Loans
$
--------------
(e) Amount available to be borrowed (lesser of (a) or (b), less
sum of (c), (d) and (e) $______ $
--------------
</TABLE>
The Borrower has caused this Notice of Borrowing to be
executed and delivered by its duly authorized officer this _________ day of
______________, _____.
IRT PROPERTY COMPANY(1)
By:
-------------------------------------
Title:
- ---------------
(1) Change to IRT Partners L.P. after satisfaction of all Top Level
Reorganization Conditions.
96
<PAGE> 102
EXHIBIT E-2
NOTICE OF CONTINUATION OR CONVERSION
---------------------, -----
Wachovia Bank, N.A., as Administrative Agent
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attention: Syndications Group
Re: Credit Agreement (as amended and modified from time to time,
the "Credit Agreement") dated as of November 1, 1999 by and
among IRT Property Company(1), the Banks from time to time
parties thereto, Wachovia Bank, N.A., as Administrative Agent
and First Union National Bank, as Syndication Agent.
Gentlemen:
Unless otherwise defined herein, capitalized terms used herein
shall have the meanings attributable thereto in the Credit Agreement.
This Notice of Continuation or Conversion is delivered to you
pursuant to Section 2.04 of the Credit Agreement.
With respect to the [Euro-Dollar Loans] [Base Rate Loans] in
the aggregate amount of $ [which has an Interest Period ending on
_____________,] the Borrower hereby requests that such loan be [converted to a
Base Rate Loan] [converted to a Euro-Dollar Loan][continued as a Euro-Dollar
Loan] in the aggregate principal amount of $__________ to be made on such date,
and for interest to accrue thereon at the rate established by the Credit
Agreement for [Base Rate Loans] [Euro-Dollar Loans]. [The duration of the
Interest Period with respect thereto shall be [1 month] [2 months] [3 months] [6
months]].
The Borrower has caused this Notice of Continuation or
Conversion to be executed and delivered by its duly authorized officer this
______ day of ____________, ____.
IRT PROPERTY COMPANY(2)
*
By:
-------------------------------------
Title:
- ------------
(1) Change to IRT Partners L.P. after satisfaction of all Top Level
Reorganization Conditions.
(2) Change to IRT Partners L.P. after satisfaction of all Top Level
Reorganization Conditions.
97
<PAGE> 103
EXHIBIT F
COMPLIANCE CERTIFICATE
Reference is made to the Credit Agreement dated as of November
1, 1999 (as modified and supplemented and in effect from time to time, the
"Credit Agreement") by and among IRT Property Company(1), the Banks from time to
time parties thereto, Wachovia Bank, N.A., as Administrative Agent and First
Union National Bank, as Syndication Agent. Capitalized terms used herein shall
have the meanings ascribed thereto in the Credit Agreement; all amounts shown
herein, unless expressly set forth to the contrary, shall be without
duplication.
Pursuant to Section 5.01(c) of the Credit Agreement,
_____________, the duly authorized __________ of the Borrower, hereby (i)
certifies to the Administrative Agent and the Banks that the information
contained in the Compliance Check List attached hereto is true, accurate and
complete as of _________, _____, and that, to the best or our knowledge, no
Default is in existence on and as of the date hereof and (ii) restates and
reaffirms that the representations and warranties contained in Article IV of the
Credit Agreement are true on and as of the date hereof as though restated on and
as of this date (except to the extent any such representation or warranty is
expressly made as of a prior date).
IRT PROPERTY COMPANY.,
a Georgia corporation
By:
-------------------------------------
Its:
- ----------------
(1) Change to IRT Partners L.P. after satisfaction of all Top Level
Reorganization Conditions.
98
<PAGE> 104
COMPLIANCE CHECK LIST
IRT PROPERTY COMPANY
-------------------------------
-----------------, ------
1. Consolidations, Mergers and Sales of Assets (Section 5.05)
The Borrower and the Parent will not, nor will they
permit any Subsidiary to, consolidate or merge with or into, or sell,
lease or otherwise transfer all or any substantial part of its assets
to, any other Person, or discontinue or eliminate any business line or
segment, provided that (a) the Top Level Reorganization may be
consummated, subject to satisfaction of the Top Level Reorganization
Conditions, and the Borrower may merge with another Person if (i) such
Person was organized under the laws of the United States of America or
one of its states, (ii) the Borrower is the corporation surviving such
merger and (iii) immediately after giving effect to such merger, no
Default shall have occurred and be continuing, (b) Subsidiaries of the
Borrower/Parent may merge with one another, and with the Borrower (c)
Subsidiaries of the Borrower/Parent may merge with any other Person, so
long as (i) such Person was organized under the laws of the United
States of America or one of its states (ii) such Person shall become a
Subsidiary immediately upon consummation of such merger (and if the
merging Subsidiary was a Guarantor and is not the corporation surviving
such merger, such Person shall comply with Section 5.27) and (iii)
immediately after giving effect to such merger, no Default shall have
occurred and be continuing, and (d) the foregoing limitation on the
sale, lease or other transfer of assets and on the discontinuation or
elimination of a business line or segment shall not prohibit, (A)
sales, leases or transfers of assets between Guarantors or between any
Guarantor and the Borrower, or transfers pursuant to the Top Level
Reorganization, subject to satisfaction of the Top Level Reorganization
conditions, or (B) during any Fiscal Quarter, a transfer of assets or
the discontinuance or elimination of a business line or segment (in a
single transaction or in a series of related transactions) unless the
aggregate assets to be so transferred or utilized in a business line or
segment to be so discontinued, when combined with all other assets
transferred, and all other assets utilized in all other business lines
or segments discontinued, during such Fiscal Quarter and the
immediately preceding 3 Fiscal Quarters, either (x) constituted more
than 15% of Consolidated Total Assets at the end of the most recent
Fiscal Year immediately preceding such Fiscal Quarter, or (y)
contributed more than 15% of Consolidated Operating Profits during the
4 Fiscal Quarters immediately preceding such Fiscal Quarter.
<TABLE>
<S> <C> <C>
(a) Aggregate amount of assets sold during Fiscal Quarter
just ended $
-----------
(b) Aggregate amount of assets sold during 3 prior Fiscal Quarters
$
-----------
</TABLE>
99
<PAGE> 105
<TABLE>
<S> <C> <C>
(c) Sum of (a) and (b)
$
-----------
(d) Consolidated Total Assets
$
-----------
(e) 15% of (d)
$
-----------
Limitation: (c) may not exceed (e)
(f) aggregate amount of Consolidated Operating Profit contributed by
assets sold during Fiscal Quarter just ended $
-----------
(g) aggregate amount of Consolidated Operating Profit contributed by
assets sold during 3 prior Fiscal Quarters $
-----------
(h) sum of (f) and (g)
$
-----------
(i) Total Consolidated Operating Profits during Fiscal Quarter just
ended and 3 prior Fiscal Quarters $
-----------
(j) 15% of (i) $
-----------
Limitation: (h) may not exceed (j) ---------
</TABLE>
2. Restricted Payments (Section 5.15)(1)
The Borrower's/Parent's Restricted Payments in any calendar
year shall not exceed (i) as to purchases of Capital Stock in
connection with any Stock Buyback Plan, acquisition of shares
in any 12 month period in excess of 10% of all of the
Borrower/Parent's Capital Stock outstanding at the beginning
of such period, and (ii) as to other Restricted Payments, 95%
of Funds From Operations for such period.
- ----------
(1) Include this paragraph 2 and Schedule 1 only with the first Compliance
Certificate furnished after the end of each Fiscal Year.
100
<PAGE> 106
<TABLE>
<S> <C> <C>
(a) Acquisitions of shares pursuant to a Stock Buyback Plan
during last 12 months $
-----------
(b) Capital Stock of Borrower/Parent at the beginning of
such 12 month period $
-----------
(c) 10% of (b)
$
-----------
(d) Limitation: (a) may not exceed (c)
(e) Other Restricted Payments for current calendar year
$
-----------
(f) Funds From Operations for current calendar year Schedule 1
$
-----------
(g) 95% of (f)
Limitation: (e) may not exceed (g) $
-----------
</TABLE>
101
<PAGE> 107
3. Investments (Section 5.16)
Neither the Borrower, the Parent nor any of its Subsidiaries
shall make Investments in any Person except (i) loans or
advances to employees not exceeding $10,000,000 in the
aggregate principal amount outstanding at any time, in each
case made in the ordinary course of business and consistent
with practices existing on December 31, 1998; (ii) deposits
required by government agencies or public utilities, (ii)
Investments in direct obligations of the United States
Government maturing within one year, (iii) Investments in
certificates of deposit issued by a commercial bank whose
credit is satisfactory to the Administrative Agent, (iv)
Investments in commercial paper rated A1 or the equivalent
thereof by S&P or P1 or the equivalent thereof by Moody's and
in either case maturing within 6 months after the date of
acquisition, (v) Investments in tender bonds the payment of
the principal of and interest on which is fully supported by a
letter of credit issued by a United States bank whose
long-term certificates of deposit are rated at least AA or the
equivalent thereof by S&P and Aa or the equivalent thereof by
Moody's, (vi) Investments existing on the Closing Date, (vii)
Investments in Guarantors (or in any Person which, upon the
making of such Investment, becomes a Guarantor pursuant to
Section 5.27) and (viii) other Investments which do not at any
time exceed an aggregate amount outstanding equal to (1) at
any time during which the Borrower's Debt Rating is both BBB
or better by S&P and Baa2 or better by Moody's 20% of
Consolidated Total Assets, and (2) at any other time, 15% of
Consolidated Total Assets; provided, however, immediately
after giving effect to the making of any Investment, no
Default shall have occurred and be continuing.
<TABLE>
<S> <C> <C>
(a) Loans and advances to employees $
----------
Limitation
$10,000,000
(b) Other Investments not permitted by clauses (ii) through (vii) $
----------
(c) Consolidated Total Assets
$
----------
(d) [20%][15%] of (c)
$
----------
Limitation: (b) may not exceed (d)
</TABLE>
4. Additional Debt (Section 5.19)
Neither the Borrower, the Parent nor any Subsidiary will
create, incur, assume or suffer to exist any Debt except (i)
Debt in existence on the Closing Date; (ii) Debt of
102
<PAGE> 108
any Guarantor to the Borrower or to any other Guarantor, (iii)
other unsecured revolving credit in an aggregate outstanding
principal amount not at any time exceeding $15,000,000, (iv)
publicly held debt having a maturity later than the
Termination Date, and (v) other Debt which is privately held
and which does not constitute revolving credit (including Debt
included in Consolidated Total Secured Debt, so long as it is
not revolving credit, and subject to the provisions of
Sections 5.17 and 5.21).
<TABLE>
<S> <C> <C>
a) Unsecured revolving credit not permitted by clauses (i)
and (ii) $
-----------
Limitation: $ 15,000,000
</TABLE>
5. Ratio of Consolidated Total Liabilities to Consolidated Total
Asset Value (Section 5.20) The ratio of Consolidated Total
Liabilities to Consolidated Total Asset Value shall at all
times be equal to or less than 0.55 to 1.0
<TABLE>
<S> <C> <C>
(a) Consolidated Total Liabilities Schedule 2 $
-----------
(b) Consolidated Total Asset Value Schedule 3 $
-----------
(c) Actual ratio of (a) to (b) __ to 1.0
Maximum Ratio 0.55 to 1.0
</TABLE>
6. Ratio of Consolidated Total Secured Debt to Consolidated Total Asset
Value (Section 5.21)
The ratio of Consolidated Total Secured Debt to Consolidated
Total Asset Value shall at all times be equal to or less than
0.35 to 1.0.
<TABLE>
<S> <C> <C>
(a) Consolidated Total Secured Debt Schedule 4 $
-----------
(b) Consolidated Total Asset Value Schedule 3 $
-----------
(c) Actual ratio of (a) to (b)
____ to 1.0
Maximum Ratio 0.35 to 1.0
</TABLE>
7. Ratio of Consolidated EBITDA to Consolidated Interest Expense (Section
5.22)
103
<PAGE> 109
The ratio of Consolidated EBITDA to Consolidated Interest
Expense actually incurred for the Fiscal Quarter just ended
will not be less than 2.0 to 1.0.
<TABLE>
<S> <C> <C>
(a) Consolidated EBITDA Schedule 5 $
-----------
(b) Consolidated Interest Expense $
-----------
(c) Ratio of (a) to (b) to 1.0
_____ to 1.0
Minimum Ratio 2.0 to 1.0
</TABLE>
8. Ratio of Consolidated Unencumbered Real Estate Assets to Consolidated
Unsecured Senior Debt (Section 5.23)
The ratio of Consolidated Unencumbered Real Estate Assets to
Consolidated Unsecured Senior Debt shall at all times be
greater than 1.65 to 1.00.
<TABLE>
<S> <C>
(a) Net Operating Income from each Property not subject to a
Mortgage Schedule 6 $
-------------
(b) (a) divided by 0.0975 $
-------------
(c) 4 times (b) $
-------------
(d) acquisition cost of improved Properties not subject to
a Mortgage owned by Borrower or any Consolidated Entity
less than three months, as determined on the last day
of the Fiscal Quarter just ended; plus $
-------------
(e) book value of all Construction in Progress not subject
to a Mortgage and Book Value of unimproved land not
subject to a Mortgage $
-------------
(f) sum of (c), (d) and (e) $
-------------
(g) Consolidated Unsecured Senior Debt Schedule 7 $
-------------
(h) Actual ratio of (f) to (g) _____ to 1.0
Minimum Ratio 1.65 to 1.0
</TABLE>
104
<PAGE> 110
9. Ratio of Consolidated Unencumbered Net Operating Income to Consolidated
Unsecured Interest Expense (Section 5.24)
The ratio of Consolidated Unencumbered Net Operating Income to
Consolidated Unsecured Interest Expense shall at all times be
greater than 2.0 to 1.00.
<TABLE>
<S> <C> <C>
a) Consolidated Unencumbered Net Operating Income Schedule 6 $
-------------
b) Consolidated Unsecured Interest Expense $
-------------
c) Actual ratio of (a) to (b) _____ to 1.0
Minimum Ratio 2.0 to 1.0
</TABLE>
10. Ratio of Consolidated EBITDA to Consolidated Fixed Charges (Section
5.25)
The ratio of Consolidated EBITDA to Consolidated Fixed
Charges, in each case for the Fiscal Quarter just ended and
the 3 immediately preceding Fiscal Quarters, shall at all
times exceed 1.5 to 1.00.
<TABLE>
<S> <C> <C>
(a) Consolidated EBITDA Schedule 5 $
-------------
(b) Consolidated Fixed Charges Schedule 8
$
-------------
(c) Ratio of (a) to (b) to 1.0
_____ to 1.0
Minimum Ratio 1.5 to 1.0
</TABLE>
105
<PAGE> 111
SCHEDULE 1
FUNDS FROM OPERATIONS
(for Fiscal Year just ended)(1)
<TABLE>
<S> <C>
GAAP Net income
$
-------------
plus depreciation and amortization of real estate assets $
-------------
plus net loss/(gain) on real estate sales $
-------------
plus loss/(gains) on extraordinary $
-------------
Without duplication, Funds From Operations from unconsolidated entities $
-------------
FUNDS FROM OPERATIONS $
-------------
</TABLE>
- -----------------
(1) The calculation is subject to change as required by NAREIT, subject to the
provisions of Section 1.02.
106
<PAGE> 112
SCHEDULE 2
CONSOLIDATED TOTAL LIABILITIES
<TABLE>
<S> <C>
Total Liabilities(1)
$
-------------
Debt Guaranteed by Borrower or any
Guarantor $
-------------
CONSOLIDATED TOTAL LIABILITIES (sum of (a) and (b)) $
-------------
</TABLE>
- -----------------
(1) Include liabilities on account of Dividends, whether paid or declared but
not yet paid.
107
<PAGE> 113
SCHEDULE 3
CONSOLIDATED TOTAL ASSET VALUE
<TABLE>
<S> <C> <C>
(a) Net Operating Income for the 3 month period ending on
the last day of the month just ended prior to the date
of determination, from each Property owned for three
months or longer(1) $
-------------
(b) divided by 0.0975 $
-------------
(c) 4 times (b) $
-------------
(d) book value of Construction in Progress and unimproved land $
-------------
(e) acquisition cost of improved Property owned by Borrower for less
than three months $
-------------
(f) sum of unrestricted balances on deposit with banks or other
financial institutions and all restricted cash held by a Qualified
Intermediary on behalf of the Borrower/Parent or any Guarantor $
-------------
(g) for all non-Wholly Owned Subsidiaries, the book value of the
Ownership Percentage of such Subsidiary $
-------------
(h) book value of all other Consolidated Tangible Assets $
-------------
CONSOLIDATED TOTAL ASSET VALUE (sum of (c)
through (h)) $
-------------
</TABLE>
- -----------------
(1) Exclude percentage rents received during such period, but including an
amortized value for percentage rents received during the current Fiscal Year.
108
<PAGE> 114
SCHEDULE 4
CONSOLIDATED TOTAL SECURED DEBT(1)
<TABLE>
<CAPTION>
INTEREST FINAL
RATE(2) MATURITY TOTAL
-------- -------- ---------
<S> <C> <C> <C>
MONEY BORROWED
$
---------------------------------------------- -------- -------- ---------
$
---------------------------------------------- -------- -------- ---------
$
---------------------------------------------- -------- -------- ---------
$
---------------------------------------------- -------- -------- ---------
$
---------------------------------------------- -------- -------- ---------
Total Money Borrowed $
---------
DEFERRED PURCHASE PRICE OF REAL
PROPERTY
$
---------------------------------------------- -------- -------- ---------
$
---------------------------------------------- -------- -------- ---------
$
---------------------------------------------- -------- -------- ---------
$
---------------------------------------------- -------- -------- ---------
Total Deferred Purchase Price $
---------
CAPITAL LEASES IN WHICH BORROWER IS THE TENANT
$
------------------------------------------------------------------------ ---------
$
------------------------------------------------------------------------ ---------
Total Capital Leases
GUARANTEE OF DEBT OF PERSONS OTHER THAN BORROWER AND GUARANTOR
---------------------------------------------- -------- -------- ---------
---------------------------------------------- -------- -------- ---------
---------------------------------------------- -------- -------- ---------
---------------------------------------------- -------- -------- ---------
---------------------------------------------- -------- -------- ---------
CONSOLIDATED TOTAL
SECURED DEBT $
---------
</TABLE>
- -------------
(1) Include only Debt secured by a Mortgage. The Borrower/Parent may substitute
its own internal spreadsheet for this Schedule, so long as it contains the
relevant information.
(2) If rate is fixed, insert contract rate. If rate is floating, state that.
109
<PAGE> 115
SCHEDULE 5
CONSOLIDATED EBITDA
_____ quarter _____
consolidated net income(1) $ _________
less extraordinary gains $(_________)
plus extraordinary losses $ _________
less gains on sales of assets $(_________)
plus losses on sales of assets $ _________
plus losses from Debt forgiveness $ _________
plus expenses re significant non-recurring events $ _________
plus Consolidated Interest Expense $ _________
plus taxes on income $ _________
plus depreciation and amortization $ _________
plus other non-cash charges $ _________
Total $ _________
Consolidated EBITDA from 3 immediately preceding
Fiscal Quarters, as reported in prior Compliance Certificates $ _________
Total $ _________
Consolidated EBITDA $ _________
- ------------
(1) Exclude minority equity interests.
110
<PAGE> 116
SCHEDULE 6
NET OPERATING INCOME AND CONSOLIDATED UNENCUMBERED NET OPERATING INCOME
Calculation of Net Operating Income:
(for Fiscal Quarter just ended)
_____ quarter _____
<TABLE>
<S> <C> <C>
(a) Property Revenues $
----------
(b) Property expenses (excluding depreciation, amortization
and debt service) $
----------
(c) Management fee (4% of gross rental income, excluding
percentage rents and less any management fees included
in (b)) $
----------
(d) 25% of annual capital reserve ($0.15 per square foot) $
----------
(e) NET OPERATING INCOME (sum of (a) less (b) less (c)
less (d)) $
----------
</TABLE>
111
<PAGE> 117
Calculation of Consolidated Unencumbered Net Operating Income(1)
(for Fiscal Quarter just ended)
_____ quarter _____
<TABLE>
<S> <C> <C>
(a) Property Revenues $
----------
(b) Property expenses (excluding depreciation, amortization
and debt service) $
----------
(c) Management fee (4% of gross rental income, excluding
percentage rents and less any management fees included
in (b)) $
----------
(d) 25% of annual capital reserve ($0.15 per square foot) $
----------
(e) NET OPERATING INCOME (sum of (a) less (b) less (c)
less (d)) $
----------
</TABLE>
- ------------
(1) Include only Properties not subject to a Mortgage.
112
<PAGE> 118
SCHEDULE 7
CONSOLIDATED UNSECURED SENIOR DEBT(1)
<TABLE>
<CAPTION>
INTEREST FINAL
RATE(2) MATURITY TOTAL
-------- -------- ---------
<S> <C> <C> <C>
MONEY BORROWED
$
---------------------------------------------- -------- -------- ---------
$
---------------------------------------------- -------- -------- ---------
$
---------------------------------------------- -------- -------- ---------
$
---------------------------------------------- -------- -------- ---------
$
---------------------------------------------- -------- -------- ---------
Total Money Borrowed $
---------
DEFERRED PURCHASE PRICE(3)
$
---------------------------------------------- -------- -------- ---------
$
---------------------------------------------- -------- -------- ---------
$
---------------------------------------------- -------- -------- ---------
$
---------------------------------------------- -------- -------- ---------
Total Deferred Purchase Price $
---------
CAPITAL LEASES IN WHICH BORROWER IS THE TENANT
$
------------------------------------------------------------------------ ---------
$
------------------------------------------------------------------------ ---------
Total Capital Leases
REDEEMABLE PREFERRED STOCK
$
---------
$
The Redeemable Preferred Stock ---------
LETTER OF CREDIT REIMBURSEMENT OBLIGATIONS
$
------------------------------------------------------------------------ ---------
$
------------------------------------------------------------------------ ---------
Total Letter of Credit
Reimbursement Obligations $
---------
</TABLE>
- -------------
(1) Include only Debt secured by a Mortgage and not subordinated to other
Consolidated Debt. The Borrower/Parent may substitute its own internal
spreadsheet for this Schedule, so long as it contains the relevant information.
(2) If rate is fixed, insert contract rate. If rate is floating, state that.
(3) Exclude trade accounts payable in the ordinary course of business.
113
<PAGE> 119
<TABLE>
<S> <C>
DEBT OF OTHERS SECURED BY A LIEN
$
------------------------------------------------------------------------ -------------
$
------------------------------------------------------------------------ -------------
Total Debt of Others
Secured by a Lien $
-------------
HEDGING ARRANGEMENTS
$
------------------------------------------------------------------------ -------------
$
------------------------------------------------------------------------ -------------
Total Hedging Arrangements $
-------------
FORWARD CONTRACTS FOR PURCHASE OF
EQUITY SECURITIES
$
------------------------------------------------------------------------ -------------
$
------------------------------------------------------------------------ -------------
GUARANTEE OF DEBT OF PERSONS OTHER THAN BORROWER AND GUARANTOR
------------------------------------- -------------- ------------ -------------
------------------------------------- -------------- ------------ -------------
------------------------------------- -------------- ------------ -------------
------------------------------------- -------------- ------------ -------------
------------------------------------- -------------- ------------ -------------
TOTAL CONSOLIDATED
SENIOR DEBT $
-------------
</TABLE>
114
<PAGE> 120
SCHEDULE 8
CONSOLIDATED FIXED CHARGES
<TABLE>
<S> <C>
_____ quarter _____
Consolidated Interest Expense $
---------
plus Dividends paid or declared but not paid on preferred stock $
---------
plus scheduled principal amortization paid(1) $
---------
plus other payments on ground leases $
---------
Total $
---------
Consolidated Fixed Charges from 3 immediately preceding
Fiscal Quarters, as reported in prior Compliance Certificates $
---------
Total $
---------
Consolidated Fixed Charges $
=========
</TABLE>
- ------------
(1)Exclude principal payments under this Agreement or any other agreement
pertaining to revolving debt permitted by Section 5.19(iii) and any balloon,
bullet or similar payments on other Debt.
115
<PAGE> 121
EXHIBIT G
IRT PROPERTY COMPANY
CLOSING CERTIFICATE
Reference is made to the Credit Agreement (the "Credit
Agreement") dated as of November 1, 1999, among IRT Property Company, the Banks
listed therein, Wachovia Bank, N.A., as Administrative Agent and First Union
National Bank, as Syndication Agent. Capitalized terms used herein have the
meanings ascribed thereto in the Credit Agreement.
Pursuant to Section 3.01(e) of the Credit Agreement, James G.
Levy, the duly authorized Senior Vice President of IRT Property Company hereby
certifies to the Administrative Agent and the Banks that (i) no Default has
occurred and is continuing as of the date hereof, and (ii) the representations
and warranties contained in Article IV of the Credit Agreement are true on and
as of the date hereof.
Certified as of November 1, 1999.
By:
-----------------------------------
James G. Levy
Senior Vice President
116
<PAGE> 122
EXHIBIT H
IRT PROPERTY COMPANY
[NOTE: A SIMILAR CERTIFICATE SHOULD BE PREPARED FOR EACH
GUARANTOR AND WITH RESPECT TO THE GUARANTY.]
OFFICER'S CERTIFICATE
The undersigned, __________________________________,
______________________, Secretary of IRT Property Company, a Georgia corporation
(the "Borrower"), hereby certifies that [s]he has been duly elected, qualified
and is acting in such capacity and that, as such, [s]he is familiar with the
facts herein certified and is duly authorized to certify the same, and hereby
further certifies, in connection with the Credit Agreement dated as of November
1, 1999 among the Borrower, Wachovia Bank, N.A. as Administrative Agent and as a
Bank, and certain other Banks listed on the signature pages thereof, that:
1. Attached hereto as Exhibit A is a complete and correct copy
of the Certificate of Incorporation of the Borrower as in full force
and effect on the date hereof as certified by the Secretary of State of
the State of ________________, the Borrower's state of incorporation.
2. Attached hereto as Exhibit B is a complete and correct copy
of the Bylaws of the Borrower as in full force and effect on the date
hereof.
3. Attached hereto as Exhibit C is a complete and correct copy
of the resolutions duly adopted by the Board of Directors of the
Borrower on ____________ ___, 1999 approving, and authorizing the
execution and delivery of, the Credit Agreement, the Notes and the
other Loan Documents (as such terms are defined in the Credit
Agreement) to which the Borrower is a party. Such resolutions have not
been repealed or amended and are in full force and effect, and no other
resolutions or consents have been adopted by the Board of Directors of
the Borrower in connection therewith.
4. __________________, who is ______________________ of the
Borrower signed the Credit Agreement, the Notes and the other Loan
Documents to which the Borrower is a party, was duly elected, qualified
and acting as such at the time [s]he signed the Credit Agreement, the
Notes and other Loan Documents to which the Borrower is a party, and
[his/her] signature appearing on the Credit Agreement, the Notes and
the other Loan Documents to which the Borrower is a party is [his/her]
genuine signature.
117
<PAGE> 123
IN WITNESS WHEREOF, the undersigned has hereunto set [his/her]
hand as of November 1, 1999.
118
<PAGE> 124
EXHIBIT I
MONEY MARKET QUOTE REQUEST
Wachovia Bank, N.A., as Administrative Agent
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attention: Syndications Group
Re: Money Market Quote Request
This Money Market Quote Request is given in accordance with
Section 2.03 of the Credit Agreement (as amended or modified from time to time,
the "Credit Agreement") dated as of November 1, 1999, among IRT Property
Company(1), the Banks from time to time parties thereto, Wachovia Bank, N.A., as
Administrative Agent and First Union National Bank, as Syndication Agent. Terms
defined in the Credit Agreement are used herein as defined therein.
The Borrower hereby requests that the Administrative Agent
obtain quotes for a Money Market Borrowing based upon the following:
1. The proposed date of the Money Market Borrowing shall be
______________, 19_____ (the "Money Market Borrowing Date").(2)
2. The aggregate amount of the Money Market Borrowing shall be
$___.(3)
3. The Stated Maturity Date(s) applicable to the Money Market
Borrowing shall be _____ days.(4)
- - All numbered footnotes appear on the last page of this Exhibit I.
Very truly yours,
IRT PROPERTY COMPANY(5)
By:
-----------------------------------
Title:
Dated:
---------------
- ---------------
(1) Change to IRT Partners L.P. after satisfaction of all Top Level
Reorganization Conditions.
(2) The date must be a Euro-Dollar Business Day.
(3) The amount of the Money Market Borrowing is subject to Section 2.03(a)
and (b).
(4) The Stated Maturity Dates are subject to Section 2.03(b)(iii). The
Borrower may request that up to 2 different Stated Maturity Dates be applicable
to any Money Market Borrowing, provided that (i) each such Stated Maturity Date
shall be deemed to be a separate Money Market Quote Request and (ii) the
Borrower shall specify the amounts of such Money Market Borrowing to be subject
to each such different Stated Maturity Date.
(5) Change to IRT Partners L.P. after satisfaction of all Top Level
Reorganization Conditions.
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<PAGE> 125
EXHIBIT J
MONEY MARKET QUOTE
Wachovia Bank, N.A., as Administrative Agent
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attention: Syndications Group
Re: Money Market Quote to IRT Property Company
This Money Market Quote is given in accordance with Section
2.03(c) of the Credit Agreement (as amended or modified from time to time, the
"Credit Agreement") dated as of November 1, 1999, among IRT Property Company(1)
(the "Borrower"), the Banks from time to time parties thereto, Wachovia Bank,
N.A., as Administrative Agent and First Union National Bank, as Syndication
Agent. Terms defined in the Credit Agreement are used herein as defined therein.
In response to the Borrower's Money Market Quote Request dated
________________, 19___, we hereby make the following Money Market Quote on the
following terms:
1. Quoting Bank:
2. Person to contact at Quoting Bank:
3. _______________________________________ Date of Money
Market Borrowing:(2)
4. We hereby offer to make Money Market Loan(s) in the
following maximum principal amounts for the following
Interest Periods and at the following rates:
<TABLE>
<S> <C> <C>
MAXIMUM STATED
PRINCIPAL MATURITY RATE
AMOUNT(3) DATE(4) PER ANNUM(5)
--------- -------- ------------
</TABLE>
- ----------------
(1) Change to IRT Partners L.P. after satisfaction of all Top Level
Reorganization Conditions.
(2) As specified in the related Money Market Quote Request.
(3) The principal amount bid for each Stated Maturity Date may not exceed
the principal amount requested. Money Market Quotes must be made for at least
$1,000,000 or a larger integral multiple of $500,000.
(4) The Stated Maturity Dates are subject to Section 2.03(b)(iii).
(5) Subject to Section 2.03(c)(ii)(C).
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<PAGE> 126
We understand and agree that the offer(s) set forth above,
subject to the satisfaction of the applicable conditions set forth in the Credit
Agreement, irrevocably obligate(s) us to make the Money Market Loan(s) for which
any offer(s) [is] [are] accepted, in whole or in part (subject to the last
sentence of Section 2.03(c)(i) of the Credit Agreement).
Very truly yours,
[Name of Bank]
By:
-------------------------------
Authorized Officer
Dated:
------------------
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EXHIBIT K
Form of Designation Agreement
Dated __________________, _______
Reference is made to that certain Credit Agreement dated as of
November 1, 1999 (as amended prior to the date hereof and as it may hereafter be
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement") by and among IRT Property Company(1), as the Borrower, the Banks
parties thereto, Wachovia Bank, N.A., as the Administrative Agent (the
"Administrative Agent") and First Union National Bank, as Syndication Agent.
Terms defined in the Credit Agreement are used herein with the same meaning.
[NAME OF DESIGNATING BANK] (the "Designating Bank") and [NAME
OF DESIGNEE] (the "Designee") agree as follows:
1. Pursuant to Section 9.08(g) of the Credit Agreement, the
Designating Bank hereby designates the Designee, and the Designee
hereby accepts such designation, to have a right to make Money Market
Loans pursuant to Section 2.03(h) of the Credit Agreement. Any
assignment by Designating Bank to Designee of its rights to make a
Money Market Loan pursuant to such Section 2.03(h) shall be effective
at the time of the funding of such Money Market Loan and not before
such time.
2. Except as set forth in Section 7, below, the Designating
Bank makes no representation or warranty and assumes no responsibility
pursuant to this Designation Agreement with respect to (a) any
statements, warranties or representations made in or in connection with
any Loan Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of any Loan Document or any other
instrument and document furnished pursuant thereto and (b) the
financial condition of the Borrower or the performance or observance by
the Borrower of any of its obligations under any Loan Document or any
other instrument or document furnished pursuant thereto.
3. The Designee (a) confirms that it has received a copy of
each Loan Document, together with copies of the financial statements
referred to in Sections 4.04 and 5.01(a) and (b) (for periods for which
such financial statements are available) of the Credit Agreement and
such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into this
Designation Agreement; (b) agrees that it will independently and
without reliance upon the Administrative Agent, the Designating Bank or
any other Bank and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under any Loan Document; (c) confirms
that it is a Designated Bank; (d) appoints and authorizes the
Administrative Agent to take such action as the Administrative Agent on
its behalf and to exercise such powers and discretion under any Loan
Document as are delegated to the Administrative
- ------------
(1)Change to IRT Partners L.P. after satisfaction of all Top Level
Reorganization Conditions.
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<PAGE> 128
Agent by the terms thereof, together with such powers and discretion as
are reasonably incidental thereto; and (e) agrees that it will perform
in accordance with their terms all of the obligations which by the
terms of any Loan Document are required to be performed by it as a
Bank.
4. The Designee hereby appoints the Designating Bank as
Designee's Administrative Agent and attorney in fact and grants to the
Designating Bank an irrevocable power of attorney, coupled with an
interest, to receive payments made for the benefit of Designee under
the Credit Agreement, to deliver and receive all communications and
notices under the Credit Agreement and other Loan Documents and to
exercise on Designee's behalf all rights to vote and to grant and make
approvals, waivers, consent of amendments to or under the Credit
Agreement or other Loan Documents. Any document executed by such agent
on the Designee's behalf in connection with the Credit Agreement or
other Loan Documents shall be binding on the Designee. The Borrower,
the Administrative Agent and each of the Banks may rely on and are
beneficiaries of the preceding provisions.
5. Following the execution of this Designation Agreement by
the Designating Bank and its Designee, it will be delivered to the
Borrower for acknowledgment and to the Administrative Agent for
acknowledgment and recording by the Administrative Agent. The effective
date for this Designation Agreement (the "Effective Date") shall be the
date of acknowledgment hereof by the Administrative Agent, unless
otherwise specified on the signature page thereto.
6. The Designating Bank and, by execution of their respective
acknowledgments below, the Borrower and the Administrative Agent, each
hereby (i) acknowledges that the Designee is relying on the
non-petition provisions of Section 9.19 of the Credit Agreement as
agreed to by all signatories thereto and (ii) reaffirms that it will
not institute against the Designee or join any other Person in
instituting against the Designee any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under any federal or
state bankruptcy or similar law for one year and done day after the
payment in full of the latest maturing commercial paper note issued by
the Designee.
7. The Designating Bank unconditionally agrees to pay or
reimburse the Designee and save the Designee harmless against all
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or
mature whatsoever which may be imposed or asserted by any of the
parties to the Loan Documents against the Designee, in its capacity as
such, in any way relating to or arising out of this Agreement or any
other Loan Documents or any action taken or omitted by the Designee
hereunder or thereunder, provided that the Designating Bank shall not
be liable for any portion of such Liabilities, obligations, Losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements if the same results from the Designee's gross negligence
or willful misconduct.
8. Upon such acceptance and recording by the Administrative
Agent, as of the Effective Date, the Designee shall be a party to the
Credit Agreement with a right to
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<PAGE> 129
make Money Market Loans as a Designated Bank pursuant to Section
2.03(h) of the Credit Agreement and the rights and obligations of a
Designated Bank related thereto; provided, however, that the Designee
shall not be required to make payments with respect to such obligations
except to the extent of excess cash flow of the Designee which is not
otherwise required to repay obligations of the Designee Bank which is
not otherwise required to repay obligations of the Designee Bank which
re then due and payable. Notwithstanding the foregoing, the Designating
Bank shall be and remain obligated to the Borrower, the Administrative
Agent and the Banks for each and every of the obligations of the
Designee and the Designating Bank with respect to the Credit Agreement,
including, without limitation, any indemnification obligations under
Section 7.05 of the Credit Agreement and any sums otherwise payable to
the Borrower by the Designee.
9. This Designation Agreement shall be governed by and
construed in accordance with the laws of the State of [Georgia][New
York][other jurisdiction chosen by Designating Bank and Designated
Bank].
10. This Designation Agreement may be executed in any number
of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the
same agreement. Delivery of an executed counterpart of a signature page
to this Designation Agreement by facsimile transmission shall be
effective as delivery of a manually executed counterpart of this
Designation Agreement.
IN WITNESS WHEREOF, the Designating Bank and the Designee
intending to be legally bound, have caused this Designation Agreement to be
executed by their officers thereunto duly authorized as of the date first above
written.
[NAME OF DESIGNATING BANK]
as Designating Bank
By:
-----------------------------------------
Title:
[NAME OF DESIGNEE], as Designee
By:
-----------------------------------------
Title:
Lending Office (and address for notices):
--------------------------------------------
--------------------------------------------
--------------------------------------------
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<PAGE> 130
Acknowledged this ____ day Acknowledged this ____ day
of ______________ ____, ____ of ______________ __, ____
(the Effective Date)
WACHOVIA BANK, NA IRT PROPERTY COMPANY(1)
As the Administrative Agent as the Borrower
By: By:
------------------------------ ----------------------------
Title Title:
- ---------
(1) Change to IRT Partners L.P. after satisfaction of all Top Level
Reorganization Conditions.
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<PAGE> 131
EXHIBIT L
BORROWING BASE CERTIFICATE
Reference is made to the Credit Agreement dated as of November
1, 1999 (as modified and supplemented and in effect from time to time, the
"Credit Agreement") among IRT Property Company(1), Wachovia Bank, N.A., as
Administrative Agent and First Union National Bank, as Syndication Agent.
Capitalized terms used herein shall have the meanings ascribed thereto in the
Credit Agreement.
Pursuant to Section [3.01(h)][5.01(k)] of the Credit
Agreement, ______________, the duly authorized __________________ of the
Borrower, hereby certifies to the Administrative Agent and the Banks that the
calculation of the Borrowing Base contained in this Borrowing Base Certificate
is true, accurate and complete in all material respects as of __________, ______
and that, as to the Non-Wholly Owned Eligible Property, the Borrower and/or the
Guarantors control the operation and management of, and have the controlling
interest in, such Property, which is [75%], as of the dated hereof.
The calculation of the Borrowing Base is as follows:
<TABLE>
<S> <C> <C>
(a) Net Operating Income(2) for the 3 month period ending on
the last day of the Fiscal Quarter just ended prior to
the date of determination, from each Eligible
Unencumbered Stabilized Property(3) $
----------
(b) (a) divided by 0.0975 $
----------
(c) 4 times (b) $
----------
(d) 0.60 times (c) $
----------
(e) book value of Construction in Progress on all Eligible Properties $
----------
(f) 0.50 times (e) $
----------
(g) lesser of (f) and $20,000,000 $
----------
(h) acquisition cost of Eligible Unencumbered Stabilized
Property not owned for the entire 3 month period $
----------
</TABLE>
- ----------
(1) Change to IRT Partner L.P. after satisfaction of all Top Level
Reorganization Conditions.
(2) For the Non-Wholly Owned Eligible Property, include only the Non-Wholly
Owned Eligible Property Percentage thereof.
(3) Exclude percentage rents received during such 3 month period, but include an
amortized value for percentage rents received during the current Fiscal Year.
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<PAGE> 132
<TABLE>
<S> <C>
(i) 0.60 times (h) $
----------
BORROWING BASE: sum of (d), plus (g), plus (i) $
----------
</TABLE>
IRT PROPERTY COMPANY(1)
By:
------------------------------
[CHAIRMAN] [VICE CHAIRMAN]
[PRESIDENT] [TREASURER]
- ------------
(1) Change to IRT Partners L.P. after satisfaction of all Top Level
Reorganization Conditions.
127
<PAGE> 133
EXHIBIT M
LIST OF ELIGIBLE PROPERTIES
<TABLE>
<CAPTION>
Property City State
- --------------------------------------- ----------------- -----
<S> <C> <C>
Abbeville Plaza Abbeville SC
Alafaya Commons Orlando FL
Ambassador Row Lafayette LA
Ambassador Row Courtyard Lafayette LA
Asheville Plaza Asheville NC
Bay Pointe Plaza St. Petersburg FL
Bluebonnet Village Baton Rouge LA
The Boulevard Lafayette LA
Carolina Place Hartsville SC
Centre Pointe Plaza Smithfield NC
Chadwick Square Hendersonville NC
Charlotte Square Port Charlotte FL
Chastain Square Atlanta GA
Chelsea Place New Port FL
Richey
Chester Plaza Chester SC
Chestnut Square Brevard NC
Colony Square Fitzgerald GA
Commerce Crossing Commerce GA
Country Club Plaza Slidell LA
Countryside Shops Cooper City FL
The Crossing Slidell LA
Daniel Village Augusta GA
Delchamps Plaza Pascagoula MS
Douglas Commons Douglasville GA
Eden Centre Eden NC
Elmwood Oaks Harahan LA
Fairview Oaks Ellenwood GA
Forest Hills Centre Wilson NC
Forrest Gallery Tullahoma TN
Ft. Walton Beach Plaza Ft. Walton FL
Beach
The Galleria Wrightsville NC
Beach
</TABLE>
128
<PAGE> 134
<TABLE>
<CAPTION>
Property City State
- --------------------------------------- ----------------- -----
<S> <C> <C>
Grassland Crossing Alpharetta GA
Greenwood Shopping Center Palm Springs FL
Gulf Gate Plaza Naples FL
Harris Teeter Lexington VA
Heritage Walk Milledgeville GA
Hoffner Plaza Orlando FL
Lancaster Plaza Lancaster SC
Lancaster Shopping Center Lancaster SC
Lawrence Commons Lawrenceburg TN
Mableton Crossing Mableton GA
Macland Pointe Marietta GA
Madison Centre Huntsville AL
Market Place Shopping Center Norcross GA
McAlpin Square Savannah GA
Millervillage Shopping Center Baton Rouge LA
New Smyrna Beach Regional New Smyrna FL
Beach
North River Village Ellenton FL
North Village Center N. Myrtle SC
Beach
Old Kings Commons Palm Coast FL
Palm Gardens Largo FL
Parkmore Plaza Milton FL
Paulding Commons Dallas GA
Pensacola Plaza Pensacola FL
Pinhook Plaza Lafayette LA
Plaza Acadienne Eunice LA
Plaza North Hendersonville NC
Powers Ferry Marietta GA
Providence Square Charlotte NC
Riverside Square Coral Springs FL
Riverview Durham NC
Salisbury Marketplace Salisbury NC
Scottsville Square Bowling KY
Green
Seven Hills Spring Hill FL
Shelby Plaza Shelby NC
Sherwood South Baton Rouge LA
Shoppes of Lago Mar Miami FL
Shoppes of Silverlakes I Pembroke FL
Pines
Shoppes of Silverlakes II Pembroke FL
Pines
Siegen Village Baton Rouge LA
Smyrna Village Smyrna TN
</TABLE>
129
<PAGE> 135
<TABLE>
<CAPTION>
Property City State
- --------------------------------------- ----------------- -----
<S> <C> <C>
Smyth Valley Crossing Marion VA
South Beach Regional Jacksonville FL
Beach
Spalding Village Griffin GA
Spring Valley Commons Columbia SC
Stadium Plaza Phenix City AL
Stanley Market Place Stanley NC
Tamarac Town Square Tamarac FL
Tarpon Heights Galliano LA
Thomasville Commons Thomasville NC
Town & Country Kissimmee FL
Treasure Coast Vero Beach FL
Venice Plaza Venice FL
Village at Northshore Slidell LA
Walton Plaza Augusta GA
Waterlick Plaza Lynchburg VA
Watson Central Warner Robins GA
Wesley Chapel Crossing Decatur GA
West Gate Plaza Mobile AL
West Towne Square Rome GA
Westgate Square Sunrise FL
Williamsburg at Dunwoody Dunwoody GA
Willowdaile Durham NC
Industrial Buildings (4101 S. I-85) Charlotte NC
Miramar Land Miramar FL
Regency Square Port Richey FL
Lawrence County Sybene OH
Grand Marche LaFayette LA
Old Phoenix National Bank Medina OH
County
Wal-Mart Stores, Inc.-Matthews Mathews LA
Wal-Mart Stores, Inc.-Marble Falls Marble Falls TX
</TABLE>
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<PAGE> 136
EXHIBIT N
FORM OF GUARANTY AGREEMENT
THIS GUARANTY (this "Guaranty") is made as of November 1,
1999, by IRT Capital Corporation II, a Georgia corporation, IRT PARTNERS L.P., a
Georgia limited partnership, IRT MANAGEMENT COMPANY, a Georgia corporation and
IRT ALABAMA, INC., an Alabama corporation (each individually a "Guarantor," and
collectively, the "Guarantors," which terms shall include (x) any subsidiary of
IRT Property Company or, after the Top Level Reorganization, of IRT Property
Company as the Parent) which becomes a Guarantor pursuant to Paragraph 25 hereof
and Section 5.27 of the Credit Agreement referred to below and (y) after the Top
Level Reorganization, the Parent pursuant to Paragraph 25 hereof and Section
5.28 of the Credit Agreement) in favor of the Administrative Agent, for the
ratable benefit of the Banks, under the Credit Agreement referred to below;
W I T N E S S E T H :
WHEREAS, IRT Property Company, a Georgia corporation (the
"Borrower") and WACHOVIA BANK, N.A., as Administrative Agent (the
"Administrative Agent"), First Union National Bank, as Syndication Agent, and
certain other Banks from time to time party thereto have entered into a certain
Credit Agreement dated as of November 1, 1999 (as it may be amended or modified
further from time to time, the "Credit Agreement"), providing, subject to the
terms and conditions thereof, for extensions of credit to be made by the Banks
to the Borrower for the benefit of the Guarantors;
WHEREAS, it is required by Section 3.01(b) of the Credit
Agreement, that the Guarantors execute and deliver this Guaranty whereby the
Guarantors shall guarantee the payment when due of all principal, interest and
other amounts that shall be at any time payable by the Borrower under the Credit
Agreement, the Notes and the other Loan Documents (as they may be amended,
modified or extended from time to time, the "Guaranteed Agreements"); and
WHEREAS, in consideration of the financial and other support
that the Borrower has provided and (after the Top Level Reorganization, the
Parent will provide), and such financial and other support as the Borrower and
the Parent may in the future provide, to Guarantors, as well, as to the Parent,
the benefits which it receives from the financial accommodations which the
Borrower has received and will receive pursuant to the Credit Agreement, whether
directly or indirectly, and in order to induce the Banks and the Administrative
Agent to enter into the Credit Agreement, the Guarantors are willing to
guarantee the payment and performance of all obligations under the Guaranteed
Agreements, including all principal, interest, fees, costs, and compensation and
indemnification amounts (collectively, the "Obligations"); and
WHEREAS, capitalized terms used herein and not otherwise
defined shall be used as defined in the Credit Agreement;
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<PAGE> 137
NOW, THEREFORE, in consideration of the above premises, Ten
Dollars ($10.00) in hand paid and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Guarantors hereby
unconditionally and jointly and severally guarantees to the Banks and the
Administrative Agent full and prompt payment and performance when due whether at
maturity, by acceleration or otherwise, of all Obligations. Each of the
Obligations shall rank pari passu with each other Obligation. Upon failure by
the Borrower to pay punctually any such amount, each of the Guarantors agrees
that it shall forthwith on demand pay the amount not so paid at the place and in
the manner specified in the Credit Agreement, the relevant Note or the relevant
Loan Document, as the case may be.
The Guarantors and (pursuant to Section 9.20 of the Credit
Agreement) the Banks and the Administrative Agent hereby further agree that:
1. Representations and Warranties. The Guarantors incorporate herein by
reference as fully as if set forth herein all of the representations and
warranties pertaining to a Subsidiary contained in Article IV of the Credit
Agreement (which representations and warranties shall be deemed to have been
renewed by the Guarantors upon each Borrowing under the Credit Agreement.
2. Covenants. The Guarantors covenant that, so long as any Bank has any
Commitment outstanding under the Credit Agreement or any amount payable under
the Credit Agreement or any Note shall remain unpaid, that the Guarantors will
(i) fully comply with those covenants applicable to the Subsidiaries or
Guarantors set forth in Article V.
3. Obligations Several. Regardless of whether any other Guarantor,
proposed guarantor or any other Person or Persons is, are or shall become in any
other way responsible to the Banks and the Administrative Agent, or any of them,
for or in respect of the Obligations or any part thereof, and regardless of
whether or not any Person or Persons now or hereafter responsible to the Banks
and the Administrative Agent, or any of them, for the Obligations or any part
thereof, whether under this Guaranty or otherwise, shall cease to be so liable,
each Guarantor hereby declares and agrees that this Guaranty is and shall
continue to be a several obligation (as well as a joint one), shall be a
continuing guaranty and shall be operative and binding. Each Guarantor hereby
agrees that it will not exercise any rights which it may acquire by way of
subrogation under this Guaranty, by any payment made hereunder or otherwise,
unless and until all of the Obligations shall have been paid in full. If any
amount shall be paid to any Guarantor on account of such subrogation rights at
any time when all of the Obligations shall not have been paid in full, such
amount shall be held in trust for the benefit of the Administrative Agent and
the Banks and shall forthwith be paid to the Administrative Agent to be credited
and applied upon the Obligations, whether matured or unmatured, in accordance
with the terms of the Credit Agreement, but subject to the provisions of
Paragraph 10 hereof.
4. Guaranty Final. Upon the execution and delivery of this Guaranty to
the Administrative Agent, this Guaranty shall be deemed to be finally executed
and delivered by each Guarantor and shall not be subject to or affected by any
promise or condition affecting or limiting such Guarantor's liability, and no
statement, representation, agreement or promise on the part or the Banks, the
Administrative Agent, the Borrower, or any of them, or any officer,
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<PAGE> 138
employee or agent thereof, unless contained herein forms any part of this
Guaranty or has induced the making hereof or shall be deemed in any way to
affect such Guarantor's liability hereunder. The Guarantors' obligations
hereunder shall remain in full force and effect until all Obligations shall have
been paid in full and the Commitments under the Credit Agreement shall have
terminated or expired.
5. Amendment and Waiver. No alteration or waiver of this Guaranty or of
any of its terms, provisions or conditions shall be binding upon the parties
against whom enforcement is sought unless made in writing and signed by an
authorized officer of such party.
6. Dealings with Borrower. The Banks and the Administrative Agent, or
any of them, may, from time to time, without exonerating or releasing any
Guarantor in any way under this Guaranty, (i) take such further or other
security or securities for the Obligations or any part thereof as the Banks and
the Administrative Agent, or any of them, may deem proper, consistent with the
Credit Agreement, or (ii) release, discharge, abandon or otherwise deal with or
fail to deal with any Guarantor or other guarantor or obligor of the Obligations
or any security or securities therefor or any part thereof now or hereafter held
by the Banks and the Administrative Agent, or any of them, or (iii) consistent
with the Credit Agreement, amend, modify, extend, accelerate or waive in any
manner any of the provisions, terms, or conditions of the Guaranteed Agreements,
all as the Banks and the Administrative Agent, or any of them, may consider
expedient or appropriate in their sole discretion. Without timing the generality
of the foregoing, or of Paragraph 7 hereof, it is understood that the Banks and
the Administrative Agent, or any of them, may, without exonerating or releasing
any Guarantor, give up, or modify or abstain from perfecting or taking advantage
of any security for the Obligations and accept or make any compositions or
arrangements, and realize upon any security for the Obligations when, and in
such manner, as the Banks and the Administrative Agent, or any of them, may deem
expedient, consistent with the Credit Agreement, all without notice to any
Guarantor.
7. Guaranty Unconditional. Each Guarantor acknowledges and agrees that
no change in the nature or terms of the Obligations or any of the Guaranteed
Agreements, or other agreements, instruments or contracts evidencing, related to
or attendant with the Obligations (including any novation), nor any
determination of lack of enforceability thereof, shall discharge all or any part
of the liabilities and obligations of such Guarantor pursuant to this Guaranty;
it being the purpose and intent of the Guarantors, the Banks and the
Administrative Agent that the covenants, agreements and all liabilities and
obligations of the Guarantors hereunder are absolute, unconditional and
irrevocable under any and all circumstances. Without limiting the generality of
the foregoing, each Guarantor agrees that until each and every one of the
covenants and agreements of this Guaranty is fully performed, such Guarantor's
undertakings hereunder shall not be released, in whole or in part, by any action
or thing which might, but for this paragraph of this Guaranty, be deemed a legal
or equitable discharge of a Guarantor or surety or guarantor, or by reason of
any waiver, omission of the Banks and the Administrative Agent, or any of them,
or their failure to proceed promptly or otherwise, or by reason of any action
taken or omitted by the Banks and the Administrative Agent, or any of them,
whether or not such action or failure to act varies or increases the risk of, or
affects the rights or remedies of, such Guarantor or by reason of any further
dealings between the Borrower, the Banks, and the Administrative Agent, or any
of them, or any other Guarantor or guarantor or surety, and each Guarantor
hereby expressly waives and surrenders any defense to its liability hereunder,
or any right of counterclaim or offset of any
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nature or description which it may have or which may exist based upon, and shall
be deemed to have consented to, any of the foregoing acts, omissions, things,
agreements or waivers.
8. Set-off. The Banks and the Administrative Agent, or any of them,
may, without demand or otherwise of any kind upon or to any Guarantor, at any
time or from time to time when any amount shall be due and payable hereunder by
the Guarantors, if the Borrower shall not have timely paid its Obligations, set
off and appropriate and apply any and all deposits (general or special, time or
demand, including, bot 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 the Credit
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 the
Credit Agreement, the Notes or any other Loan Document, irrespective of whether
or not (a) the Banks or the holders of the Notes shall have made any demand
hereunder or (b) the Administrative Agent or the Banks shall have declared the
principal of and interest on the Loans, Notes and other amounts due under the
Credit Agreement to be due and payable and although said Obligations and
liabilities, or any them, shall be contingent or unmatured. Upon direction by
the Administrative Agent, with the consent of the Required Banks, after the
Termination Date (whether by reason of acceleration or otherwise), each Bank and
the Administrative Agent holding deposits of any Guarantor shall exercise its
set-off rights as so delivered.
9. Bankruptcy. Each Guarantor agrees that upon the bankruptcy or
winding up or other distribution of assets of the Borrower or any Subsidiary of
the Borrower (other than such Guarantor) or of any other Guarantor or surety or
guarantor for the Obligations, the rights of the Banks and the Administrative
Agent, or any of them, against such Guarantor shall not be affected or impaired
by the omission of the Banks and the Administrative Agent, or any of them, to
prove its or their claim, as appropriate, or to prove its or their claim, as
appropriate, or to prove its or their full claim, as appropriate, and the Banks
and the Administrative Agent may prove such claims as they see fit and may
refrain from proving any claim and in their respective discretion they may value
as they see fit or refrain from valuing any security held by the Banks and the
Administrative Agent, or any of them, without in any way releasing, reducing or
otherwise affecting the liability to the Banks, and the Administrative Agent of
such Guarantor. If acceleration of the time for payment of any amount payable by
the Borrower under the Credit Agreement, any Note or any other Loan Document is
stayed upon the insolvency, bankruptcy or reorganization of the Borrower, all
such amounts otherwise subject to acceleration under the terms of the Credit
Agreement, any Note or any other Loan Document shall nonetheless be payable by
each Guarantor hereunder forthwith on demand by the Administrative Agent made at
the request of the Required Banks. If at any time any payment of the principal
of or interest on any Note or any other amount payable by the Borrower under the
Credit Agreement or any other Loan Document is rescinded or must be otherwise
restored or returned upon the insolvency, bankruptcy or reorganization of the
Borrower, any other Guarantor or otherwise, the Guarantors' obligations
hereunder with respect to such payment shall be reinstated as though such
payment had been due but not made at such time.
10. Application of Payments. The Banks and the Administrative Agent,
pursuant to Section 9.20 of the Credit Agreement, acknowledge and agree that to
the extent the Credit
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Agreement and any of the Existing Senior Obligations (as defined below) are then
in default, any funds, payments, claims or distributions (the "Guaranty
Proceeds") actually received hereunder shall be made available for distribution
equally and ratably (based on the principal amounts then outstanding) among (a)
the holders of the Obligations and (b) the holders of the Existing Senior
Obligations. For purposes hereof, "Existing Senior Obligations" shall mean
indebtedness for money borrowed, owed or guaranteed in connection with any
public, unsecured and non-subordinated indebtedness for money borrowed of the
Borrower issued in offerings registered under the Securities Act of 1933 or in
placements exempt from registration pursuant to Rule 144A or Regulations
thereunder or otherwise, which is outstanding on the Closing Date. This
Paragraph 10 shall not apply to any payments, funds, claims or distributions
received by the Administrative Agent or the Banks directly or indirectly from
the Borrower or any other Person other than from any of the Guarantors
hereunder. Each Guarantor acknowledges and agrees with the Administrative Agent
and the Banks as follows:
(a) To the extent any Guaranty Proceeds are distributed to the
holders of the Existing Senior Obligations, the Obligations shall not be deemed
reduced by any such distribution, and the Guarantors will continue to make
payments pursuant to this Guaranty until such time as the Obligations have been
paid in full after taking into effect any distributions of Guaranty Proceeds to
the holders of Existing Senior Obligations;
(b) Nothing contained herein shall be deemed to limit, modify
or alter the rights of the Administrative Agent or any of the Banks or be deemed
to subordinate the Obligations to the Existing Senior Obligations, nor give to
any holder of Existing Senior Obligations any rights or subrogation;
(c) Nothing contained herein shall be deemed for the benefit
of any holders of Existing Senior Obligations nor shall anything be construed to
impose on the Administrative Agent or any of the Banks any fiduciary duties,
obligations or responsibilities to the holders of the Existing Senior
Obligations; and
(d) This Guaranty is for the sole benefit of the
Administrative Agent and the Banks and their respective successors and assigns,
and any amounts received by the Banks and the Administrative Agent, or any of
them, from whatsoever source and applied toward the payment of the Obligations
shall be supplied in such order of application as is set forth in the Credit
Agreement.
11. Waivers by Guarantor. Each Guarantor hereby expressly waives: (a)
notice of acceptance of this Guaranty, (b) notice of the existence or creation
of all or any of the Obligations, (c) presentment, demand, notice of dishonor,
protest, and all other notices whatsoever, (d) all diligence in collection or
protection of or realization upon the Obligations or any part thereof, any
obligation hereunder, or any security for any of the foregoing and (e) all
rights of subrogation, indemnification, contribution and reimbursement against
the Borrower, all rights to enforce any remedy the Banks and the Administrative
Agent, or any of them, may have against the Borrower and any benefit of, or
right to participate in, any collateral or security now or hereinafter held by
the Banks and the Administrative Agent, or any of them, in respect of the
Obligations, even upon payment in full of the Obligations. Any money received by
any Guarantor in violation of this Paragraph shall be held in trust by such
Guarantor for the benefit of
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the Banks and the Administrative Agent. If a claim is ever made upon the Banks
and the Administrative Agent, or any of them, for the repayment or recovery of
any amount or amounts received by any of them in payment of any of the
Obligations and such Person repays all or part of such amount by reason of (a)
any judgment, decree, or order of any court or administrative body having
jurisdiction over such Person or any of its property, or (b) any good faith
settlement or compromise of any such claim effected by such Person with any such
claimant, including the Borrower, then in such event such Guarantor agrees that
any such judgment, decree, order, settlement, or compromise shall be binding
upon such Guarantor, notwithstanding any revocation hereof or the cancellation
of any promissory note or other instrument evidencing any of the Obligations,
and such Guarantor shall be and remain obligated to such Person hereunder for
the amount so repaid or recovered to the same extent as if such amount had never
originally been received by such Person.
12. Assignment by the Banks or the Administrative Agent. To the extent
permitted under the Credit Agreement, the Banks and the Administrative Agent may
each, and without notice of any kind, sell, assign or transfer all or any of the
Obligations, and in such event each and every immediate and successive assignee,
transferee, or holder of all or any of the Obligations, shall have the right to
enforce this Guaranty, by suit or otherwise, for the benefit of such assignee,
transferee or holder as fully as if such assignee, transferee or holder were
herein by name specifically given such rights, powers and benefits.
13. Remedies Cumulative. No delay by the Banks and the Administrative
Agent, or any of them, in the exercise of any right or remedy shall operate as a
waiver thereof, and no single or partial exercise by the Banks and the
Administrative Agent, or any of them of any right or remedy shall preclude other
or further exercise thereof or the exercise of any other right or remedy. No
action by the Banks and the Administrative Agent, or any of them, permitted
hereunder shall in any way impair or affect this Guaranty. For the purpose of
this Guaranty, the Obligations shall include, without limitation, all
Obligations of the Borrower to the Banks and the Administrative Agent
notwithstanding any right or power of any third party, individually or in the
name of the Borrower or any other Person, to assert any claim or defense as to
the invalidity or unenforceability of any such Obligation, and no such claim or
defense shall impair or affect the obligations of any Guarantor hereunder.
14. Successors and Assigns. This Guaranty shall be binding upon the
Guarantor, its successors and assigns and inure to the benefit of the successors
and assigns of the Banks and the Administrative Agent. Each Guarantor agrees
that it shall not assign its rights or obligations under this Guaranty without
the consent of the Administrative Agent and all the Banks, nor shall such
Guarantor amend this Guaranty, without the consent of the Administrative Agent
and the Required Banks.
15. Miscellaneous. This is a Guaranty of payment and not of collection.
In the event of a demand upon any Guarantor under this Guaranty, such Guarantor
shall be held and bound to the Banks and the Administrative Agent directly as
debtor in respect of the payment of the amounts hereby guaranteed. All
reasonable costs and expenses, including attorneys' fees and expenses, incurred
by the Banks and the Administrative Agent, or any of them, in obtaining
performance of or collecting payments due under this Guaranty shall be deemed
part of the Obligations guaranteed hereby. Any notice or demand which the Banks
and the Administrative Agent, or
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any of them, may wish to give shall be served upon the Guarantors in the fashion
prescribed for notices in Section 9.01 of the Credit Agreement in care of the
Borrower at the address for the Borrower set forth in or otherwise provided
pursuant to Section 9.01 of the Credit Agreement, and the notice so sent shall
be deemed to be served as set forth in Section 9.01 of the Credit Agreement. The
provisions of this Guaranty are for the benefit of the Administrative Agent and
the Banks and may not be relied upon or enforced by any other Person without the
express written consent of the Banks and the Administrative Agent.
16. Loans Benefit Guarantors. Each Guarantor expressly represents and
acknowledges that any financial accommodations by the Banks and the
Administrative Agent, or any of them, to the Borrower, including without
limitation the extension of the Loans, are and will be of direct interest,
benefit and advantage to such Guarantor.
17. Solvency. Each Guarantor expressly represents and warrants that as
of the date hereof and after giving effect to the transactions contemplated by
the Loan Documents (including the Contribution Agreement) (i) the capital of
such Guarantor will not be unreasonably small to conduct its business; (ii) such
Guarantor will not have incurred debts, or have intended to incur debts, beyond
its ability to pay such debts as they mature; and (iii) the present fair salable
value of the assets of such Guarantor is greater than the amount that will be
required to pay its probable liabilities (including debts) as they become
absolute and matured. For purposes of this Paragraph 17, "debt" means any
liability on a claim, and "claim" means (a) the right to payment, whether or not
such right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, undisputed, legal, equitable, secured or unsecured, or (b)
the right to an equitable remedy for breach of performance if such breach gives
rise to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured, unmatured, undisputed secured
or unsecured.
18. Visits and Inspections. Each Guarantor covenants and agrees that so
long as any amount is owing on account of Obligations or otherwise pursuant to
this Guaranty, such Guarantor shall permit representatives of the Banks and the
Administrative Agent, or any of them, to visit and inspect properties of such
Guarantor during normal business hours after reasonable notice, inspect such
Guarantor's books and records and discuss with the principal officers of such
Guarantor its businesses, assets, liabilities, financial positions, results of
operations and business prospects.
19. Governing Law. This Guaranty shall be construed in accordance with
and governed by the internal laws of the State of Georgia applicable to
contracts made and to be performed in the State of Georgia.
20. Jurisdiction and Venue. If any action or proceeding shall be
brought by the Administrative Agent in order to enforce any right or remedy
under this Guaranty, each Guarantor hereby consents to the jurisdiction of any
state or federal court of competent jurisdiction sitting within the area
comprising the Northern District of Georgia on the date of this Guaranty. Each
Guarantor hereby agrees that service of the summons and complaint and all other
process which may be served in any such suit, action or proceeding may be
effected by mailing or transmitting by telecopier a copy of such process to the
offices of the Borrower, as set forth in or otherwise provided pursuant to
Section 9.01 of the Credit Agreement, and that
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personal service of process shall not be required. Nothing herein shall be
construed to prohibit service of process by any other method permitted by law,
or the bringing of any suit, action or proceeding in any other jurisdiction.
Each Guarantor agrees that final judgment in such suit, action or proceeding
shall be conclusive and may be enforced in any other jurisdiction by suit on the
judgment or in any other manner provided by applicable law.
21. Waiver of Jury Trial. Each Guarantor waives, to the fullest extent
permitted by law, any right to a trial by jury in any proceeding arising out of
this Guaranty.
22. Time of the Essence. Time is of the essence with regard to the
Guarantor's performance of its obligations hereunder.
23. Administrative Agent. Each reference herein to any right granted
to, benefit conferred upon or power exercisable by the "Administrative Agent"
shall be a reference to the Administrative Agent for the benefit of itself and
all the Banks, and each action taken or right exercised hereunder shall be
deemed to have been so taken or exercised by the Administrative Agent for the
benefit of and on behalf of itself and all the Banks.
24. Taxes. All payments required to be made by the Guarantors hereunder
shall be made without setoff or counterclaim and free and clear of and without
deduction or withholding for or on account of, any present or future taxes,
levies, imposts, duties or other charges of whatsoever nature imposed by any
government or any political or taxing authority as required pursuant to Section
2.13(c) of the Credit Agreement.
25. Additional Guarantors; Release of Guarantors. Section 5.27 of the
Credit Agreement provides that Significant Subsidiaries must become Guarantors
by, among other things, executing and delivering to the Administrative Agent a
counterpart of this Guaranty. Any Subsidiary which executes and delivers to the
Administrative Agent a counterpart of this Guaranty shall be a Guarantor for all
purposes hereunder. In addition, in the event of a Top Level Reorganization, the
Parent must become a Guarantor (and IRT Partners L.P. shall be released as a
Guarantor and shall become the Borrower under the Credit Agreement), in order to
satisfy the Top Level Reorganization Conditions. Under certain circumstances
described in the last sentence of Section 5.05 of the Credit Agreement,
Guarantors may obtain from the Administrative Agent a written release from this
Guaranty pursuant to the provisions of such sentence, and upon obtaining such
written release, any such Subsidiary shall no longer be a Guarantor hereunder.
Each other Guarantor consents and agrees to any such release and agrees that no
such release shall affect its obligations hereunder.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Guaranty to be executed
by their duly authorized officers as of the date first above written.
IRT CAPITAL CORPORATION II (SEAL)
By:
--------------------------------------------
Thomas H. McAuley
President
IRT PARTNERS L.P. (SEAL)
By: IRT Property Company, general partner
By:
--------------------------------------
James G. Levy
Senior Vice President
IRT MANAGEMENT COMPANY (SEAL)
By:
--------------------------------------------
James G. Levy
Treasurer
IRT ALABAMA, INC. (SEAL)
By:
--------------------------------------------
James G. Levy
Treasurer
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EXHIBIT O
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (this "Agreement") is entered into as of
November 1, 1999 by and between IRT PROPERTY COMPANY, a Georgia corporation (the
"Principal", which term shall include IRT Partners L.P., after the Top Level
Reorganization), IRT Capital Corporation II, a Georgia corporation, IRT PARTNERS
L.P., a Georgia limited partnership, IRT MANAGEMENT COMPANY, a Georgia
corporation, and IRT ALABAMA, INC., an Alabama corporation (collectively, the
"Guarantors" and, together with any subsidiary of the Principal or the Parent
which becomes a Guarantor pursuant to the last paragraph hereof, Paragraph 25 of
the Guaranty referred to below and Section 5.27 of the Credit Agreement referred
to below, and together with the Parent, from and after the Top Level
Reorganization pursuant to Section 5.28 of the Credit Agreement ). The Principal
and each of the Guarantors are sometimes hereinafter referred to individually as
a "Contributing Party" and collectively as the "Contributing Parties."
W I T N E S S E T H:
WHEREAS, pursuant to that certain Credit Agreement, dated as of even
date herewith, among the Principal, the Banks party thereto, Wachovia Bank,
N.A., as Administrative Agent and First Union National Bank, as Syndication
Agent, and certain other Banks from time to time party thereto (such agreement,
as the same may from time to time be amended, modified, restated or extended,
being hereinafter referred to as the "Credit Agreement"; capitalized terms used
herein shall have the meanings ascribed thereto in the Credit Agreement), the
Banks have agreed to extend financial accommodations to the Principal;
WHEREAS, as a condition, among others, to the willingness of the
Administrative Agent and the Banks to enter into the Credit Agreement, they have
required that the Guarantors and each Significant Subsidiary execute and deliver
that certain Guaranty, dated as of even date herewith (such agreement, as the
same may from time to time be amended, modified, restated or extended, being
hereinafter referred to as the "Guaranty"), pursuant to which, among other
things, the Guarantors have jointly and severally agreed to guarantee the
"Guaranteed Obligations" (as defined in the Guaranty); and
WHEREAS, each of the Guarantors will derive direct or indirect economic
benefit from the effectiveness and existence of the Credit Agreement;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, and to induce each Guarantor to enter into the Guaranty,
it is agreed as follows:
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To the extent that any Guarantor shall, under the Guaranty, make a
payment (a "Guarantor Payment") of a portion of the Guaranteed Obligations,
then, without limiting its rights of subrogation against the Principal, such
Guarantor shall be entitled to contribution and indemnification from, and be
reimbursed by, each of the other Contributing Parties in an amount, for each
such Contributing Party, equal to a fraction of such Guarantor Payment, the
numerator of which fraction is such Contributing Party's Allocable Amount and
the denominator of which is the sum of the Allocable Amounts of all of the
Contributing Parties.
As of any date of determination, the "Allocable Amount" of each
Contributing Party shall be equal to the maximum amount of liability which could
be asserted against such Contributing Party hereunder with respect to the
applicable Guarantor Payment without (i) rendering such Contributing Party
"insolvent" within the meaning of Section 101(31) of the Federal Bankruptcy Code
(the "Bankruptcy Code") or Section 2 of either the Uniform Fraudulent Transfer
Act (the "UFTA") or the Uniform Fraudulent Conveyance Act (the "UFCA"), (ii)
leaving such Contributing Party with unreasonably small capital, within the
meaning of Section 548 of the Bankruptcy Code or Section 4 of the UFTA or
Section 5 of the UFCA, or (iii) leaving such Contributing Party unable to pay
its debts as they become due within the meaning of Section 548 of the Bankruptcy
Code or Section 4 of the UFTA or Section 6 of the UFCA.
This Agreement is intended only to define the relative rights of the
Contributing Parties, and nothing set forth in this Agreement is intended to or
shall impair the obligations of the Guarantors, jointly and severally, to pay
any amounts, as and when the same shall become due and payable in accordance
with the terms of the Guaranty.
The parties hereto acknowledge that the rights of contribution and
indemnification hereunder shall constitute assets in favor of each Guarantor to
which such contribution and indemnification is owing.
This Agreement shall become effective upon its execution by each of the
Contributing Parties and shall continue in full force and effect and may not be
terminated or otherwise revoked by any Contributing Party until all of the
Guaranteed Obligations shall have been indefeasibly paid in full (in lawful
money of the United States of America) and discharged and the Credit Agreement
and financing arrangements evidenced and governed by the Credit Agreement shall
have been terminated. Each Contributing Party agrees that if, notwithstanding
the foregoing, such Contributing Party shall have any right under applicable law
to terminate or revoke this Agreement, and such Contributing Party shall attempt
to exercise such right, then such termination or revocation shall not be
effective until a written notice of such revocation or termination, specifically
referring hereto and signed by such Contributing Party, is actually received by
each of the other Contributing Parties and by the Administrative Agent at its
notice address set forth in the Credit Agreement. Such notice shall not affect
the right or power of any Contributing Party to enforce rights arising prior to
receipt of such written notice by each of the other Contributing Parties and the
Administrative Agent. If any Bank grants additional loans to the Principal or
takes other action giving rise to additional Guaranteed Obligations after any
Contributing Party has exercised any right to terminate or revoke this Agreement
but before the Administrative Agent receives such written notice, the rights of
each other Contributing Party to contribution and indemnification hereunder in
connection with any Guarantor Payments made
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with respect to such loans or Guaranteed Obligations shall be the same as if
such termination or revocation had not occurred.
Section 5.27 of the Credit Agreement provides that Significant
Subsidiaries must become Guarantors, and Subsidiaries which are not Significant
Subsidiaries may elect to become Guarantors, by, among other things, executing
and delivering to the Administrative Agent a counterpart of the Guaranty and of
this Contribution Agreement. Section 5.28 provides that, in the event of a Top
Level Reorganization, the Parent must become a Guarantor in order to satisfy the
Top Level Reorganization Conditions (and IRT Partners L.P. shall be released as
a Guarantor and shall become the Borrower under the Credit Agreement, but shall
remain a party hereto as the "Principal"). Any Subsidiary which executes and
delivers to the Administrative Agent a counterpart of the Guaranty and of this
Contribution Agreement shall be a Guarantor for all purposes hereunder. Under
certain circumstances described in the last sentence of Section 5.05 of the
Credit Agreement, Subsidiaries may obtain from the Administrative Agent a
written release from the Guaranty pursuant to the provisions of such sentence,
and upon obtaining such written release, any such Subsidiary shall no longer be
a Guarantor or Contributing Party hereunder, and such release shall
automatically and without further action constitute a release by each other
Contributing Party of all obligations of such Subsidiary hereunder. Each other
Guarantor consents and agrees to any such releases and agrees that no such
release shall affect its obligations hereunder, except as to the Subsidiary so
released.
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IN WITNESS WHEREOF, each Contributing Party has executed and delivered
this Agreement, under seal, as of the date first above written.
IRT PROPERTY COMPANY (SEAL)
By:
------------------------------------------
James G. Levy
Senior Vice President
IRT CAPITAL CORPORATION II (SEAL)
By:
------------------------------------------
Thomas H. McAuley
President
IRT PARTNERS L.P. (SEAL)
By: IRT Property Company, general partner
By: -------------------------------------
James G. Levy
Senior Vice President
IRT MANAGEMENT COMPANY (SEAL)
By: ----------------------------------------
James G. Levy
Treasurer
IRT ALABAMA, INC. (SEAL)
By: ----------------------------------------
James G. Levy
Treasurer
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EXHIBIT P
FORM OF FUNDING INDEMNIFICATION LETTER
[Date]
Wachovia Bank, N.A.
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attention: Cathy Casey
Telecopier number: 404-332-4066
Confirmation number: 404-332-5649
Re: Proposed credit facilities in the amount of
$100,000,000 (the "Proposed Credit Facilities") to be entered into
pursuant to Credit Agreement among IRT Property Company, the Banks
listed therein and Wachovia Bank, N.A., as Administrative Agent, in
substantially the form of the draft thereof dated November __, 1999
(the "Draft Credit Agreement"; capitalized terms which are used but not
defined herein have the meanings given them in the Draft Credit
Agreement)
Gentlemen:
It is anticipated that the Proposed Credit Facilities will
close on or about November 1, 1999 (the "Anticipated Closing Date"), and that
the Banks will be __________________________, _____________________,
__________________________ and Wachovia Bank, N.A. (collectively, the "Proposed
Banks"). Section 2.02 of the Proposed Credit Agreement requires that Notices of
Borrowing be given at least 3 Euro-Dollar Business Days before each Euro-Dollar
Borrowing and at least 3 Foreign Currency Business Days before each Foreign
Currency Borrowing. Borrowers would like to have the opportunity to obtain
Euro-Dollar Borrowings and Foreign Currency Borrowings on the Closing Date, but
could of course not comply with such notice provisions with respect thereto.
Parent hereby requests that the Administrative Agent and the
Proposed Banks, on a one-time basis only, waive the aforesaid notice provisions,
and permit Borrowers to obtain Euro-Dollar Borrowings and Foreign Currency
Borrowings on the Closing Date in such amounts and currencies, and for such
Interest Periods, as have been agreed to by Borrowers and the Administrative
Agent and notified to the Proposed Banks by November 1, 1999 (the "Agreed
Closing Date Fixed Rate Borrowings"), and in consideration thereof, and for
other good and valuable consideration, the receipt of which hereby is
acknowledged, to pay to and indemnify and hold harmless each of the Proposed
Banks with respect to such amount or amounts as shall compensate each Proposed
Bank for any loss, cost or expense incurred by such Proposed Bank as a result of
any failure of (i) such Proposed Bank to become a Bank under the Proposed Credit
Facilities, or (ii) the Proposed Credit Facilities to close, or (iii) Borrowers
to borrow any of the Agreed Closing Date Fixed Rate Borrowings on the
Anticipated Closing Date.
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This indemnification letter is executed and delivered to
Wachovia Bank, N.A. as proposed Administrative Agent under the Proposed Credit
Facilities, but for the benefit of each of the Proposed Banks, and each of the
Proposed Banks shall be entitled to rely on and directly enforce the terms and
provisions hereof.
This indemnification letter may be executed in any number of
counterparts and by different parties hereto in separate counterparts and
transmitted by facsimile to the other parties, each of which when so executed
and delivered by facsimile shall be deemed to be an original and all of which
counterparts, taken together, shall constitute but one and the same instrument.
Sincerely,
IRT PROPERTY COMPANY (SEAL)
By:
-------------------------------------
Title:
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
Attention:
------------------------------
Telecopier number:
----------------------
Confirmation number:
--------------------
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EXHIBIT Q
FORM OF JOINDER AGREEMENT
[Date]
Wachovia Bank, N.A.
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attention: Cathy Casey
Telecopier number: 404-332-4066
Confirmation number: 404-332-5649
Re: Credit Agreement dated as of November 1, 1999
among IRT Property Company, as the Borrower, the Banks listed on the
signature pages thereof , Wachovia Bank, N.A., as Administrative Agent
and First Union National Bank, as Syndication Agent (as the same may be
amended and modified from time to time, the "Credit Agreement"). Terms
defined in the Credit Agreement are used herein with the same meanings.
Gentlemen:
IRT Partners L.P., (the "Replacement Borrower") is accomplishing the Top
Level Reorganization, as described in Section 5.28 of the Credit Agreement. In
order to satisfy the Top Level Reorganization Conditions, set forth therein, the
Replacement Borrower must become the Borrower and, among other things, assume
all of the obligations of the Borrower pursuant to the Credit Agreement, the
Notes and the other Loan Documents (other than the Guaranty) and execute new
Notes.
_________ For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Replacement Borrower and the Administrative
Agent (by executing the acceptance at the end thereof, and on its own behalf and
on behalf of the Banks) hereby, effective upon consummation of the Top Level
Reorganization and satisfaction of the Top Level Reorganization Conditions,
agree that (i) the Replacement Borrower shall have all of the rights of the
Borrower, and hereby assumes and agrees to discharge all of the duties,
obligations, and covenants (and from and after such time makes the
representations and warranties) of the Borrower, under the Credit Agreement, the
Notes and the other Loan Documents (other than the Guaranty), as fully as if it
were the original Borrower thereunder and (ii) shall be the Borrower for all
purposes under the Credit Agreement, the Notes and the other Loan Documents
(other than the Guaranty). Contemporaneously herewith, the Replacement Borrower
is executing and delivering new Notes, as contemplated in Section 5.28 of the
Credit Agreement.
146
<PAGE> 152
IRT PARTNERS L.P. (SEAL)
By:
-------------------------------------
Title:
ACCEPTED AND AGREED TO:
WACHOVIA BANK, N.A., as Administrative Agent
By:
----------------------------
Title:
----------------------------------------
147
<PAGE> 153
SCHEDULE 4.08
SUBSIDIARIES
<TABLE>
<CAPTION>
ARTICLE X. NAME JURISDICTION OF OWNERSHIP
--------------- ---------
ORGANIZATION
---------------
<S> <C> <C>
IRT Management Company Georgia IRT Property Company owns 100% of the
equity interests
IRT Alabama, Inc. Alabama IRT Property Company owns 100% of the
equity interests
IRT Partners L.P. Georgia IRT Property Company owns a 1% general
partnership interest
IRT Management Company owns a 92% limited
partnership interest
Outside investors collectively own a 7%
limited partnership interest
VW Mall, Inc. Georgia IRT Property Company owns 100% of the
equity interests
IRT Capital Corporation II Georgia IRT Property Company owns 1% of the voting
common stock and 96% of the non-voting
common stock
Other investors own 99% of the voting
common stock and 4% of the non-voting
common stock
IRT Capital Corporation Georgia IRT Property Company owns 1% of the voting
common stock and 96% of the non-voting
common stock
Other investors own 99% of the voting
common stock and 4% of the non-voting
common stock
</TABLE>
148
<PAGE> 154
SCHEDULE 4.14
ENVIRONMENTAL MATTERS
The Borrower is disclosing the following for informational purposes but
does not believe any of the following could reasonably be expected to cause a
Material Adverse Effect:
1. Bay Pointe Cleaners
Bay Pointe Plaza - St. Petersburg, Florida
Per letter from the Florida Department of Environmental Protection
("FDEP"), this dry cleaning establishment is eligible, and has been
ranked, for state-funded remediation.
2. One Hour Martinizing
Bluebonnet Village - Baton Rouge, Louisiana
Louisiana Department of Environmental Quality ("LDEQ") is requiring
re-sampling of four (4) monitoring wells. Re-sampling scheduled for
10/01/99. The sampling conducted in 1995 showed that contamination
appeared to be isolated in the area directly behind the cleaners and
some remediation has been conducted.
3. Rub-A-Dub-Dub Dry Cleaners
Charlotte Square - Port Charlotte, Florida
Per letter dated 4/29/99 from the FDEP, a field investigation was
performed and the results showing contamination were forwarded to the
FDEP South District Hazardous Waste Program for review.
4. Mac's Dry Cleaners
Hoffner Plaza - Orlando, Florida
This former tenant was listed as being eligible for state-funded
cleanup per letter dated 6/16/97.
5. Kean's The Cleaners
Millervillage - Baton Rouge, Louisiana
This dry cleaner is listed as an RCRA small quantity hazardous waste
generator.
6. Gilbre Cleaners
Pinhook Plaza - Lafayette, Louisiana
This dry cleaner is listed as an RCRA small quantity hazardous waste
generator.
7. DryClean USA
Riverside Square - Coral Springs, Florida
FDEP given permission to enter the property to conduct soil and
groundwater sampling on 9/27/99.
149
<PAGE> 155
8. Kean's The Cleaners
Sherwood South - Baton Rouge, Louisiana
This dry cleaner is listed as an RCRA small quantity hazardous waste
generator.
9. 4101 I-85 South Industrial Property
Charlotte, North Carolina
Remediation related to historical operations in progress under North
Carolina oversight. The remediation is currently expected to be
completed by year-end 1999.
10. Kash `N Karry
Venice Plaza - Venice, Florida
This tenant formerly operated UST's on the property and has undertaken
and is responsible for all related corrective action.
150
<PAGE> 1
EXHIBIT 10.13
$5,000,000
REVOLVING LOAN CREDIT AGREEMENT
DATED AS OF
NOVEMBER 1, 1999
BETWEEN
IRT PROPERTY COMPANY
AND
WACHOVIA BANK, N.A.
<PAGE> 2
TABLE OF CONTENTS
CREDIT AGREEMENT
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
ARTICLE I. DEFINITIONS..........................................................................1
SECTION 1.01. DEFINITIONS..............................................................................1
SECTION 1.02. ACCOUNTING TERMS AND DETERMINATIONS.....................................................16
SECTION 1.03. REFERENCES..............................................................................17
SECTION 1.04. USE OF DEFINED TERMS....................................................................17
SECTION 1.05. TERMINOLOGY.............................................................................17
ARTICLE II. THE CREDITS........................................................................17
SECTION 2.01. COMMITMENTS TO LEND REVOLVING LOANS.....................................................17
SECTION 2.02. REVOLVING LOAN NOTE.....................................................................18
SECTION 2.03. MATURITY OF REVOLVING LOANS.............................................................18
SECTION 2.04. INTEREST RATES..........................................................................18
SECTION 2.05. FEES....................................................................................20
SECTION 2.06. OPTIONAL TERMINATION OR REDUCTION OF REVOLVING LOAN COMMITMENT..........................21
SECTION 2.07. MANDATORY REDUCTION AND TERMINATION OF REVOLVING LOAN COMMITMENT........................21
SECTION 2.08. PREPAYMENTS.............................................................................21
SECTION 2.09. GENERAL PROVISIONS AS TO PAYMENTS.......................................................22
SECTION 2.10. COMPUTATION OF INTEREST.................................................................22
ARTICLE III. CONDITIONS TO BORROWINGS..........................................................22
SECTION 3.01. CONDITIONS TO FIRST BORROWING...........................................................22
SECTION 3.02. CONDITIONS TO ALL BORROWINGS............................................................23
ARTICLE IV. REPRESENTATIONS AND WARRANTIES.....................................................24
SECTION 4.01. CORPORATE EXISTENCE AND POWER...........................................................24
SECTION 4.02. CORPORATE AND GOVERNMENTAL AUTHORIZATION; NO CONTRAVENTION..............................24
SECTION 4.03. BINDING EFFECT..........................................................................24
SECTION 4.04. FINANCIAL INFORMATION...................................................................25
SECTION 4.05. NO LITIGATION...........................................................................25
SECTION 4.06. COMPLIANCE WITH ERISA...................................................................25
SECTION 4.07. COMPLIANCE WITH LAWS; PAYMENT OF TAXES..................................................25
SECTION 4.08. SUBSIDIARIES............................................................................26
SECTION 4.09. INVESTMENT COMPANY ACT..................................................................26
SECTION 4.10. PUBLIC UTILITY HOLDING COMPANY ACT......................................................26
SECTION 4.11. OWNERSHIP OF PROPERTY; LIENS............................................................26
SECTION 4.12. NO DEFAULT..............................................................................26
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
SECTION 4.13. FULL DISCLOSURE.........................................................................27
SECTION 4.14. ENVIRONMENTAL MATTERS...................................................................27
SECTION 4.15. CAPITAL STOCK...........................................................................27
SECTION 4.16. MARGIN STOCK............................................................................28
SECTION 4.17. INSOLVENCY..............................................................................28
SECTION 4.18. INSURANCE...............................................................................28
SECTION 4.19. Y2K PLAN................................................................................28
SECTION 4.20. REAL ESTATE INVESTMENT TRUST............................................................29
ARTICLE V. COVENANTS...........................................................................29
SECTION 5.01. INFORMATION.............................................................................29
SECTION 5.02. INSPECTION OF PROPERTY, BOOKS AND RECORDS...............................................31
SECTION 5.03. MAINTENANCE OF EXISTENCE................................................................31
SECTION 5.04. DISSOLUTION.............................................................................31
SECTION 5.05. CONSOLIDATIONS, MERGERS AND SALES OF ASSETS.............................................32
SECTION 5.06. USE OF PROCEEDS.........................................................................32
SECTION 5.07. COMPLIANCE WITH LAWS; PAYMENT OF TAXES..................................................33
SECTION 5.08. INSURANCE...............................................................................33
SECTION 5.09. CHANGE IN FISCAL YEAR...................................................................33
SECTION 5.10. MAINTENANCE OF PROPERTY.................................................................33
SECTION 5.11. ENVIRONMENTAL NOTICES...................................................................33
SECTION 5.12. ENVIRONMENTAL MATTERS...................................................................34
SECTION 5.13. ENVIRONMENTAL RELEASE...................................................................34
SECTION 5.14. TRANSACTIONS WITH AFFILIATES............................................................34
SECTION 5.15. RESTRICTED PAYMENTS.....................................................................34
SECTION 5.16. INVESTMENTS.............................................................................34
SECTION 5.17. LIENS...................................................................................35
SECTION 5.18. RESTRICTIONS ON ABILITY OF SUBSIDIARIES TO PAY DIVIDENDS................................36
SECTION 5.19. ADDITIONAL DEBT.........................................................................36
SECTION 5.20. RATIO OF CONSOLIDATED TOTAL LIABILITIES TO CONSOLIDATED TOTAL ASSET VALUE...............36
SECTION 5.21. RATIO OF CONSOLIDATED TOTAL SECURED DEBT TO CONSOLIDATED TOTAL ASSET VALUE..............36
SECTION 5.22. RATIO OF CONSOLIDATED EBITDA TO CONSOLIDATED INTEREST EXPENSE...........................37
SECTION 5.23. RATIO OF CONSOLIDATED UNENCUMBERED REAL ESTATE ASSETS TO CONSOLIDATED UNSECURED
SENIOR DEBT.............................................................................37
SECTION 5.24. RATIO OF CONSOLIDATED UNENCUMBERED NET OPERATING INCOME TO CONSOLIDATED
UNSECURED INTEREST EXPENSE..............................................................37
SECTION 5.25. RATIO OF CONSOLIDATED EBITDA TO CONSOLIDATED FIXED CHARGES..............................37
SECTION 5.26. Y2K COMPLIANCE..........................................................................37
SECTION 5.27. SIGNIFICANT SUBSIDIARIES TO BE GUARANTORS; ELECTION TO BECOME GUARANTOR.................37
SECTION 5.28. TOP LEVEL REORGANIZATION................................................................38
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
ARTICLE VI. DEFAULTS...........................................................................39
SECTION 6.01. EVENTS OF DEFAULT.......................................................................39
ARTICLE VII. CHANGE IN CIRCUMSTANCES; COMPENSATION.............................................42
SECTION 7.01. BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR UNFAIR................................42
SECTION 7.02. ILLEGALITY..............................................................................42
SECTION 7.03. INCREASED COST AND REDUCED RETURN.......................................................43
SECTION 7.04. BASE RATE LOANS SUBSTITUTED FOR EURO-DOLLAR LOANS.......................................44
ARTICLE VIII. MISCELLANEOUS....................................................................44
SECTION 8.01. NOTICES.................................................................................44
SECTION 8.02. NO WAIVERS..............................................................................44
SECTION 8.03. EXPENSES; DOCUMENTARY TAXES.............................................................44
SECTION 8.04. INDEMNIFICATION.........................................................................45
SECTION 8.05. SETOFF; SHARING OF SETOFFS..............................................................45
SECTION 8.06. AMENDMENTS AND WAIVERS..................................................................46
SECTION 8.07. NO MARGIN STOCK COLLATERAL..............................................................46
SECTION 8.08. SUCCESSORS AND ASSIGNS..................................................................46
SECTION 8.09. CONFIDENTIALITY.........................................................................47
SECTION 8.10. REPRESENTATION BY BANK..................................................................48
SECTION 8.11. CONSEQUENTIAL DAMAGES...................................................................48
SECTION 8.12. GEORGIA LAW.............................................................................48
SECTION 8.13. SEVERABILITY............................................................................48
SECTION 8.14. INTEREST................................................................................48
SECTION 8.15. INTERPRETATION..........................................................................49
SECTION 8.16. WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION...........................................49
SECTION 8.17. COUNTERPARTS............................................................................50
SECTION 8.18. SOURCE OF FUNDS -- ERISA................................................................50
SECTION 8.19. APPROVAL OF GUARANTY PROVISIONS.........................................................50
ARTICLE IX. NAME..............................................................................106
</TABLE>
EXHIBIT A Form of Revolving Loan Note
EXHIBIT B Form of Opinion of Counsel for the Borrower and the Guarantors
EXHIBIT C Form of Opinion of Special Counsel for the Bank
EXHIBIT D Form of Compliance Certificate
EXHIBIT E Form of Closing Certificate
EXHIBIT F Form of Officer's Certificate
iii
<PAGE> 5
PAGE
EXHIBIT G Form of Guaranty
EXHIBIT H Form of Contribution Agreement
EXHIBIT I Form of Joinder Agreement (Re Top Level Reorganization)
EXHIBIT J Form of FMA Agreement
EXHIBIT K Form of Borrowing Base Certificate
Schedule 4.08 Subsidiaries
Schedule 4.14 Environmental Matters
iv
<PAGE> 6
REVOLVING LOAN CREDIT AGREEMENT
REVOLVING LOAN CREDIT AGREEMENT dated as of November 1, 1999
between IRT PROPERTY COMPANY, as the Borrower, and WACHOVIA BANK, N.A., as the
Bank.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS.
The terms as defined in this Section 1.01 shall, for all
purposes of this Agreement and any amendment hereto (except as herein otherwise
expressly provided or unless the context otherwise requires), have the meanings
set forth herein:
"Adjusted London Interbank Offered Rate" has the meaning set
forth in Section 2.07(c).
"Affiliate" of any relevant Person means (i) any Person that
directly, or indirectly through one or more intermediaries, controls the
relevant Person (a "Controlling Person"), (ii) any Person (other than the
relevant Person or a Subsidiary of the relevant Person) which is controlled by
or is under common control with a Controlling Person, or (iii) any Person (other
than a Subsidiary of the relevant Person) of which the relevant Person owns,
directly or indirectly, 20% or more of the common stock or equivalent equity
interests. As used herein, the term "control" means possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
"Agreement" means this Credit Agreement, together with all
amendments and supplements hereto.
"Applicable Margin" has the meaning set forth in Section
2.07(a).
"Authority" has the meaning set forth in Section 8.02.
"Bank" means Wachovia Bank, N.A., a national banking
association organized under the laws of the United States of America, and its
successors and permitted assigns.
<PAGE> 7
"Base Rate" means for any Base Rate Loan for any day, the rate
per annum equal to the higher as of such day of (i) the Prime Rate, or (ii)
one-half of one percent above the Federal Funds Rate. For purposes of
determining the Base Rate for any day, changes in the Prime Rate or the Federal
Funds Rate shall be effective on the date of each such change.
"Base Rate Borrowing" means a Borrowing consisting of Base
Rate Loans.
"Base Rate Loan" means a Revolving Loan which bears or is to
bear interest at a rate based upon the Base Rate, and is to be made as a Base
Rate Loan pursuant to Section 2.04(b) or Article VII, as applicable.
"Borrower" means (i) until the consummation of a Top Level
Reorganization and the satisfaction of the Top Level Reorganization Conditions,
IRT PROPERTY COMPANY, a Georgia corporation, and (ii) thereafter, IRT Partners
L.P., and in each case its successors and its permitted assigns.
"Borrower/Parent" means (i) until the consummation of a Top
Level Reorganization and the satisfaction of the Top Level Reorganization
Conditions, IRT Property Company, a Georgia corporation, as the Borrower
hereunder and (ii) thereafter, the Parent, and in each case its successors and
its permitted assigns.
"Borrowing" means a borrowing hereunder consisting of
Revolving Loans made to the Borrower pursuant to Article II. A Borrowing is a
"Base Rate Borrowing" if such Revolving Loans are Base Rate Loans. A Borrowing
is a Euro-Dollar Borrowing if such Revolving Loans are Euro-Dollar Loans.
"Borrowing Base" means the sum of each of the following, as
determined by reference to the most recent Borrowing Base Certificate furnished
pursuant to Section 5.01(k), (and with respect to any Eligible Property which
consists of phases, each phase thereof shall be separately categorized into
clause (i), (ii) or (iii) below, as appropriate, so long as such phase could be
separately financed on a stand-alone basis).
(i) an amount equal to the product of: (x) the quotient of
(1) the Net Operating Income (but for the Non-Wholly Owned Eligible
Property, include only the Non-Wholly Owned Eligible Property
Percentage thereof) for the 3 month period ending on the last day of
the Fiscal Quarter just ended prior to the date of determination, from
each Eligible Unencumbered Stabilized Property (excluding percentage
rents received during such 3 month period, but including an amortized
value for percentage rents received during the current Fiscal Year),
divided by (2) 0.0975 (which is the capitalization rate); times (y) 4
(which is the annualization factor); times (z) 0.60 (which is the
advance rate); plus
(ii) an amount equal to the lesser of: (A) the product of
(x) 0.50 (which is the advance rate), times (y) the book value of
Construction in Progress on the last day of the Fiscal Quarter just
ended on all Eligible Properties not subject to a Mortgage and (B)
$20,000,000; plus
2
<PAGE> 8
(iii) an amount equal to the product of (x) 0.60 (which is
the advance rate), times (y) the acquisition cost of all Eligible
Unencumbered Stabilized Property not owned for the entire 3 month
period ending on the last day of the Fiscal Quarter just ended prior to
the date of determination.
"Borrowing Base Certificate" means a certificate substantially
in the form of Exhibit L, duly executed by an Executive Officer of the Borrower,
setting forth in reasonable detail the calculations for each component of the
Borrowing Base.
"Capital Stock" means any nonredeemable capital stock of (i)
until the consummation of a Top Level Reorganization and the satisfaction of the
Top Level Reorganization Conditions, the Borrower/Parent or any Consolidated
Subsidiary (to the extent issued to a Person other than the Borrower/Parent),
whether common or preferred and (ii) thereafter, the Parent or any Consolidated
Subsidiary (to the extent issued to a Person other than the Parent), whether
common or preferred.
"CERCLA" means the Comprehensive Environmental Response
Compensation and Liability Act, 42 U.S.C. ss. 9601 et. seq. and its implementing
regulations and amendments.
"CERCLIS" means the Comprehensive Environmental Response
Compensation and Liability Inventory System established pursuant to CERCLA.
"Change of Law" shall have the meaning set forth in Section
8.02.
"Closing Certificate" has the meaning set forth in Section
3.01(e).
"Closing Date" means November 1, 1999.
"Code" means the Internal Revenue Code of 1986, as amended, or
any successor Federal tax code.
"Compliance Certificate" has the meaning set forth in Section
5.01(c).
"Consolidated Debt" means at any date the Debt of the
Borrower/Parent and each Consolidated Entity, determined on a consolidated basis
as of such date.
"Consolidated EBITDA" means at any time the sum of the
following, determined on a consolidated basis for the Borrower/Parent and each
Consolidated Entity, at the end of each Fiscal Quarter, for the applicable
measuring period: (i) Consolidated Net Income; plus (ii) Consolidated Interest
Expense; plus (iii) taxes on income; plus (iv) depreciation; plus (v)
amortization; plus (vi) other non-cash charges.
"Consolidated Entity" means at any date the Guarantors and any
other Person the accounts of which, in accordance with GAAP, are consolidated
with those of the Borrower/Parent in its consolidated financial statements as of
such date.
3
<PAGE> 9
"Consolidated Fixed Charges" means at any time the sum of the
following, determined on a consolidated basis for the Borrower/Parent and each
Consolidated Entity, at the end of each Fiscal Quarter, for the Fiscal Quarter
just ended: (i) Consolidated Interest Expense; plus (ii) all Dividends paid, or
declared but not yet paid, by the Borrower/Parent on preferred stock; plus (iii)
the aggregate amount of scheduled principal amortization paid, as reflected on
the Borrower/Parent's most recent quarterly financial statement submitted to the
Bank, but excluding any principal payments under this Agreement or any other
agreement pertaining to revolving Debt permitted under Section 5.19(iii), and
excluding any balloon, bullet or similar payments on other Debt and (iv)
payments on ground leases.
"Consolidated Intangible Assets" means, with respect to the
Borrower/Parent and its Consolidated Subsidiaries, determined on a consolidated
basis, all assets which would be treated as intangible assets for balance sheet
presentation purposes under GAAP, including without limitation goodwill (whether
representing the excess of cost over book value of assets acquired, or
otherwise), trademarks, tradenames, copyrights, patents and technologies, and
unamortized debt discount and expense.
"Consolidated Interest Expense" for any period means interest,
whether expensed or capitalized, in respect of Debt of the Borrower/Parent and
each Consolidated Entity outstanding during such period.
"Consolidated Net Income" means, for any period, the Net
Income of the Borrower/Parent and each Consolidated Entity determined on a
consolidated basis, but excluding (i) extraordinary items, (ii) gains and losses
on sales of assets, (iii) losses resulting from forgiveness by the
Borrower/Parent or any Consolidated Entity of Debt, (iv) expenses associated
with significant non-recurring events and (v) any equity interests of the
Borrower/Parent or any Subsidiary in the unremitted earnings of any Person that
is not a Subsidiary.
"Consolidated Operating Profits" means, for any period, the
Operating Profits of the Borrower/Parent and each Consolidated Entity.
"Consolidated Subsidiary" means at any date any Subsidiary or
other entity the accounts of which, in accordance with GAAP, would be
consolidated with those of the Borrower/Parent in its consolidated financial
statements as of such date.
"Consolidated Tangible Assets" means the sum of (i)
Consolidated Total Assets, less (ii) Consolidated Intangible Assets.
"Consolidated Total Assets" means, at any time, the total
assets of the Borrower/Parent and each Consolidated Entity, determined on a
consolidated basis, as set forth or reflected on the most recent consolidated
balance sheet of the Borrower/Parent and each Consolidated Entity, prepared in
accordance with GAAP.
"Consolidated Total Asset Value" means, on a consolidated
basis for the Borrower/Parent and each Consolidated Entity, the sum of:
4
<PAGE> 10
(i) an amount equal to the product of: (x) the quotient
of (1) the Net Operating Income for the 3 month period ending on the
last day of the Fiscal Quarter just ended prior to the date of
determination (excluding percentage rents received during such 3 month
period, but including an amortized value for percentage rents received
during the current Fiscal Year), from each Property (other than
Property owned by Borrower or any Consolidated Entity for less than
three months) less, divided by (2) 0.0975 (which is the capitalization
rate); times (y) 4 (which is the annualization factor); plus
(ii) an amount equal to the book value of (A) Construction
in Progress plus (B) Properties consisting of unimproved land, as
determined on the last day of the Fiscal Quarter just ended; plus
(iii) an amount equal to the acquisition cost of improved
Properties owned by Borrower or any Consolidated Entity less than three
months, as determined on the last day of the Fiscal Quarter just ended;
plus
(iv) an amount equal to the sum of all unrestricted
balances on deposit with banks or other financial institutions and all
restricted cash held by a Qualified intermediary on behalf of the
Borrower/Parent or any Guarantor; plus
(v) for any Subsidiary which is not a Wholly Owned
Subsidiary, an amount equal to the book value of the Ownership
Percentage of such Subsidiary, as shown on the Borrower/Parent's
balance sheet; plus
(vi) without duplication, the book value of all other
Consolidated Tangible Assets.
"Consolidated Total Liabilities" means the total liabilities
of the Borrower/Parent and the Consolidated Entities, on a consolidated basis
(including liabilities on account of Dividends, whether paid or declared but not
yet paid), plus the aggregate amount of Debt Guaranteed by the Borrower/Parent,
the Guarantors and the Subsidiaries (other than of Debt of any of them) at the
end of the Borrower/Parent's most recent Fiscal Quarter.
"Consolidated Total Secured Debt" shall mean all Debt of the
Borrower/Parent and the Consolidated Entities consisting of (i) capitalized
leases, (ii) money borrowed or the deferred purchase price of real property
which is also secured by a Mortgage on any real property owned by the
Borrower/Parent or any Consolidated Entity; and (iii) Guarantees of the
Borrower/Parent or any Consolidated Entity of Debt of any other Person which is
secured by a Mortgage on an asset of the Borrower/Parent or such Consolidated
Entity.
"Consolidated Unencumbered Net Operating Income" means that
portion of Net Operating Income which is attributable to any Property (i) which
is not subject to any Mortgage or (ii) which is owned by any Person whose stock,
partnership interests or other ownership interests are not subject to any pledge
in favor of a third party.
5
<PAGE> 11
"Consolidated Unencumbered Real Estate Assets" means at any
time, for the Borrower and each Consolidated Entity, determined on a
consolidated basis, the sum (without duplication with respect to any Property)
of the following:
(i) an amount equal to the product of (x) 9.75 (which is
the capitalization rate), times (y) 4 (which is the annualization
factor), times (z) the Net Operating Income for the 3 month period
ending on the last day of the Fiscal Quarter just ended prior to the
date of determination, from each real estate Property not subject to a
Mortgage and owned by the Borrower or any Consolidated Entity for at
least one Fiscal Quarter; plus
(ii) an amount equal to the acquisition cost of improved
Properties not subject to a Mortgage owned by Borrower or any
Consolidated Entity less than three months, as determined on the last
day of the Fiscal Quarter just ended; plus
(iii) an amount equal to the book value of (A) Construction
in Progress on all Properties not subject to a Mortgage, plus (B)
Properties consisting of unimproved land, as determined on the last day
of the Fiscal Quarter just ended, of each Property not subject to a
Mortgage.
"Consolidated Unsecured Interest Expense" means at any time
that portion of Consolidated Interest Expense attributable to Consolidated
Unsecured Senior Debt.
"Consolidated Unsecured Senior Debt" means Consolidated Debt
which is (i) not expressly made subordinated to any other Consolidated Debt and
(ii) not subject to a Mortgage or any other Lien on any Property of the Borrower
or any Consolidated Entity.
"Construction in Progress" means, for any Property in the
process of being developed as a retail shopping center but is not a Stabilized
Property, calculated on a consolidated basis for the Borrower and the
Guarantors, the construction-in-progress as shown from time to time on the books
and records of the Borrower and the Guarantors, maintained in accordance with
GAAP.
"Contribution Agreement" means the Contribution Agreement of
even date herewith in substantially the form of Exhibit O to be executed by the
Borrower and each of the Guarantors pursuant to Section 3.01 or 5.27.
"Control" means, with respect to any Person, the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities or otherwise.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower, are treated as a single
employer under Section 414 of the Code.
"Debt" of any Person means at any date, without duplication,
(i) all obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds,
6
<PAGE> 12
debentures, notes or other similar instruments, (iii) all obligations of such
Person to pay the deferred purchase price of property or services, except trade
accounts payable arising in the ordinary course of business, (iv) all
obligations of such Person as lessee under capital leases, (v) all obligations
of such Person to reimburse any bank or other Person in respect of amounts
payable under a banker's acceptance, (vi) all Redeemable Preferred Stock of such
Person (in the event such Person is a corporation), (vii) all obligations of
such Person to reimburse any bank or other Person in respect of amounts paid or
to be paid under a letter of credit or similar instrument, (viii) all Debt of
others secured by a Lien on any asset of such Person, whether or not such Debt
is assumed by such Person, (ix) all obligations of such Person with respect to
interest rate protection agreements, foreign currency exchange agreements or
other hedging arrangements (valued as the termination value thereof computed in
accordance with a method approved by the International Swap Dealers Association
and agreed to by such Person in the applicable hedging agreement, if any), (x)
all obligations of such Person under a forward contract for the purchase of
equity securities, and (xi) all Debt of others Guaranteed by such Person.
"Debt Rating" means at any time whichever is the average of
the spread between the ratings of the Borrower/Parent's senior unsecured,
unenhanced debt (or, if no such debt exists, its issuer credit rating for debt
of such type) by Moody's or S&P (as such rating may change from time to time,
either pursuant to Section 2.07(g) or otherwise) (provided, that in the event of
a double or greater split rating, the rating immediately above the lowest rating
shall apply), or if only one of them rates the Borrower/Parent's senior
unsecured, unenhanced debt, such rating.
"Default" means any condition or event which constitutes an
Event of Default or which with the giving of notice or lapse of time or both
would, unless cured or waived, become an Event of Default.
"Default Rate" means, with respect to any Revolving Loan, on
any day, the sum of 2% plus the then highest interest rate (including the
Applicable Margin) which may be applicable to any Revolving Loans hereunder
(irrespective of whether any such type of Revolving Loans are actually
outstanding hereunder).
"Dividends" means for any period the sum of all dividends and
other distributions paid or declared during such period in respect of any
Capital Stock and Redeemable Preferred Stock (other than dividends paid or
payable in the form of additional Capital Stock).
"Dollars" or "$" means dollars in lawful currency of the
United States of America.
"Domestic Business Day" means any day except a Saturday,
Sunday or other day on which commercial banks in Georgia are authorized by law
to close.
"Eligible Property" means any retail property of the Borrower
or any of the Guarantors consisting of real estate which constitute "Eligible
Property" as defined in and determined pursuant to the Syndicated Revolving
Credit Agreement.
7
<PAGE> 13
"Eligible Unencumbered Stabilized Property" means any Eligible
Property which (i) is not subject to a Mortgage, and (ii) is a Stabilized
Property.
"Environmental Authority" means any foreign, federal, state,
local or regional government that exercises any form of jurisdiction or
authority under any Environmental Requirement.
"Environmental Permits" means all licenses, permits, orders,
approvals, notices or registrations, approvals or similar legal authorizations
for conducting the business of the Borrower/Parent or any Subsidiary required by
any Environmental Requirement.
"Environmental Judgments and Orders" means (i) all judgments,
decrees or orders arising from or in any way associated with any Environmental
Requirements, whether or not entered upon consent, or (ii) written agreements
with an Environmental Authority or other entity arising from or in any way
associated with any Environmental Requirement, whether or not incorporated in a
judgment, decree or order.
"Environmental Liabilities" means any liabilities, whether
accrued, contingent or otherwise, arising from and in any way associated with
any Environmental Requirements.
"Environmental Notices" means written notice from any
Environmental Authority or by any other person or entity, of Borrower's or any
Subsidiary's alleged noncompliance with or liability under any Environmental
Requirement, including without limitation any written complaints, citations,
demands or requests from any Environmental Authority or from any other person or
entity for correction of any violation of any Environmental Requirement or any
investigations concerning any violation of any Environmental Requirement.
"Environmental Proceedings" means any judicial or
administrative proceedings arising from or in any way associated with any
Environmental Requirement.
"Environmental Releases" means releases as defined in CERCLA
or under any similar applicable state or local environmental law or regulation.
"Environmental Requirements" means any federal, state or local
laws and ordinances, regulations, writs, judgments, orders or Environmental
Permits relating to pollution or protection of the environment and applicable to
the Borrower/Parent, any Subsidiary or the Properties, including but not limited
to any such requirement under CERCLA, EPCRA, RCRA, the Clean Water Act, the
Clean Air Act, similar state or local requirements or common law.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, or any successor law. Any reference to any
provision of ERISA shall also be deemed to be a reference to any successor
provision or provisions thereof.
"Euro-Dollar Business Day" means any Domestic Business Day on
which dealings in Dollar deposits are carried out in the London interbank
market.
8
<PAGE> 14
"Euro-Dollar Loan" means a Revolving Loan which bears or is to
bear interest at a rate based upon the Adjusted London Interbank Offered Rate,
and to be made as a Euro-Dollar Loan pursuant hereto.
"Euro-Dollar Reserve Percentage" has the meaning set forth in
Section 2.07(c).
"Executive Officer" refers to an executive officer of the
Borrower, and means the Chairman, the Vice Chairman, the President, the Chief
Financial Officer, Chief Accounting Officer or the Treasurer of the Borrower.
"Event of Default" has the meaning set forth in Section 6.01.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upward, if necessary, to the next higher 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Domestic
Business Day next succeeding such day, provided that (i) if the day for which
such rate is to be determined is not a Domestic Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the next preceding
Domestic Business Day as so published on the next succeeding Domestic Business
Day, and (ii) if such rate is not so published for any day, the Federal Funds
Rate for such day shall be the average rate charged to the Bank on such day on
such transactions, as determined by the Bank.
"Fiscal Quarter" means any fiscal quarter of the
Borrower/Parent.
"Fiscal Year" means any fiscal year of the Borrower/Parent.
"FMA Agreement" means the Financial Management Account
Standalone Commercial Loan Access Agreement between the Borrower and the Bank,
of even date herewith, as amended or supplemented from time to time, which is
executed and delivered in connection, and will operate in conjunction, with this
Agreement. This Agreement is the "Commercial Loan Agreement" referred to
therein. The terms and provisions of the FMA Agreement hereby are incorporated
herein by reference, and capitalized terms which are used herein without
definition and which are defined in the FMA Agreement have the meanings ascribed
to them in the FMA Agreement.
"Funds From Operations" has the meaning ascribed to such term
in preparation of financial statements for real estate investment trusts as
required by NAREIT from time to time, subject to Section 1.02.
"GAAP" means generally accepted accounting principles applied
on a basis consistent with those which, in accordance with Section 1.02, are to
be used in making the calculations for purposes of determining compliance with
the terms of this Agreement.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person
9
<PAGE> 15
and, without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (i) to secure, purchase or pay
(or advance or supply funds for the purchase or payment of) such Debt or other
obligation (whether arising by virtue of partnership arrangements, by agreement
to keep-well, to purchase assets, goods, securities or services, to provide
collateral security, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for the purpose of assuring in any
other manner the obligee of such Debt or other obligation of the payment thereof
or to protect such obligee against loss in respect thereof (in whole or in
part), provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Guaranty" means, individually and collectively, as the
context shall require, the Guaranty Agreement of even date herewith in
substantially the form of Exhibit N to be executed by the Guarantors,
unconditionally and jointly and severally Guaranteeing payment of the Revolving
Loans, the Revolving Loan Note, the FMA Agreement and all other obligations of
the Borrower to the Bank hereunder, including without limitation all principal,
interest, fees, costs, and compensation and indemnification amounts.
"Guarantors" means any one or more or all of the following, as
the context shall require: (i) IRT Capital Corporation II, a Georgia
corporation, IRT Partners L.P., a Georgia limited partnership (subject to the
provisions of Section 5.28), IRT Management Company, a Georgia corporation, and
IRT Alabama, Inc., an Alabama corporation; and (ii) any Significant Subsidiary
which becomes a Guarantor pursuant to Section 5.27; (iii) any other Subsidiary
which elects to become a Guarantor pursuant to Section 5.27; in each case
subject to the provisions of the last sentence of Section 5.05, and (iv) from
and after the consummation of a Top Level Reorganization and the satisfaction of
the Top Level Reorganization Conditions, the Parent.
"Hazardous Materials" includes, without limitation, (a)
hazardous waste, as defined in the Resource Conservation and Recovery Act of
1980, 42 U.S.C. ss. 6901 et seq. and its implementing regulations and
amendments, or in any similar applicable state or local law or regulation, (b)
"hazardous substance", "pollutant", or "contaminant" as defined in CERCLA, or in
any similar applicable state or local law or regulation, (c) gasoline, or any
other petroleum product or by-product, including, crude oil or any fraction
thereof, (d) toxic substances, as defined in the Toxic Substances Control Act of
1976, or in any similar applicable state or local law or regulation and (e)
insecticides, fungicides, or rodenticides, as defined in the Federal
Insecticide, Fungicide, and Rodenticide Act of 1975, or in any similar
applicable state or local law or regulation.
"Interest Period" means, with respect to each Euro-Dollar
Borrowing, the period commencing on the first Euro-Dollar Business Day of each
month and ending on the first Euro-Dollar Business Day of the immediately
succeeding month; provided, that any Interest Period which would otherwise end
on a day which is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day; provided that no Interest Period shall
extend beyond the Termination Date.
10
<PAGE> 16
"Investment" means any investment in any Person, whether by
means of (i) purchase or acquisition of all or substantially all of the assets
of such Person (or of a division or line of business of such Person), (ii)
purchase or acquisition of obligations or securities of such Person, (iii)
capital contribution to such Person, (iv) loan or advance to such Person, (v)
making of a time deposit with such Person, (vi) Guarantee or assumption of any
obligation of such Person or (vii) by any other means.
"Lending Office" means the Bank's office located at its
address set forth on the signature pages hereof (or identified on the signature
pages hereof as its Lending Office) or such other office as such Bank may
hereafter designate as its Lending Office by notice to the Borrower.
"Lien" means, with respect to any asset, any mortgage, deed to
secure debt, deed of trust, lien, pledge, charge, security interest, security
title, preferential arrangement which has the practical effect of constituting a
security interest or encumbrance, or encumbrance or servitude of any kind in
respect of such asset to secure or assure payment of a Debt or a Guarantee,
whether by consensual agreement or by operation of statute or other law, or by
any agreement, contingent or otherwise, to provide any of the foregoing. For the
purposes of this Agreement, the Borrower/Parent or any Subsidiary shall be
deemed to own subject to a Lien any asset which it has acquired or holds subject
to the interest of a vendor or lessor under any conditional sale agreement,
capital lease or other title retention agreement relating to such asset.
"Liquidity Bank" means for any Designated Bank, at any date of
determination, the collective reference to the financial institutions which at
such date are providing liquidity or credit support facilities to or for the
account of such Designated Bank to fund such Designated Bank's obligations
hereunder or to support the securities, if any, issued by such Designated Bank
to fund such obligations.
"Loan Documents" means this Agreement, the Revolving Loan
Note, the FMA Agreement, the Guaranty, the Contribution Agreement, any other
document evidencing, relating to or securing the Revolving Loans, and any other
document or instrument delivered from time to time in connection with this
Agreement, the Revolving Loan Note, the Loans or the FMA Agreement, as such
documents and instruments may be amended or supplemented from time to time.
"London Interbank Offered Rate" has the meaning set forth in
Section 2.07(c).
"Margin Stock" means "margin stock" as defined in Regulations
T, U or X.
"Material Adverse Effect" means, with respect to any event,
act, condition or occurrence of whatever nature (including any adverse
determination in any litigation, arbitration, or governmental investigation or
proceeding), whether singly or in conjunction with any other event or events,
act or acts, condition or conditions, occurrence or occurrences, whether or not
related, a material adverse change in, or a material adverse effect upon, any of
(a) the financial condition, operations, business, properties or prospects of
the Borrower/Parent and its Consolidated Subsidiaries taken as a whole, (b) the
rights and remedies of the Bank under
11
<PAGE> 17
the Loan Documents, or the ability of the Borrower or the Parent to perform its
obligations under the Loan Documents to which it is a party, as applicable, or
(c) the legality, validity or enforceability of any Loan Document.
"Moody's" means Moody's Investor Service, Inc.
"Mortgage" means, with respect to any referenced Property or
other asset, a mortgage, deed to secure debt, deed of trust or similar
instrument encumbering such Property or other asset.
"Multiemployer Plan" shall have the meaning set forth in
Section 4001(a)(3) of ERISA.
"NAREIT" means the National Association of Real Estate
Investment Trusts.
"Net Income" means, as applied to any Person for any period,
the aggregate amount of net income of such Person, after taxes, for such period,
as determined in accordance with GAAP.
"Net Operating Income" means, (A) for any Property, calculated
on a consolidated basis for the Borrower and the Guarantors, the sum of the
following derived from such Property: (i) Property revenues, less (ii) Property
expenses (excluding depreciation, amortization and debt service), less (iii) an
assumed management fee equal to 4% of gross rental income (less any management
fees included in Property expenses under clause (ii)) and less (iv) the ratable
portion allocable to the measurement period of an annual capital reserve equal
to $0.15 per square foot.
"Non-Wholly Owned Eligible Property" means Eligible Property
which is not wholly owned by the Borrower or any Guarantor, which is Venice
Plaza, Venice, Florida.
"Non-Wholly Owned Eligible Property Ownership Percentage"
refers to the ownership percentage which the Borrower and/or the Guarantors have
with respect to the Non-Wholly owned Eligible Property, which, as of the Closing
Date is 75%.
"Officer's Certificate" has the meaning set forth in Section
3.01(f).
"Operating Profits" means, as applied to any Person for any
period, the operating income of such Person for such period, as determined in
accordance with GAAP.
"Ownership Percentage" means, with respect to any Subsidiary
which is not a Wholly Owned Subsidiary, the percentage which the aggregate
beneficial ownership interests of the Borrower/Parent in such Subsidiary bears
to the aggregate beneficial ownership interests of all owners of beneficial
interests in such Subsidiary.
"Parent" has the meaning set forth in Section 5.28, but
references in this Agreement and the other Loan Documents to Parent shall take
effect only upon consummation of
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<PAGE> 18
the Top Level Reorganization and the satisfaction of each of the Top Level
Reorganization Conditions.
"Participant" has the meaning set forth in Section 9.08(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Performance Pricing Determination Date" has the meaning set
forth in Section 2.07(a).
"Person" means an individual, a corporation, a partnership, an
unincorporated association, a trust or any other entity or organization,
including, but not limited to, a government or political subdivision or an
agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan
which is covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Code and is either (i) maintained by a member
of the Controlled Group for employees of any member of the Controlled Group or
(ii) maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which
a member of the Controlled Group is then making or accruing an obligation to
make contributions or has within the preceding 5 plan years made contributions.
"Prime Rate" refers to that interest rate so denominated and
set by Wachovia from time to time as an interest rate basis for borrowings. The
Prime Rate is but one of several interest rate bases used by Wachovia. Wachovia
lends at interest rates above and below the Prime Rate.
"Properties" means all real property owned, leased or
otherwise used or occupied by the Borrower or any Subsidiary, wherever located.
"Qualified Intermediary" means any Person serving as a
"qualified intermediary" for purposes of a Section 1031 Exchange.
"Quarterly Payment Date means each March 31, June 30,
September 30 and December 31, or, if any such day is not a Domestic Business
Day, the next succeeding Domestic Business Day.
"Redeemable Preferred Stock" of any Person means any preferred
stock issued by such Person which is at any time prior to the Termination Date
either (i) mandatorily redeemable (by sinking fund or similar payments or
otherwise) or (ii) redeemable at the option of the holder thereof.
"Regulation T" means Regulation T of the Board of Governors of
the Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
13
<PAGE> 19
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
"Regulation X" means Regulation X of the Board of Governors of
the Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
"Related Fund" means, with respect to any Bank that is a fund
that invests in bank loans, any other fund that invests in bank loans and is
advised or managed by the same investment advisor as such Bank.
"Relinquished Property" means a Property sold to a Person
which is not the Borrower or an Affiliate thereof, and the proceeds of such sale
are held in an exchange account by a Qualified Intermediary, as part of a
Section 1031 Exchange.
"Replacement Property" means a Property acquired as a
replacement for a Relinquished Property as part of a Section 1031 Exchange.
"Reported Net Income" means, for any period, the Net Income of
the Borrower/Parent and its Consolidated Subsidiaries determined on a
consolidated basis.
"Restricted Payment" means (i) any dividend or other
distribution on any shares of the Borrower/Parent's Capital Stock (except
Dividends payable solely in shares of its Capital Stock) or (ii) any payment on
account of the purchase, redemption, retirement or acquisition of (a) any shares
of the Borrower/Parent's Capital Stock (except shares acquired upon the
conversion thereof into other shares of its Capital Stock) or (b) any option,
warrant or other right to acquire shares of the Borrower/Parent's Capital Stock.
"Revolving Loan Commitment" means $5,000,000, as such amount
may be reduced from time to time pursuant to Sections 2.07 and 2.08.
"Revolving Loans" means Base Rate Loans or Euro-Dollar Loans
made pursuant to the terms and conditions set forth in Section 2.01.
"Revolving Loan Note" means the promissory note of the
Borrower, substantially in the form of Exhibit A, evidencing the obligation of
the Borrower to repay Revolving Loans, together with all amendments,
consolidations, modifications, renewals and supplements thereto.
"Section 1031 Exchange" means a sale and exchange of a
Relinquished Property for a Replacement Property pursuant to and qualifying for
tax treatment under Section 1031 of the Code.
"Significant Subsidiary" means any Subsidiary, other than IRT
Capital Corporation, which has assets which constitute more than 5% of
Consolidated Total Asset Value
14
<PAGE> 20
at the end of the most recent Fiscal Quarter (or, with respect to any Subsidiary
which existed during the entire 4 Fiscal Quarter period but was acquired by the
Borrower/Parent during such period, which would have contributed more than 5% of
Consolidated Total Asset Value during such period had it been a Subsidiary for
the entire period).
"S&P" means Standard & Poor's Ratings Group, a division of
McGraw-Hill, Inc.
"Stabilized Property" means at any time any retail shopping
center Property owned by the Borrower or any Guarantor (i) which is at least 85%
leased and under which rent is being paid (pursuant to written leases which have
been signed by both landlord and tenant, but including any month to month
occupancy by any such tenant after the expiration of such written lease) or (ii)
with respect to which a final certificate of occupancy was issued at least 3
months prior to the date of measurement.
"Stock Buyback Plan" means any stock purchase or other stock
acquisition program approved by the board of directors (or any authorized
committee thereof) of the Borrower/Parent pursuant to which the Borrower/Parent
will purchase or otherwise acquire outstanding shares of the common stock of the
Borrower/Parent.
"Subsidiary" means any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by the Borrower/Parent (including,
after the consummation of the Top Level Reorganization and the satisfaction of
the Top Level Reorganization Conditions, the then Borrower hereunder, IRT
Partners L.P.).
"Syndicated Revolving Credit Agreement" means the Credit
Agreement to be executed on or about the date hereof among the Borrower, the
Banks parties thereto, the Bank, as Administrative Agent and First Union
National Bank, as Syndication Agent, as hereafter amended or supplemented from
time to time, pursuant to which the Banks thereunder made available to the
Borrower a revolving credit facility. References to the Syndicated Revolving
Credit Agreement shall be effective only from and after the execution thereof
and the satisfaction of the conditions precedent set forth in Section 3.01
thereof.
"Taxes" has the meaning set forth in Section 2.13(c).
"Termination Date" means whichever is applicable of (i)
October 31, 2000, (ii) such later date to which it is extended by the Bank
pursuant to Section 2.06(b), in its sole and absolute discretion, (iii) the date
the Revolving Loan Commitment is terminated pursuant to Section 6.01 following
the occurrence of an Event of Default, or (iv) the date the Borrower terminates
the Revolving Loan Commitments entirely pursuant to Section 2.09.
"Third Parties" means all lessees, sublessees, licensees and
other users of the Properties, excluding those users of the Properties in the
ordinary course of the Borrower's business and on a temporary basis.
15
<PAGE> 21
"Transferee" has the meaning set forth in Section 9.08(d).
"Top Level Reorganization" has the meaning set forth in
Section 5.28.
"Top Level Reorganization Conditions" has the meaning set
forth in Section 5.28.
"Unfunded Vested Liabilities" means, with respect to any Plan
at any time, the amount (if any) by which (i) the present value of all vested
nonforfeitable benefits under such Plan exceeds (ii) the fair market value of
all Plan assets allocable to such benefits, all determined as of the then most
recent valuation date for such Plan, but only to the extent that such excess
represents a potential liability of a member of the Controlled Group to the PBGC
or the Plan under Title IV of ERISA.
"Wachovia" means Wachovia Bank, N.A., a national banking
association, and its successors.
"Wholly Owned Subsidiary" means any Subsidiary all of the
shares of capital stock or other ownership interests of which (except directors'
qualifying shares) are at the time directly or indirectly owned by the
Borrower/Parent.
"Y2K Plan" has the meaning set forth in Section 4.19.
"Year 2000 Compliant and Ready" means that (a) the
Borrower's/Parent's and its Subsidiaries' hardware and software systems with
respect to the operation of its business and its general business plan will: (i)
handle date information involving any and all dates before, during and after
January 1, 2000, including accepting input, providing output and performing date
calculations in whole or in part; (ii) operate, accurately without material
interruption on and in respect of any and all dates before, during and after
January 1, 2000 and without any change in performance; (iii) store and provide
date input information without creating any ambiguity as to the century and; (b)
the Borrower/Parent has developed alternative plans to ensure business
continuity in the event of the failure of any or all of items (i) through (iii)
in clause (a) above in this definition.
SECTION 1.02. ACCOUNTING TERMS AND DETERMINATIONS.
Unless otherwise specified herein, all terms of an accounting
character used herein shall be interpreted, all accounting determinations
hereunder shall be made, and all financial statements required to be delivered
hereunder shall be prepared, in accordance with GAAP, or with respect to the
calculation of Funds From Operations, as required by NAREIT, applied on a basis
consistent (except for changes concurred in by the Borrower/Parent's independent
public accountants or otherwise required by a change in GAAP) with the most
recent audited consolidated financial statements of the Borrower/Parent and its
Consolidated Subsidiaries delivered to the Bank unless with respect to any such
change concurred in by the Borrower/Parent's independent public accountants or
required by GAAP or, with respect to the calculation of Funds From Operations,
as required by NAREIT, in determining compliance with any of the provisions of
this Agreement or any of the other Loan Documents: (i) the Borrower
16
<PAGE> 22
shall have objected to determining such compliance on such basis at the time of
delivery of such financial statements, or (ii) the Bank shall so object in
writing within 30 days after the delivery of such financial statements, in
either of which events such calculations shall be made on a basis consistent
with those used in the preparation of the latest financial statements as to
which such objection shall not have been made (which, if objection is made in
respect of the first financial statements delivered under Section 5.01 hereof,
shall mean the financial statements referred to in Section 4.04).
SECTION 1.03. REFERENCES.
Unless otherwise indicated, references in this Agreement to
"Articles", "Exhibits", "Schedules", "Sections" and other Subdivisions are
references to articles, exhibits, schedules, sections and other subdivisions
hereof.
SECTION 1.04. USE OF DEFINED TERMS.
All terms defined in this Agreement shall have the same
defined meanings when used in any of the other Loan Documents, unless otherwise
defined therein or unless the context shall require otherwise.
SECTION 1.05. TERMINOLOGY.
All personal pronouns used in this Agreement, whether used in
the masculine, feminine or neuter gender, shall include all other genders; the
singular shall include the plural, and the plural shall include the singular.
Titles of Articles and Sections in this Agreement are for convenience only, and
neither limit nor amplify the provisions of this Agreement.
ARTICLE II.
THE CREDITS
SECTION 2.01. COMMITMENTS TO LEND REVOLVING LOANS.
The Bank agrees, on the terms and conditions set forth herein,
to make Revolving Loans to the Borrower from time to time before the Termination
Date; provided that, immediately after each such Revolving Loan is made, the
aggregate outstanding principal amount of Revolving Loans by the Bank shall not
exceed the amount of its Revolving Loan Commitment. The Borrower may borrow
under this Section, repay or prepay Revolving Loans and reborrow under this
Section at any time before the Termination Date. All Revolving Loans made
hereunder constitute Advances under the FMA Agreement. The Borrower may request
any Revolving Loan by telephone, and the Bank shall be entitled to treat each
such request as the authorized request of the Borrower. In addition, the Bank
shall make Revolving Loans consisting of Advances into the Checking Account from
time to time as needed pursuant to Section 2 of the FMA Agreement in order that
the Collected Balance is not less than the Target
17
<PAGE> 23
Balance on any Domestic Business Day, and Revolving Loans otherwise may be made
at any time pursuant to the provisions of the FMA Agreement.
SECTION 2.02. REVOLVING LOAN NOTE.
(a) The Revolving Loans shall be evidenced by the Revolving
Loan Note.
(b) The Bank shall keep records showing the effective interest
rate for each Revolving Loan made by it and the date and amount of each payment
of principal made by the Borrower with respect thereto, and such records shall
constitute rebuttable presumptive evidence of the respective principal amount
owing and unpaid on such Revolving Loan Note.
SECTION 2.03. MATURITY OF REVOLVING LOANS.
The outstanding principal amount of the Revolving Loans, if
any, together with all accrued but unpaid interest thereon, if any, shall be due
and payable on October 31, 2000, unless the Termination Date is otherwise
extended by the Bank, in its sole and absolute discretion. Upon the written
request of the Borrower, which request shall be delivered to the Bank not more
than 30 days prior to the Termination Date then in effect, the Bank shall have
the option (without any obligation whatsoever so to do) of extending the
Termination Date for an additional 364 day period from the Termination Date then
in effect. In the event that the Bank chooses to extend the Termination Date for
such an additional 364 day period, notice shall be given by the Bank to the
Borrower within 15 days of such request; provided, that if within such 15 day
period the Bank has failed to give any notice of its election to so extend the
Termination Date for an additional 364 day period, the Bank shall be deemed to
have elected not to so extend the Termination Date.
SECTION 2.04. INTEREST RATES.
(a) "Applicable Margin" means:
(i) for the period commencing on the Closing Date to and
including the first Performance Pricing Determination Date, (x) for any
Base Rate Loan, 0.00%, and (y) for any Euro-Dollar Loan, 1.15%; and
(ii) from and after the first Performance Pricing
Determination Date, (x) for any Base Rate Loan, 0.00% and (y) for each
Euro-Dollar Loan, the percentage determined on each Performance Pricing
Determination Date by reference to the table set forth below as to such
type of Revolving Loan and the Debt Rating on such Performance Pricing
Determination Date; provided, that if there is no Debt Rating, the
Applicable Margin for Euro-Dollar Loans shall be based upon Level V of
the table below.
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<PAGE> 24
<TABLE>
<CAPTION>
==================================================================================================================
/ LEVEL LEVEL LEVEL LEVEL LEVEL
I II III IV V
==================================================================================================================
<S> <C> <C> <C> <C> <C>
>=BBB >=BBB-
>=BBB+ or Baa2 or Baa3 <BBB-
Debt Rating >=A- or Baa1 but but or
but <BBB+ or <BBB or Baa3
<A- Baa1 Baa2
- ------------------------------------------------------------------------------------------------------------------
Applicable Margin 0.70% 0.85% 1.00% 1.15% 1.40%
==================================================================================================================
</TABLE>
In determining the amounts to be paid by the Borrower pursuant to Sections
2.07(b), and 2.08(a), the Borrower and the Bank shall refer to the Borrower's
Debt Rating from time to time. For purposes hereof, "Performance Pricing
Determination Date" shall mean each date on which the Debt Rating changes. Each
change in interest and fees as a result of a change in Debt Rating shall be
effective only for Revolving Loans which are made and fees which accrue on or
after the relevant Performance Pricing Determination Date. All determinations
hereunder shall be made by the Bank. The Borrower shall promptly notify the Bank
of any change in the Debt Rating.
(b) Except as otherwise provided herein or in Article VII,
each Revolving Loan made hereunder shall be made as a Euro-Dollar Loan, and
shall bear interest on the outstanding principal amount thereof at a rate per
annum equal to the sum of the Applicable Margin plus the Adjusted London
Interbank Offered Rate, determined and reset on the first Day of each Interest
Period; provided, however, that the Borrower may request for any Interest Period
that each Revolving Loan bear interest during such Interest Period on the
outstanding principal amount thereof at a rate per annum equal to the Base Rate.
Any Revolving Loan which is to be made as a Base Rate Loan pursuant to Article
VII shall bear interest on the outstanding principal amount thereof at a rate
per annum equal to the Base Rate. In either case, such interest shall be payable
monthly in arrears on the 10th calendar day of each month for the calendar month
just ended, and on the Termination Date. Any overdue principal of and, to the
extent permitted by law, overdue interest on any Revolving Loan shall bear
interest, payable on demand, for each day until paid at a rate per annum equal
to the Default Rate.
The "Adjusted London Interbank Offered Rate" applicable to any
Interest Period means a rate per annum equal to the quotient obtained (rounded
upwards, if necessary, to the next higher 1/100th of 1%) by dividing (i) the
applicable London Interbank Offered Rate for such Interest Period by (ii) 1.00
minus the Euro-Dollar Reserve Percentage.
The "London Interbank Offered Rate" applicable to any
Euro-Dollar Loan means for the Interest Period of such Euro-Dollar Loan, the
rate per annum determined on the basis of the offered rate for deposits in
Dollars of amounts equal or comparable to the principal amount of such
Euro-Dollar Loan offered for a term comparable to such Interest Period, which
rates
19
<PAGE> 25
appear on Telerate Page 3750 effective as of 11:00 A.M., London time, 2
Euro-Dollar Business Days prior to the first day of such Interest Period,
provided that if no such offered rates appear on such page, the "London
Interbank Offered Rate" for such Interest Period will be the arithmetic average
(rounded upward, if necessary, to the next higher 1/100th of 1%) of rates quoted
by not less than 2 major banks in New York City, selected by the Bank, at
approximately 10:00 A.M., New York City time, 2 Euro-Dollar Business Days prior
to the first day of such Interest Period, for deposits in Dollars offered by
leading European banks for a period comparable to such Interest Period in an
amount comparable to the principal amount of such Euro-Dollar Loan.
"Euro-Dollar Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement for a member bank of
the Federal Reserve System in respect of "Eurocurrency liabilities" (or in
respect of any other category of liabilities which includes deposits by
reference to which the interest rate on Euro-Dollar Loans is determined or any
category of extensions of credit or other assets which includes loans by a
non-United States office of any Bank to United States residents). The Adjusted
London Interbank Offered Rate shall be adjusted automatically on and as of the
effective date of any change in the Euro-Dollar Reserve Percentage.
SECTION 2.05. FEES
The Borrower shall pay to the Bank the fees agreed upon
pursuant to the FMA Agreement. In addition, the Borrower shall pay to the Bank a
facility fee (the "Facility Fee") on the maximum amount of the Revolving Loan
Commitment in effect for any relevant period, irrespective of usage, calculated
in the manner provided in Section 2.04(a)(ii), at a rate per annum equal to (i)
for the period commencing on the Closing Date to and including the first
Performance Pricing Determination Date, 0.20%; and (ii) from and after the first
Performance Pricing Determination Date, the percentage determined on each
Performance Pricing Determination Date by reference to the table set forth below
and the Debt Rating for the quarterly or annual period ending immediately prior
to such Performance Pricing Determination Date; provided, that if there is no
Debt Rating, the Facility Fee shall be based upon Level V of the table below.
The Facility Fee shall accrue at all times from and including the Closing Date
to but excluding the Termination Date and shall be payable, in arrears, on each
Quarterly Payment Date and on the Termination Date.
20
<PAGE> 26
<TABLE>
<CAPTION>
==================================================================================================================
LEVEL LEVEL LEVEL LEVEL LEVEL
I II III IV V
==================================================================================================================
<S> <C> <C> <C> <C> <C>
>=BBB >=BBB-
>=BBB+ or Baa2 or Baa3 <BBB-
Debt Rating >=A- or Baa1 but but or
but <BBB+ or <BBB or Baa3
<A- Baa1 Baa2
- ------------------------------------------------------------------------------------------------------------------
Facility Fee 0.15% 0.15% 0.20% 0.20% 0.25%
==================================================================================================================
</TABLE>
SECTION 2.06. OPTIONAL TERMINATION OR REDUCTION OF REVOLVING
LOAN COMMITMENT.
The Borrower may, upon at least 2 Domestic Business Days'
notice, terminate at any time, or reduce the Revolving Loan Commitment from time
to time. If the Revolving Loan Commitment is terminated in its entirety, all
accrued fees (as provided in the FMA Agreement) shall be due and payable on the
effective date of such termination, and the FMA Agreement also shall be
terminated.
SECTION 2.07. MANDATORY REDUCTION AND TERMINATION OF REVOLVING
LOAN COMMITMENT.
The Revolving Loan Commitment shall terminate on the
Termination Date and any Revolving Loans then outstanding (together with accrued
interest thereon) shall be due and payable on such date, together with all
accrued fees (as provided in the FMA Agreement), and the FMA Agreement also
shall be terminated.
SECTION 2.08. PREPAYMENTS.
(a) Optional Prepayments. The Borrower may prepay the
Revolving Loans in whole or in part at any time, by paying the principal amount
to be prepaid together with accrued interest thereon to the date of prepayment.
(b) Mandatory Prepayment. Prepayments shall be made in
accordance with the FMA Agreement. On each date on which the Revolving Loan
Commitment is reduced pursuant to Section 2.07 or 2.08, the Borrower shall repay
or prepay such principal amount of the outstanding Revolving Loans, if any
(together with interest accrued thereon), as may be necessary so that after such
payment the aggregate unpaid principal amount of the Revolving Loans does not
exceed the aggregate amount of the Revolving Loan Commitment as then reduced.
21
<PAGE> 27
SECTION 2.09. GENERAL PROVISIONS AS TO PAYMENTS.
(a) The Borrower shall make each payment of principal of, and
interest on, the Revolving Loans in accordance with the FMA Agreement or
otherwise not later than noon (Atlanta, Georgia time) on the date when due, in
Federal or other funds immediately available in Atlanta, Georgia, to the Bank at
its address referred to in Section 8.01.
(b) Whenever any payment of principal of, or interest on, the
Revolving Loans shall be due on a day which is not a Domestic Business Day, the
date for payment thereof shall be extended to the next succeeding Domestic
Business Day.
SECTION 2.10. COMPUTATION OF INTEREST.
Interest on the Revolving Loans shall be computed on the basis
of a year of 360 days and paid for the actual number of days elapsed (including
the first day but excluding the last day).
ARTICLE III.
CONDITIONS TO BORROWINGS
SECTION 3.01. CONDITIONS TO FIRST BORROWING.
The obligation of the Bank to make a Revolving Loan on the
occasion of the first Borrowing is subject to the satisfaction of the conditions
set forth in this Section 3.01:
(a) from each of the parties hereto of either (i) a duly
executed counterpart of this Agreement signed by such party or (ii) a
facsimile transmission of such executed counterpart, with the original
to be sent to the Bank by overnight courier;
(b) receipt by the Bank of a duly executed Revolving Loan
Note, a duly executed FMA Agreement, a Guaranty duly executed by the
Guarantors and a Contribution Agreement duly executed by the Borrower
and the Guarantors;
(c) an opinion letter (together with any opinions of local
counsel relied on therein) of Alston &Bird LLP, counsel for the
Borrower and the Guarantors, dated as of the Closing Date,
substantially in the form of Exhibit B and covering such additional
matters relating to the transactions contemplated hereby as the Bank
may reasonably request;
(d) an opinion of Jones, Day, Reavis & Pogue, special counsel
for the Bank, dated as of the Closing Date, substantially in the form
of Exhibit C and covering such additional matters relating to the
transactions contemplated hereby as the Bank may reasonably request;
22
<PAGE> 28
(e) a certificate (the "Closing Certificate") substantially in
the form of Exhibit E), dated as of the Closing Date, signed by a
principal financial officer of the Borrower, to the effect that (i) no
Default has occurred and is continuing on the date of the first
Borrowing and (ii) the representations and warranties of the Borrower
contained in Article IV are true on and as of the date of the first
Borrowing hereunder; and
(f) all documents which the Bank may reasonably request
relating to the existence of the Borrower, the corporate authority for
and the validity of this Agreement, the Revolving Loan Note, the FMA
Agreement, and any other matters relevant hereto, all in form and
substance satisfactory to the Bank, including, without limitation, (A)
a certificate of the Borrower substantially in the form of Exhibit F
(the "Officer's Certificate"), signed by the Secretary or an Assistant
Secretary of the Borrower, certifying as to the names, true signatures
and incumbency of the officer or officers of the Borrower authorized to
execute and deliver the Loan Documents, and certified copies of the
following items: (i) the Borrower's Certificate of Incorporation, (ii)
the Borrower's Bylaws, (iii) a certificate of the Secretary of State of
the State of Georgia as to the good standing of the Borrower as a
Georgia corporation, and (iv) the action taken by the Board of
Directors of the Borrower authorizing the Borrower's execution,
delivery and performance of this Agreement, the Revolving Loan Note,
the FMA Agreement and the other Loan Documents to which the Borrower is
a party, and (B) from each Guarantor, a similar Officer's Certificate,
signed by the Secretary or an Assistant Secretary of such Guarantor,
containing similar certifications as above as to such Guarantor and the
Guaranty and Contribution Agreement.
SECTION 3.02. CONDITIONS TO ALL BORROWINGS.
The obligation of the Bank to make a Revolving Loan on the
occasion of each Borrowing is subject to the satisfaction of the following
conditions:
(a) the fact that, immediately before and after such
Borrowing, no Default shall have occurred and be continuing;
(b) the fact that the representations and warranties of the
Borrower contained in Article IV of this Agreement shall be true on and
as of the date of such Borrowing (except to the extent any such
representation or warranty is expressly made as of a prior date); and
(c) the fact that, immediately after such Borrowing, the
aggregate outstanding principal amount of Revolving Loans by the Bank
shall not exceed the amount of its Revolving Loan Commitment.
Each Borrowing hereunder shall be deemed to be a
representation and warranty by the Borrower on the date of such Borrowing as to
the truth and accuracy of the facts specified in paragraphs (a), (b) and (c) of
this Section.
23
<PAGE> 29
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
The Borrower and (by incorporation by reference in the
Guaranty) the Guarantors, as expressly stated, each represents and warrants
that:
SECTION 4.01. CORPORATE EXISTENCE AND POWER.
The Borrower and each Guarantor is a corporation, partnership
or other legal entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, is duly qualified to
transact business in every jurisdiction where, by the nature of its business,
such qualification is necessary other than such qualifications the failure to
obtain which would not result in a Material Adverse Effect, and has all powers
and all governmental licenses, authorizations, consents and approvals required
to carry on its business as now conducted, except for such licenses,
authorizations, consents and approvals, the failure to obtain which, would not
result in a Material Adverse Effect.
SECTION 4.02. CORPORATE AND GOVERNMENTAL AUTHORIZATION; NO
CONTRAVENTION.
The execution, delivery and performance by the Borrower of
this Agreement, the Revolving Loan Note, the FMA Agreement and the other Loan
Documents, and by each Guarantor of the Guaranty and Contribution Agreement and,
upon consummation of the Top Level Reorganization, of the Joinder Agreement, the
new Revolving Loan Note and the Contribution Agreement in accordance with
Section 5.28, (i) are within the Borrower's or such Guarantor's or the Parent's
powers, (ii) have been duly authorized by all necessary corporate action, (iii)
require no action by or in respect of or filing with, any governmental body,
agency or official, (iv) do not contravene, or constitute a default under, any
provision of applicable law or regulation or of the certificate of incorporation
or by-laws of the Borrower, such Guarantor or the Parent or of any agreement,
judgment, injunction, order, decree or other instrument binding upon the
Borrower, any of its Subsidiaries or the Parent, except those as to which
consents or waivers have been obtained, and (v) do not result in the creation or
imposition of any Lien on any asset of the Borrower, any of its Subsidiaries or
the Parent.
SECTION 4.03. BINDING EFFECT.
This Agreement constitutes a valid and binding agreement of
the Borrower and, upon consummation of the Top Level Reorganization, the Parent,
enforceable in accordance with its terms, and the Revolving Loan Note, the FMA
Agreement and the other Loan Documents, when executed and delivered by the
Borrower, and, upon consummation of the Top Level Reorganization, the Parent,
and each Guarantor which is a party thereto in accordance with this Agreement,
will constitute valid and binding obligations of the Borrower, the Parent and
such Guarantor enforceable in accordance with their respective terms, provided
that the enforceability hereof and thereof is subject in each case to general
principles of equity and to bankruptcy, insolvency and similar laws affecting
the enforcement of creditors' rights generally.
24
<PAGE> 30
SECTION 4.04. FINANCIAL INFORMATION.
(a) The consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of December 31, 1998 and the related consolidated
statements of income, shareholders' equity and cash flows for the Fiscal Year
then ended, reported on by Arthur Andersen LLP, copies of which have been
delivered to the Bank, and the unaudited consolidated financial statements of
the Borrower for the interim period ended June 30, 1999, copies of which have
been delivered to the Bank, fairly present, in conformity with GAAP, except, in
the case of unaudited financial statements, for year-end adjustments and the
absence of notes, the consolidated financial position of the Borrower and its
Consolidated Subsidiaries as of such dates and their consolidated results of
operations and cash flows for such periods stated.
(b) Since December 31, 1998, there has been no event, act,
condition or occurrence having a Material Adverse Effect.
SECTION 4.05. NO LITIGATION.
There is no action, suit or proceeding pending, or to the
knowledge of the Borrower and the Guarantors threatened, against or affecting
the Borrower or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official which could have a Material Adverse Effect
or which in any manner draws into question the validity of or could impair the
ability of the Borrower or any Guaranty to perform its obligations under, this
Agreement, the Revolving Loan Note, the FMA Agreement or any of the other Loan
Documents to which it is a party.
SECTION 4.06. COMPLIANCE WITH ERISA.
(a) The Borrower/Parent and each member of the Controlled
Group have fulfilled their obligations under the minimum funding standards of
ERISA and the Code with respect to each Plan and are in compliance in all
material respects with the presently applicable provisions of ERISA and the
Code, and have not incurred any liability to the PBGC or a Plan under Title IV
of ERISA.
(b) Neither the Borrower/Parent nor any member of the
Controlled Group is or ever has been obligated to contribute to any
Multiemployer Plan.
SECTION 4.07. COMPLIANCE WITH LAWS; PAYMENT OF TAXES.
The Borrower/Parent and its Subsidiaries are in material
compliance with all applicable laws, regulations and similar requirements of
governmental authorities, except where such compliance is being contested in
good faith through appropriate proceedings. There have been filed on behalf of
the Borrower/Parent and its Subsidiaries all material Federal, state and local
income, excise, property and other material tax returns which are required to be
filed by them and all taxes due pursuant to such returns or pursuant to any
assessment received by or on behalf of the Borrower/Parent or any Subsidiary
have been paid, except for those taxes which are being contested in good faith
by appropriate proceedings for which adequate reserves have been
25
<PAGE> 31
established in accordance with GAAP. The charges, accruals and reserves on the
books of the Borrower/Parent and its Subsidiaries in respect of taxes or other
governmental charges are, in the opinion of the Borrower/Parent, adequate.
United States income tax returns of the Borrower and its Subsidiaries have been
audited and closed through the Fiscal Year ended December 31, 1992.
SECTION 4.08. SUBSIDIARIES.
Each of the Borrower/Parent's Subsidiaries is a corporation,
partnership or other legal entity duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization, is duly qualified
to transact business in every jurisdiction where, by the nature of its business,
such qualification is necessary other than such qualifications the failure to
obtain which would not result in a Material Adverse Effect, and has all powers
and all governmental licenses, authorizations, consents and approvals required
to carry on its business as now conducted except for such licenses,
authorizations, consents and approvals, the failure to obtain which, would not
result in a Material Adverse Effect. As of the Closing Date, the Borrower has no
Subsidiaries except for those Subsidiaries listed on Schedule 4.08, which
accurately sets forth each such Subsidiary's complete name and jurisdiction of
organization.
SECTION 4.09. INVESTMENT COMPANY ACT.
Neither the Borrower/Parent nor any of its Subsidiaries is an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
SECTION 4.10. PUBLIC UTILITY HOLDING COMPANY ACT.
Neither the Borrower/Parent nor any of its Subsidiaries is a
"holding company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company", as such terms are defined in the Public Utility Holding Company Act of
1935, as amended.
SECTION 4.11. OWNERSHIP OF PROPERTY; LIENS.
Each of the Borrower/Parent and its Consolidated Subsidiaries
has title to its properties sufficient for the conduct of its business, and none
of such property is subject to any Lien except as permitted in Section 5.17.
SECTION 4.12. NO DEFAULT.
To the Borrower and the Parent's knowledge, neither the
Borrower nor the Parent nor any of the Consolidated Subsidiaries is in default
under or with respect to any agreement, instrument or undertaking to which it is
a party or by which it or any of its property is bound which could reasonably be
expected to have or cause a Material Adverse Effect. No Default or Event of
Default has occurred and is continuing.
26
<PAGE> 32
SECTION 4.13. FULL DISCLOSURE.
All information heretofore furnished by the Borrower or the
Parent to the Bank for purposes of or in connection with this Agreement or any
transaction contemplated hereby is, and all such information hereafter furnished
by the Borrower or the Parent to the Bank will be, true, accurate and complete
in every material respect or based on reasonable estimates on the date as of
which such information is stated or certified. The Borrower and the Parent have
disclosed to the Bank in writing any and all facts which could have or cause a
Material Adverse Effect.
SECTION 4.14. ENVIRONMENTAL MATTERS.
To the knowledge of the Borrower/Parent, except as set forth
in Schedule 4.14, and except to the extent not causing or which reasonably could
not be expected to cause a Material Adverse Effect:
(a) Neither the Borrower/Parent nor any Subsidiary is subject
to any Environmental Liability and neither the Borrower/Parent nor any
Subsidiary has been designated as a potentially responsible party under CERCLA
or under any state statute similar to CERCLA. None of the Properties has been
identified or proposed for inclusion on any (i) National Priorities List under
40 C.F.R. ss. 300, (ii) CERCLIS list or (iii) any list arising from a state
statute similar to CERCLA.
(b) No Hazardous Materials have been or are being used,
produced, manufactured, processed, treated, recycled, generated, stored,
disposed of, managed or otherwise handled at, or shipped or transported to or
from the Properties or are otherwise present at, on, in or under the Properties,
and no Hazardous Materials are or have been migrating to or from the Properties,
except for Hazardous Materials, such as cleaning solvents, pesticides and other
materials used, produced, manufactured, processed, treated, recycled, generated,
stored, disposed of, managed, or otherwise handled in the ordinary course of
business in compliance with all applicable Environmental Requirements.
(c) The Borrower/Parent and each of its Subsidiaries has
procured all Environmental Permits necessary for the conduct of its business,
and is in compliance with all Environmental Requirements in connection with the
operation of the Properties and the Borrower/Parent's, and each of its
Subsidiary's, respective businesses.
SECTION 4.15. CAPITAL STOCK.
All Capital Stock, debentures, bonds, notes and all other
securities of the Borrower/Parent and its Subsidiaries presently issued and
outstanding are validly and properly issued in accordance with all applicable
laws, including, but not limited to, the "Blue Sky" laws of all applicable
states and the federal securities laws. The issued shares of Capital Stock of
the Borrower/Parent's Wholly Owned Subsidiaries are owned by the Borrower/Parent
free and clear of any Lien or adverse claim, except as may be otherwise
permitted in Section 5.17. At least a majority of the issued shares of capital
stock of each of the Borrower/Parent's other Subsidiaries
27
<PAGE> 33
(other than Wholly Owned Subsidiaries) is owned by the Borrower/Parent free and
clear of any Lien or adverse claim, except as may be otherwise permitted in
Section 5.17.
SECTION 4.16. MARGIN STOCK.
Neither the Borrower/Parent nor any of its Subsidiaries is
engaged principally, or as one of its important activities, in the business of
purchasing or carrying any Margin Stock, and no part of the proceeds of any
Revolving Loan will be used to purchase or carry any Margin Stock in violation
of the provisions of Regulation T, U or X or to extend credit to others for the
purpose of purchasing or carrying any Margin Stock in violation of the
provisions of Regulation T, U or X, or be used for any purpose which violates,
or which is inconsistent with, the provisions of Regulation T, U or X.
SECTION 4.17. INSOLVENCY.
After giving effect to the execution and delivery of the Loan
Documents and the making of the Revolving Loans under this Agreement: (i) the
Borrower will not (x) be "insolvent," within the meaning of such term as used in
O.C.G.A. ss. 18-2-22 or as defined in ss. 101 of the "Bankruptcy Code", or
Section 2 of either the "UFTA" or the "UFCA", or as defined or used in any
"Other Applicable Law" (as those terms are defined below), or (y) be unable to
pay its debts generally as such debts become due within the meaning of Section
548 of the Bankruptcy Code, Section 4 of the UFTA or Section 6 of the UFCA, or
(z) have an unreasonably small capital to engage in any business or transaction,
whether current or contemplated, within the meaning of Section 548 of the
Bankruptcy Code, Section 4 of the UFTA or Section 5 of the UFCA; and (ii) the
obligations of the Borrower under the Loan Documents and with respect to the
Revolving Loans will not be rendered avoidable under any Other Applicable Law.
For purposes of this Section 4.17, "Bankruptcy Code" means Title 11 of the
United States Code, "UFTA" means the Uniform Fraudulent Transfer Act, "UFCA"
means the Uniform Fraudulent Conveyance Act, and "Other Applicable Law" means
any other applicable law pertaining to fraudulent transfers or acts voidable by
creditors, in each case as such law may be amended from time to time.
SECTION 4.18. INSURANCE.
The Borrower/Parent and each of its Subsidiaries has (either
in the name of the Borrower/Parent or in such Subsidiary's own name), with
financially sound and reputable insurance companies, insurance in at least such
amounts and against at least such risks (including on all its property, and
public liability and worker's compensation) as are usually insured against in
the same general area by companies of established repute engaged in the same or
similar business.
SECTION 4.19. Y2K PLAN.
The Borrower/Parent has developed and has delivered to the
Bank a comprehensive plan (the "Y2K Plan") for insuring that the
Borrower/Parent's and its Subsidiaries' software and hardware systems which
impact or affect in any way the business
28
<PAGE> 34
operations of the Borrower/Parent and its Subsidiaries' will be Year 2000
Compliant and Ready. The Borrower/Parent and its Subsidiaries' have met the Y2K
Plan milestones such that all hardware and software systems will be Year 2000
Compliant and Ready in accordance with the Y2K Plan on or before December 1,
1999.
SECTION 4.20. REAL ESTATE INVESTMENT TRUST.
The Borrower is qualified under the Code as a real estate
investment trust.
ARTICLE V.
COVENANTS
The Borrower and (by incorporation by reference in the
Guaranty) the Guarantors (including the Parent, as to references to the Parent
and to the Guarantors), as expressly stated, each agrees that, so long as the
Bank has any Revolving Loan Commitment hereunder or any amount payable hereunder
or under the Revolving Loan Note or the FMA Agreement remains unpaid:
SECTION 5.01. INFORMATION.
The Borrower and the Parent will deliver to the Bank:
(a) as soon as available and in any event within 90 days after
the end of each Fiscal Year, a consolidated balance sheet of the Borrower/Parent
and its Consolidated Subsidiaries as of the end of such Fiscal Year and the
related consolidated statements of income, shareholders' equity and cash flows
for such Fiscal Year, setting forth in each case in comparative form the figures
for the previous fiscal year, all certified by Arthur Andersen LLP or other
independent public accountants of nationally recognized standing, with such
certification to be free of exceptions and qualifications not acceptable to the
Bank;
(b) as soon as available and in any event within 45 days after
the end of each of the first 3 Fiscal Quarters of each Fiscal Year, a
consolidated balance sheet of the Borrower/Parent and its Consolidated
Subsidiaries as of the end of such Fiscal Quarter and the related consolidated
statement of income and statement of cash flows for such Fiscal Quarter and for
the portion of the Fiscal Year ended at the end of such Fiscal Quarter, setting
forth in each case in comparative form the figures for the corresponding Fiscal
Quarter and the corresponding portion of the previous Fiscal Year, all certified
(subject to normal year-end adjustments and without notes) as to fairness of
presentation, GAAP and consistency by the chief financial officer or the chief
accounting officer of the Borrower/Parent;
(c) simultaneously with the delivery of each set of financial
statements referred to in paragraphs (a) and (b) above, a certificate,
substantially in the form of Exhibit F (a "Compliance Certificate"), of the
chief financial officer or the chief accounting officer of the Borrower/Parent
(i) setting forth in reasonable detail the calculations required to establish
29
<PAGE> 35
whether the Borrower/Parent was in compliance with the requirements of Sections
5.05, 5.15, 5.16 and Sections 5.19 through 5.25, inclusive on the date of such
financial statements and (ii) stating whether any Default exists on the date of
such certificate and, if any Default then exists, setting forth the details
thereof and the action which the Borrower/Parent is taking or proposes to take
with respect thereto; provided, however, that so long as the Syndicated
Revolving Credit Agreement is in effect and the Borrower furnishes to the Bank a
Compliance Certificate pursuant to and in accordance with Section 5.01(c)
thereof, no Compliance Certificate need be furnished pursuant to this Agreement.
(d) simultaneously with the delivery of each set of annual
financial statements referred to in paragraph (a) above, a statement of the firm
of independent public accountants which reported on such statements to the
effect that nothing has come to their attention to cause them to believe that
any Default existed on the date of such financial statements;
(e) within 5 Domestic Business Days after an Executive Officer
of the Borrower or a comparable officer of the Parent obtains actual knowledge
of the occurrence of any Default, a certificate of the chief financial officer
or the chief accounting officer of the Borrower or Parent stating that it is a
"Notice of Default" and setting forth the details thereof and the action which
the Borrower or Parent is taking or proposes to take with respect thereto;
(f) promptly upon the mailing thereof to the shareholders of
the Borrower/Parent generally, copies of all financial statements, reports and
proxy statements so mailed;
(g) promptly upon the filing thereof, copies of all
registration statements (other than the exhibits thereto and any registration
statements on Form S-8 or its equivalent) and annual, quarterly or monthly
reports which the Borrower/Parent shall have filed with the Securities and
Exchange Commission;
(h) if and when any member of the Controlled Group (i) gives
or is required to give notice to the PBGC of any "reportable event" (as defined
in Section 4043 of ERISA) with respect to any Plan which might constitute
grounds for a termination of such Plan under Title IV of ERISA, or knows that
the plan administrator of any Plan has given or is required to give notice of
any such reportable event, a copy of the notice of such reportable event given
or required to be given to the PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA, a copy of such notice; or (iii)
receives notice from the PBGC under Title IV of ERISA of an intent to terminate
or appoint a trustee to administer any Plan, a copy of such notice;
(i) prior to January 1, 2000, within 5 Domestic Business Days
after the Borrower/Parent becomes aware of any deviations from the Y2K Plan
which would cause compliance with the Y2K Plan to be materially delayed or not
achieved, a statement of the Chief Executive Officer, Chief Financial Officer,
or Chief Technology Officer setting forth the details thereof and the action
which the Borrower/Parent is taking or proposes to take with respect thereto;
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(j) prior to January 1, 2000, promptly upon the receipt
thereof, a copy of any third party assessments of the Borrower/Parent's Y2K Plan
together with any recommendations made by such third party with respect to Year
2000 compliance;
(k) within 60 days after the end of each Fiscal Quarter, and
more frequently, at the election of the Borrower, a Borrowing Base Certificate
as of the last day of the Fiscal Quarter just ended; provided, however, that so
long as the Syndicated Revolving Credit Agreement is in effect and the Borrower
furnishes to the Bank a Borrowing Base Certificate pursuant to and in accordance
with Section 5.01(k) thereof, no Borrowing Base Certificate need be furnished
pursuant to this Agreement;
(l) simultaneously with the delivery of each set of financial
statements referred to in paragraphs (a) and (b) above, operating statements for
each Eligible Property for the period covered by such financial statements; and
(m) from time to time such additional information regarding
the financial position or business of the Borrower/Parent and its Subsidiaries
as the Bank may reasonably request.
SECTION 5.02. INSPECTION OF PROPERTY, BOOKS AND RECORDS.
The Borrower and the Parent will (i) keep, and cause each
Subsidiary to keep, proper books of record and account in which full, true and
correct entries in conformity with GAAP shall be made of all dealings and
transactions in relation to its business and activities; and (ii) permit, and
cause each Subsidiary to permit, representatives of any Bank at such Bank's
expense prior to the occurrence of a Default and at the Borrower's expense after
the occurrence of a Default to visit and inspect any of their respective
properties, to examine and make abstracts from any of their respective books and
records and to discuss their respective affairs, finances and accounts with
their respective officers, employees and independent public accountants. The
Borrower and the Parent agree to cooperate and assist in such visits and
inspections, in each case at such reasonable times and as often as may
reasonably be desired, except that, prior to the occurrence of a Default, such
visits and inspections shall not occur more than once in any Fiscal Quarter.
SECTION 5.03. MAINTENANCE OF EXISTENCE.
Except as otherwise permitted herein, the Borrower and the
Parent shall, and shall cause each Subsidiary to, maintain its corporate
existence and carry on its business in substantially the same manner and in
substantially the same fields as such business is now carried on and maintained.
SECTION 5.04. DISSOLUTION.
Neither the Borrower, the Parent nor any of the Subsidiaries
shall suffer or permit dissolution or liquidation either in whole or in part or
redeem or retire any shares of its own stock
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or that of any Subsidiary, except through corporate reorganization to the extent
permitted by Section 5.05.
SECTION 5.05. CONSOLIDATIONS, MERGERS AND SALES OF ASSETS.
The Borrower and the Parent will not, nor will they permit any
Subsidiary to, consolidate or merge with or into, or sell, lease or otherwise
transfer all or any substantial part of its assets to, any other Person, or
discontinue or eliminate any business line or segment, provided that (a) the Top
Level Reorganization may be consummated, subject to satisfaction of the Top
Level Reorganization Conditions, and the Borrower may merge with another Person
if (i) such Person was organized under the laws of the United States of America
or one of its states, (ii) the Borrower is the corporation surviving such merger
and (iii) immediately after giving effect to such merger, no Default shall have
occurred and be continuing, (b) Subsidiaries of the Borrower/Parent may merge
with one another, and with the Borrower (c) Subsidiaries of the Borrower/Parent
may merge with any other Person, so long as (i) such Person was organized under
the laws of the United States of America or one of its states (ii) such Person
shall become a Subsidiary immediately upon consummation of such merger (and if
the merging Subsidiary was a Guarantor and is not the corporation surviving such
merger, such Person shall comply with Section 5.27) and (iii) immediately after
giving effect to such merger, no Default shall have occurred and be continuing,
and (d) the foregoing limitation on the sale, lease or other transfer of assets
and on the discontinuation or elimination of a business line or segment shall
not prohibit, (A) sales, leases or transfers of assets between Guarantors or
between any Guarantor and the Borrower, or transfers pursuant to the Top Level
Reorganization, subject to satisfaction of the Top Level Reorganization
conditions, or (B) during any Fiscal Quarter, a transfer of assets or the
discontinuance or elimination of a business line or segment (in a single
transaction or in a series of related transactions) unless the aggregate assets
to be so transferred or utilized in a business line or segment to be so
discontinued, when combined with all other assets transferred, and all other
assets utilized in all other business lines or segments discontinued, during
such Fiscal Quarter and the immediately preceding 3 Fiscal Quarters, either (x)
constituted more than 15% of Consolidated Total Assets at the end of the most
recent Fiscal Year immediately preceding such Fiscal Quarter, or (y) contributed
more than 15% of Consolidated Operating Profits during the 4 Fiscal Quarters
immediately preceding such Fiscal Quarter.
In the case of any Subsidiary which transfers all or a substantial part of its
assets pursuant to clause (c) of the preceding sentence, and in the case of any
Subsidiary the stock or other ownership interests in which are being sold and
with respect to which clause (c) would have been satisfied if the transaction
had been a sale of assets of such Subsidiary, such Subsidiary shall be released
from its obligations under the Guaranty (if it has become a party thereto) and,
in the case of a transaction involving a sale of assets, such Subsidiary may
dissolve.
SECTION 5.06. USE OF PROCEEDS.
Proceeds of the Revolving Loans may be used for construction
financing, acquisitions and general working capital purposes; provided, that no
portion of the proceeds of the Revolving Loans will be used by the
Borrower/Parent or any Subsidiary (i) in connection
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with, whether directly or indirectly, any tender offer for, or other acquisition
of, stock of any corporation with a view towards obtaining control of such other
corporation, unless such tender offer or other acquisition is to be made on a
negotiated basis with the approval of the Board of Directors of the Person to be
acquired, and the provisions of Section 5.16 would not be violated, (ii)
directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of purchasing or carrying any Margin Stock in violation of Regulations
T, U or X, or (iii) for any purpose in violation of any applicable law or
regulation.
SECTION 5.07. COMPLIANCE WITH LAWS; PAYMENT OF TAXES.
The Borrower and the Parent will, and will cause each of the
Subsidiaries and each member of the Controlled Group to, comply with applicable
laws (including but not limited to ERISA), regulations and similar requirements
of governmental authorities (including but not limited to PBGC), except where
the necessity of such compliance is being contested in good faith through
appropriate proceedings diligently pursued and except where noncompliance with
any such applicable laws, regulations and similar requirements could not
reasonably be expected to result in a Material Adverse Effect. The Borrower and
the Parent will, and will cause each of the Subsidiaries to, pay promptly when
due all taxes, assessments, governmental charges, claims for labor, supplies,
rent and other obligations which, if unpaid, might become a lien against the
property of the Borrower, the Parent or any Subsidiary, except liabilities being
contested in good faith and against which, if requested by the Bank, the
Borrower/Parent will set up reserves in accordance with GAAP.
SECTION 5.08. INSURANCE.
The Borrower and the Parent will maintain, and will cause each
of the Subsidiaries to maintain (either in the name of the Borrower, the Parent
or in such Subsidiary's own name), with financially sound and reputable
insurance companies, insurance on all its property in at least such amounts and
against at least such risks (including on all its property, and public liability
and worker's compensation) as are usually insured against in the same general
area by companies of established repute engaged in the same or similar business.
SECTION 5.09. CHANGE IN FISCAL YEAR.
The Borrower/Parent will not change its Fiscal Year without
the consent of the Bank.
SECTION 5.10. MAINTENANCE OF PROPERTY.
Except as permitted hereunder, the Borrower and the Parent
shall, and shall cause each Subsidiary to, maintain all of its properties and
assets in good condition, repair and working order, ordinary wear and tear,
casualty and condemnation excepted.
SECTION 5.11. ENVIRONMENTAL NOTICES.
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Except to the extent which would not reasonably be expected to
cause a Material Adverse Effect, the Borrower and the Parent shall furnish to
the Bank prompt written notice of all Environmental Liabilities, pending or
threatened Environmental Proceedings, Environmental Notices, Environmental
Judgments and Orders, and Environmental Releases at, on, in, under or in any way
affecting the Properties, and all facts, events, or conditions that could
reasonably be expected to lead to any of the foregoing.
SECTION 5.12. ENVIRONMENTAL MATTERS.
The Borrower, the Parent and the Subsidiaries will not, and
will not permit any Third Party to, use, produce, manufacture, process, treat,
recycle, generate, store, dispose of, manage at, or otherwise handle, or ship or
transport to or from the Properties any Hazardous Materials except for Hazardous
Materials such as cleaning solvents, pesticides and other similar materials
used, produced, manufactured, processed, treated, recycled, generated, stored,
disposed, managed, or otherwise handled in the ordinary course of business in
compliance with all applicable Environmental Requirements.
SECTION 5.13. ENVIRONMENTAL RELEASE.
The Borrower and the Parent agree that upon the occurrence of
an Environmental Release at or on any of the Properties it will comply with all
applicable Environmental Requirements to investigate the extent of, and to take
appropriate remedial action to eliminate, such Environmental Release, whether or
not ordered or otherwise directed to do so by any Environmental Authority.
SECTION 5.14. TRANSACTIONS WITH AFFILIATES.
Neither the Borrower, the Parent nor any of the Subsidiaries
shall enter into, or be a party to, any transaction with any Affiliate of the
Borrower or such Subsidiary (which Affiliate is not the Borrower, the Parent or
a Wholly Owned Subsidiary), except as permitted by law and in the ordinary
course of business and pursuant to reasonable terms which are no less favorable
to Borrower or such Subsidiary than would be obtained in a comparable arm's
length transaction with a Person which is not an Affiliate.
SECTION 5.15. RESTRICTED PAYMENTS.
The Borrower's/Parent's Restricted Payments in any calendar
year shall not exceed (i) as to purchases of Capital Stock in connection with
any Stock Buyback Plan, acquisition of shares in any 12 month period in excess
of 10% of all of the Borrower/Parent's Capital Stock outstanding at the
beginning of such period, and (ii) as to other Restricted Payments, 95% of Funds
From Operations for such period.
SECTION 5.16. INVESTMENTS.
Neither the Borrower, the Parent nor any of the Subsidiaries
shall make Investments in any Person except (i) loans or advances to employees
not exceeding $10,000,000
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in the aggregate principal amount outstanding at any time, in each case made in
the ordinary course of business and consistent with practices existing on
December 31, 1998; (ii) deposits required by government agencies or public
utilities, (ii) Investments in direct obligations of the United States
Government maturing within one year, (iii) Investments in certificates of
deposit issued by a commercial bank whose credit is satisfactory to the Bank,
(iv) Investments in commercial paper rated A1 or the equivalent thereof by S&P
or P1 or the equivalent thereof by Moody's and in either case maturing within 6
months after the date of acquisition, (v) Investments in tender bonds the
payment of the principal of and interest on which is fully supported by a letter
of credit issued by a United States bank whose long-term certificates of deposit
are rated at least AA or the equivalent thereof by S&P and Aa or the equivalent
thereof by Moody's, (vi) Investments existing on the Closing Date, (vii)
Investments in Guarantors (or in any Person which, upon the making of such
Investment, becomes a Guarantor pursuant to Section 5.27) and (viii) other
Investments which do not at any time exceed an aggregate amount outstanding
equal to (1) at any time during which the Borrower's Debt Rating is both BBB or
better by S&P and Baa2 or better by Moody's 20% of Consolidated Total Assets,
and (2) at any other time, 15% of Consolidated Total Assets; provided, however,
immediately after giving effect to the making of any Investment, no Default
shall have occurred and be continuing.
SECTION 5.17. LIENS.
Neither the Borrower, the Parent nor any Consolidated
Subsidiary will create, assume or suffer to exist any Lien on any asset now
owned or hereafter acquired by it, except:
(a) Subject to Section 5.21, Liens existing on the date of
this Agreement securing Debt outstanding on the date of this Agreement
in an aggregate principal amount not exceeding $127,000,000;
(b) Subject to Section 5.21, any Lien existing on any specific
fixed asset of any Person at the time such Person becomes a
Consolidated Subsidiary and not created in contemplation of such event;
(c) Subject to Section 5.21, any Lien on any specific fixed
asset securing Debt incurred or assumed for the purpose of financing
all or any part of the cost of acquiring or constructing such asset,
provided that such Lien attaches to such asset concurrently with or
within 18 months after the acquisition or completion of construction
thereof;
(d) Subject to Section 5.21, any Lien on any specific fixed
asset of any corporation existing at the time such corporation is
merged or consolidated with or into the Borrower, the Parent or a
Consolidated Subsidiary and not created in contemplation of such event;
(e) Subject to Section 5.21, any Lien existing on any specific
fixed asset prior to the acquisition thereof by the Borrower, the
Parent or a Consolidated Subsidiary and not created in contemplation of
such acquisition;
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(f) Liens securing Debt owing by any Subsidiary to the
Borrower or the Parent;
(g) any Lien arising out of the refinancing, extension,
renewal or refunding of any Debt secured by any Lien permitted by any
of the foregoing paragraphs of this Section, provided that (i) such
Debt is not secured by any additional assets, and (ii) the amount of
such Debt secured by any such Lien is not increased;
(h) Liens incidental to the conduct of its business or the
ownership of its assets which (i) do not secure Debt and (ii) do not in
the aggregate materially detract from the value of its assets or
materially impair the use thereof in the operation of its business;
(i) any Lien on Margin Stock; and
(j) Liens not otherwise permitted by the foregoing paragraphs
of this Section securing Debt (other than indebtedness represented by
the Revolving Loan Note), but permitted by Section 5.21.
SECTION 5.18. RESTRICTIONS ON ABILITY OF SUBSIDIARIES TO PAY
DIVIDENDS.
The Borrower and the Parent shall not permit any Subsidiary
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any encumbrance or restriction on the ability of any such
Subsidiary to (i) pay any Dividends or make any other distributions on its
Capital Stock or any other interest or (ii) make or repay any loans or advances
to the Borrower, the Parent or other parent of such Subsidiary.
SECTION 5.19. ADDITIONAL DEBT.
Neither the Borrower, the Parent nor any Subsidiary will
create, incur, assume or suffer to exist any Debt except (i) Debt in existence
on the Closing Date; (ii) Debt of any Guarantor to the Borrower or to any other
Guarantor, (iii) other unsecured revolving credit in an aggregate outstanding
principal amount not at any time exceeding $15,000,000, (iv) publicly held debt
having a maturity later than the Termination Date, and (v) other Debt which is
privately held and which does not constitute revolving credit (including Debt
included in Consolidated Total Secured Debt, so long as it is not revolving
credit, and subject to the provisions of Sections 5.17 and 5.21).
SECTION 5.20. RATIO OF CONSOLIDATED TOTAL LIABILITIES TO
CONSOLIDATED TOTAL ASSET VALUE.
The ratio of Consolidated Total Liabilities to Consolidated
Total Asset Value shall at all times be equal to or less than 0.55 to 1.0.
SECTION 5.21. RATIO OF CONSOLIDATED TOTAL SECURED DEBT TO
CONSOLIDATED TOTAL ASSET VALUE.
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The ratio of Consolidated Total Secured Debt to Consolidated
Total Asset Value shall at all times be equal to or less than 0.35 to 1.00.
SECTION 5.22. RATIO OF CONSOLIDATED EBITDA TO CONSOLIDATED
INTEREST EXPENSE.
The ratio of Consolidated EBITDA to Consolidated Interest
Expense actually incurred for the Fiscal Quarter just ended will not be less
than 2.0 to 1.0.
SECTION 5.23. RATIO OF CONSOLIDATED UNENCUMBERED REAL ESTATE
ASSETS TO CONSOLIDATED UNSECURED SENIOR DEBT.
The ratio of Consolidated Unencumbered Real Estate Assets to
Consolidated Unsecured Senior Debt shall at all times be greater than 1.65 to
1.00.
SECTION 5.24. RATIO OF CONSOLIDATED UNENCUMBERED NET OPERATING
INCOME TO CONSOLIDATED UNSECURED INTEREST EXPENSE.
The ratio of Consolidated Unencumbered Net Operating Income to
Consolidated Unsecured Interest Expense shall at all times be greater than 2.0
to 1.00.
SECTION 5.25. RATIO OF CONSOLIDATED EBITDA TO CONSOLIDATED
FIXED CHARGES.
The ratio of Consolidated EBITDA to Consolidated Fixed
Charges, in each case for the Fiscal Quarter just ended and the 3 immediately
preceding Fiscal Quarters, shall at all times exceed 1.5 to 1.00.
SECTION 5.26. Y2K COMPLIANCE.
The Borrower/Parent will meet the milestones contained in the
Y2K Plan and will have all hardware and software systems Year 2000 Compliant and
Ready (including all internal and external testing) on or before December 1,
1999.
SECTION 5.27. SIGNIFICANT SUBSIDIARIES TO BE GUARANTORS;
ELECTION TO BECOME GUARANTOR.
Any Subsidiary (whether existing on the Closing Date or
acquired or created thereafter), subject to Section 5.28, as to IRT Partners
L.P. (i) must become a Guarantor promptly upon becoming a Significant
Subsidiary, and (ii) may elect to become a Guarantor at any time if it is not a
Significant Subsidiary, in each case by (x) executing and delivering to the Bank
a counterpart of the Guaranty and a counterpart of the Contribution Agreement,
thereby becoming a party to each of them, (y) delivering to the Bank an opinion
of counsel to such Subsidiary, in form and substance satisfactory to the Bank in
its reasonable discretion, the form attached hereto as Exhibit B (being one such
satisfactory form, but limited to such Subsidiary, and making appropriate
modifications, and (z) delivering to the Bank documents pertaining to
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the Subsidiary reasonably requested by the Bank of the types described in
paragraph (f) of Section 3.01 (but making appropriate modifications).
SECTION. 5.28. TOP LEVEL REORGANIZATION.
The Borrower currently anticipates accomplishing a corporate
reorganization at the top level of the corporate structure. Pursuant to such
reorganization, the following steps would be accomplished: (1) a new corporation
("Newco") would be created, which initially would be, directly or indirectly,
wholly owned by IRT Property Company, and to which IRT Property Company would
transfer all of its 1% general partnership interest in IRT Partners L.P.; (2)
IRT Property Company would be merged into IRT Partners L.P. through one or a
series of mergers, with IRT Partners L.P. being the surviving entity, (3) the
name of Newco would be changed to "IRT Property Company" (from and after the
consummation of the Top Level Reorganization, as defined below, Newco is
referred to as the "Parent" for all purposes under the Credit Agreement and the
other Loan Documents), and (4) the capital stock of the Parent would be or would
be deemed to be exchanged for the capital stock of IRT Property Company, so
that, after giving effect to the foregoing steps (the completion of all such
steps being the "Top Level Reorganization"), the Parent would be a public
company which would be a holding company and own, directly or indirectly, in
excess of 90% of the capital stock of IRT Partners L.P., which would become a
Subsidiary. The Bank hereby consents to the Top Level Reorganization and the
transfers and other transactions contemplated thereby, so long as each of the
following conditions is satisfied (collectively, the "Top Level Reorganization
Conditions"):
(i) IRT Partners L.P., as the surviving entity of the
merger, shall become the "Borrower" for all purposes hereunder, and
shall execute and deliver to the Bank, (x) a Joinder Agreement in
substantially the form attached hereto as Exhibit I, thereby obtaining
all of the rights and assuming all of the obligations of the "Borrower"
hereunder and under the Revolving Loan Note, the FMA Agreement and the
other Loan Documents (other than the Guaranty), (ii) a new Revolving
Loan Note, which new Revolving Loan Note will be exchanged for the
original Revolving Loan Note, which shall be surrendered for
cancellation;
(ii) IRT Partners L.P. shall be released from the Guaranty,
and shall no longer be a Guarantor (but shall remain a party to the
Contribution Agreement);
(iii) The Parent shall execute a counterpart of the Guaranty
and the Contribution Agreement, and shall become a joint and several
Guarantor for all purposes hereunder and under the Guaranty;
(iv) IRT Partners L.P. and the Parent shall deliver to the
Bank documents of the types described in Section 3.01(f) and an opinion
of counsel similar to Exhibit B, but in each case pertaining and
referring to such Joinder Agreement and the Revolving Loan Note and the
other Loan Documents (and the binding effect of this Agreement and the
Revolving Loan Note as a result thereof), as to IRT Partners L.P., and
the Guaranty (including, without limitation the representations and
warranties of the Parent contained
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in Articles IV and V hereof, which are incorporated in the Guaranty),
as to the Parent; and
(v) The Top Level Reorganization and each of the conditions
set forth in clauses (i) through (iv) above shall have been completed
and consummated on or before 15 months after the Closing Date, at a
time when no Default or Event of Default is in existence.
ARTICLE VI.
DEFAULTS
SECTION 6.01. EVENTS OF DEFAULT.
If one or more of the following events ("Events of Default")
shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal of
any Revolving Loan or shall fail to pay any interest on any Revolving
Loan within 5 Domestic Business Days after such interest shall become
due, or shall fail to pay any fee or other amount payable hereunder
within 5 Domestic Business Days after such fee or other amount becomes
due; or
(b) the Borrower or the Parent shall fail to observe or
perform any covenant contained in Sections 5.01(e), 5.01(i), 5.01(j),
5.02(ii), 5.03 through 5.06, inclusive, Section 5.09, Sections 5.15 or
5.16, or Sections 5.18 through 5.27, inclusive; or
(c) the Borrower or any Guarantor shall fail to observe or
perform any covenant or agreement contained or incorporated by
reference in this Agreement (other than those covered by paragraph (a)
or (b) above) or the Guaranty and such failure shall not have been
cured within 30 days after the earlier to occur of (i) written notice
thereof has been given to the Borrower by the Bank or (ii) an Executive
Officer of the Borrower otherwise obtains actual knowledge of any such
failure; or
(d) any representation, warranty, certification or statement
made by the Borrower or any Guarantor in Article IV of this Agreement
or in any certificate, financial statement or other document delivered
pursuant to this Agreement shall prove to have been incorrect or
misleading in any material respect when made (or deemed made); or
(e) the Borrower, the Parent or any Subsidiary shall fail to
make any payment in respect of Debt outstanding (other than the
Revolving Loan Notes) in an individual principal amount of $5,000,000
or more or in an aggregate principal amount of $10,000,000 or more when
due or within any applicable grace period; or
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(f) any event or condition shall occur which results in the
acceleration of the maturity of Debt outstanding of the Borrower, the
Parent or any Subsidiary (including, without limitation, any required
mandatory prepayment or "put" of such Debt to the Borrower or any
Subsidiary) in an individual principal amount of $5,000,000 or more or
in an aggregate principal amount of $10,000,000 or more, or enables
(or, with the giving of notice or lapse of time or both, would enable)
the holders of such Debt or commitment or any Person acting on such
holders' behalf to accelerate the maturity thereof or terminate any
such commitment (including, without limitation, any required mandatory
prepayment or "put" of such Debt to the Borrower, the Parent or any
Subsidiary); or
(g) the Borrower, the Parent or any Subsidiary shall commence
a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar law now or hereafter
in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief
or to the appointment of or taking possession by any such official in
an involuntary case or other proceeding commenced against it, or shall
make a general assignment for the benefit of creditors, or shall fail
generally, or shall admit in writing its inability, to pay its debts as
they become due, or shall take any corporate action to authorize any of
the foregoing; or
(h) an involuntary case or other proceeding shall be commenced
against the Borrower, the Parent or any Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under
any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of
its property, and such involuntary case or other proceeding shall
remain undismissed and unstayed for a period of 60 days; or an order
for relief shall be entered against the Borrower, the Parent or any
Subsidiary under the federal bankruptcy laws as now or hereafter in
effect; or
(i) the Borrower/Parent or any member of the Controlled Group
shall fail to pay when due any material amount which it shall have
become liable to pay to the PBGC or to a Plan under Title IV of ERISA;
or notice of intent to terminate a Plan or Plans shall be filed under
Title IV of ERISA by the Borrower/Parent, any member of the Controlled
Group, any plan administrator or any combination of the foregoing; or
the PBGC shall institute proceedings under Title IV of ERISA to
terminate or to cause a trustee to be appointed to administer any such
Plan or Plans or a proceeding shall be instituted by a fiduciary of any
such Plan or Plans to enforce Section 515 or 4219(c)(5) of ERISA and
such proceeding shall not have been dismissed within 30 days
thereafter; or a condition shall exist by reason of which the PBGC
would be entitled to obtain a decree adjudicating that any such Plan or
Plans must be terminated; or the Borrower/Parent or any other member of
the Controlled Group shall enter into, contribute or be obligated to
contribute to, terminate or incur any withdrawal liability with respect
to, a Multiemployer Plan; or
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(j) one or more judgments or orders for the payment of money
in an aggregate amount in excess of $5,000,000 shall be rendered
against the Borrower, the Parent or any Subsidiary and such judgment or
order shall continue unsatisfied and unstayed for a period of 30 days;
or
(k) a federal tax lien shall be filed against the Borrower,
the Parent or any Subsidiary under Section 6323 of the Code or a lien
of the PBGC shall be filed against the Borrower or any Subsidiary under
Section 4068 of ERISA and in either case such lien shall remain
undischarged for a period of 25 days after the date of filing; or
(l) (i) any Person or two or more Persons acting in concert
shall have acquired beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange \Commission under the Securities
Exchange Act of 1934) of [20%] or more of the outstanding shares of the
voting stock of the Borrower; or (ii) as of any date a majority of the
Board of Directors of the Borrower/Parent consists of individuals who
were not either (A) directors of the Borrower/Parent as of the
corresponding date of the previous year, (B) selected or nominated to
become directors by the Board of Directors of the Borrower/Parent of
which a majority consisted of individuals described in clause (A), or
(C) selected or nominated to become directors by the Board of Directors
of the Borrower/Parent of which a majority consisted of individuals
described in clause (A) and individuals described in clause (B); or
(m) the occurrence of any event, act, occurrence, or condition
which the Bank determines either does or has a reasonable probability
of causing a Material Adverse Effect.
then, and in every such event, (i) the Bank may, by notice to
the Borrower terminate the Revolving Loan Commitment and it shall thereupon
terminate, and (ii) the Bank may, by notice to the Borrower declare the
Revolving Loan Note (together with accrued interest thereon), and all other
amounts payable hereunder and under the other Loan Documents, to be, and the
Revolving Loan Note (together with accrued interest thereon), and all other
amounts payable hereunder and under the other Loan Documents shall thereupon
become, immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower
together with interest at the Default Rate accruing on the principal amount
thereof from and after the date of such Event of Default; provided that if any
Event of Default specified in paragraph (g) or (h) above occurs with respect to
the Borrower, without any notice to the Borrower or any other act by the Bank,
the Revolving Loan Commitment shall thereupon terminate and the Revolving Loan
Note (together with accrued interest thereon) and all other amounts payable
hereunder and under the other Loan Documents shall automatically and without
notice become immediately due and payable without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Borrower
together with interest thereon at the Default Rate accruing on the principal
amount thereof from and after the date of such Event of Default. Notwithstanding
the foregoing, the Bank shall have available to it all other remedies at law or
equity.
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ARTICLE VII.
CHANGE IN CIRCUMSTANCES; COMPENSATION
SECTION 7.01. BASIS FOR DETERMINING INTEREST RATE INADEQUATE
OR UNFAIR.
If on or prior to the first day of any Interest Period:
(a) the Bank reasonably determines that deposits in Dollars
(in the applicable amounts) are not being offered in the relevant
market for such Interest Period, or
(b) the Bank reasonably determines that the London Interbank
Offered Rate as determined by the Bank will not adequately and fairly
reflect the cost to it of funding the Euro-Dollar Loans for such
Interest Period,
the Bank shall forthwith give notice thereof to the Borrower, whereupon until
the Bank notifies the Borrower that the circumstances giving rise to such
suspension no longer exist, the obligations of the Bank to make Euro-Dollar
Loans specified in such notice shall be suspended. Unless the Borrower notifies
the Bank at least 2 Domestic Business Days before the date of any Borrowing of
such Euro-Dollar Loans for which a Notice of Borrowing has previously been given
that it elects not to borrow on such date, such Borrowing shall instead be made
as a Base Rate Borrowing.
SECTION 7.02. ILLEGALITY.
If, after the date hereof, the adoption of any applicable law,
rule or regulation, or any change therein or any existing or future law, rule or
regulation, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof (any such agency being referred to as
an "Authority" and any such event being referred to as a "Change of Law"), or
compliance by the Bank (or its Lending Office) with any request or directive
(whether or not having the force of law) of any Authority shall make it unlawful
or impossible for any Bank (or its Lending Office) to make, maintain or fund its
Euro-Dollar Loans and such Bank shall so notify the Bank, the Bank shall
forthwith give notice thereof to the Borrower, whereupon until the Bank notifies
the Borrower that the circumstances giving rise to such suspension no longer
exist, the obligation of the Bank to make Euro-Dollar Loans shall be suspended.
Before giving any notice to the Borrower pursuant to this Section, the 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 the Bank, be
otherwise disadvantageous to the Bank. If the Bank shall determine that it may
not lawfully continue to maintain and fund any of its outstanding Euro-Dollar
Loans to maturity and shall so specify in such notice, the Borrower shall
immediately prepay in full the then outstanding principal amount of each
Euro-Dollar Loan, together with accrued interest thereon and any amount due such
Bank pursuant to Section 7.05(a). Concurrently with prepaying each such
Euro-Dollar Loan, the Borrower shall borrow a Base Rate Loan in an equal
principal amount from the Bank, and the Bank shall make such a Base Rate Loan.
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SECTION 7.03. INCREASED COST AND REDUCED RETURN.
(a) If after the date hereof, a Change of Law or compliance
by the Bank (or its Lending Office) with any request or directive (whether or
not having the force of law) of any Authority:
(i) shall impose, modify or deem applicable any
reserve, special deposit or similar requirement (including, without
limitation, any such requirement imposed by the Board of Governors of
the Federal Reserve System, but excluding with respect to any
Euro-Dollar Loan any such requirement included in an applicable
Euro-Dollar Reserve Percentage) against assets of, deposits with or for
the account of, or credit extended by, the Bank (or its Lending
Office); or
(ii) shall impose on the Bank (or its Lending Office)
or on the United States market for certificates of deposit or the
London interbank market any other condition affecting its Euro-Dollar
Loans, its Revolving Loan Note or its obligation to make Euro-Dollar
Rate Loans;
and the result of any of the foregoing is to increase the cost to the Bank (or
its Lending Office) of making or maintaining any Revolving Loan, or to reduce
the amount of any sum received or receivable by the Bank (or its Lending Office)
under this Agreement or under its Revolving Loan Note with respect thereto, by
an amount reasonably deemed by the Bank to be material, then, within 15 days
after demand by the Bank, the Borrower shall pay to the Bank such additional
amount or amounts as will compensate the Bank for such increased cost or
reduction.
(b) If the Bank shall have determined that after the date
hereof the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof, or compliance by the Bank (or its Lending Office) with
any request or directive regarding capital adequacy (whether or not having the
force of law) of any Authority, has or would have the effect of reducing the
rate of return on the Bank's capital as a consequence of its obligations
hereunder to a level below that which the Bank could have achieved but for such
adoption, change or compliance (taking into consideration the Bank's policies
with respect to capital adequacy) by an amount reasonably deemed by the Bank to
be material, then from time to time, within 15 days after demand by the Bank,
the Borrower shall pay to the Bank such additional amount or amounts as will
compensate the Bank for such reduction.
(c) The Bank will promptly notify the Borrower of any event
of which it has knowledge, occurring after the date hereof, which will entitle
the Bank to compensation pursuant to this Section 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 judgment of the Bank, be otherwise
disadvantageous to the Bank. A certificate of the Bank claiming compensation
under this Section and setting forth the additional amount or amounts to be paid
to it hereunder shall be conclusive in the absence of manifest error; provided,
however, that the liability of the Borrower to provide compensation to the Bank
hereunder shall be limited to amounts incurred
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within 90 days prior to such certification. In determining such amount, the
Bank may use any reasonable averaging and attribution methods.
SECTION 7.04. BASE RATE LOANS SUBSTITUTED FOR EURO-DOLLAR
LOANS.
If (i) the obligation of the Bank to make or maintain any Euro-Dollar Loans has
been suspended pursuant to Section 7.02 or (ii) the Bank has demanded
compensation under Section 7.03, and the Borrower shall, by at least 5
Euro-Dollar Business Days' prior notice to the Bank, have elected that the
provisions of this Section shall apply to the Bank, then, unless and until the
Bank notifies the Borrower that the circumstances giving rise to such suspension
or demand for compensation no longer apply:
(a) all Revolving Loans which would otherwise be made by the
Bank as Euro-Dollar Loans shall be made instead as Base Rate Loans, and
(b) after each of its Euro-Dollar Loans has been repaid, all
payments of principal which would otherwise be applied to repay such Euro-Dollar
Loans shall be applied to repay its Base Rate Loans instead.
ARTICLE VIII.
MISCELLANEOUS
SECTION 8.01. NOTICES.
All notices, requests and other communications to any party
hereunder shall be in writing (including telecopier or similar writing) and
shall be given to such party at its address or telecopier number set forth on
the signature pages hereof or such other address or telecopier number as such
party may hereafter specify for the purpose by notice to each other party. Each
such notice, request or other communication shall be effective (i) if given by
telecopier, when such telecopy is transmitted to the telecopier number specified
in this Section and the confirmation is received, (ii) if given by mail, 72
hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or (iii) if given by any other means,
when delivered at the address specified in this Section.
SECTION 8.02. NO WAIVERS.
No failure or delay by the Bank in exercising any right, power
or privilege hereunder or under the Revolving Loan Note or other Loan Document
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.
SECTION 8.03. EXPENSES; DOCUMENTARY TAXES.
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The Borrower shall pay (i) all out-of-pocket expenses of the
Bank, including reasonable fees and disbursements of special counsel for the
Bank actually incurred, in connection with the preparation of this Agreement and
the other Loan Documents, any waiver or consent hereunder or thereunder or any
amendment hereof or thereof or any Default or alleged Default hereunder or
thereunder and (ii) if a Default occurs, all out-of-pocket expenses incurred by
the Bank, including reasonable fees and disbursements of counsel actually
incurred, in connection with such Default and collection and other enforcement
proceedings resulting therefrom, including out-of-pocket expenses incurred in
enforcing this Agreement and the other Loan Documents. The Borrower shall
indemnify the Bank against any transfer taxes, documentary taxes, assessments or
charges made by any Authority by reason of the execution and delivery of this
Agreement or the other Loan Documents.
SECTION 8.04. INDEMNIFICATION.
The Borrower shall indemnify the the Bank and each Affiliate
thereof and their respective directors, officers, employees and agents from, and
hold each of them harmless against, any and all losses, liabilities, claims or
damages to which any of them may become subject, insofar as such losses,
liabilities, claims or damages arise out of or result from any actual or
proposed use by the Borrower of the proceeds of any extension of credit by the
Bank hereunder or breach by the Borrower of this Agreement or any other Loan
Document or from any investigation, litigation (including, without limitation,
any actions taken by the Bank to enforce this Agreement or any of the other Loan
Documents) or other proceeding (including, without limitation, any threatened
investigation or proceeding) relating to the foregoing, and the Borrower shall
reimburse the Bank and each Affiliate thereof and their respective directors,
officers, employees and agents, upon demand for any expenses (including, without
limitation, legal fees) incurred in connection with any such investigation or
proceeding; but excluding any such losses, liabilities, claims, damages or
expenses (i) incurred by reason of the gross negligence or willful misconduct of
the Person to be indemnified or (ii) to the extent they are determined by final
judgment of a court of competent jurisdiction to have resulted from a breach of
contract by such Person seeking indemnification with respect to the Loan
Documents.
SECTION 8.05. SETOFF; SHARING OF SETOFFS.
(a) The Borrower hereby authorizes the Bank, upon the occurrence and
during the continuance of an Event of Default, at any time or times with or
without prior notice to apply any balances in the Borrower's deposit accounts of
any kind, or any interest in any deposits or deposit accounts thereof, held by
the Bank for the account or benefit of the Borrower and including any balance of
any deposit account or of any credit of the Borrower with the Bank, whether now
existing or hereafter established to such of the indebtedness and obligations
owing by the Borrower to the Bank then past due and in such amounts as they may
elect, and whether or not the collateral, if any, or the responsibility of other
Persons primarily, secondarily or otherwise liable may be deemed adequate. The
Bank agrees to promptly notify the Borrower after any such set-off or
application. For the purposes of this paragraph, all remittances and property
shall be deemed to be in the possession of the Bank as soon as the same may be
put in transit to it by mail or carrier or by other bailee.
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(b) The Borrower agrees, to the fullest extent it may
effectively do so under applicable law, that any holder of a participation in
the Revolving Loan Note, whether or not acquired pursuant to the foregoing
arrangements, may exercise rights of setoff or counterclaim and other rights
with respect to such participation as fully as if such holder of a participation
were a direct creditor of the Borrower in the amount of such participation. Any
such setoff shall be shared pro rata among the Bank and all of the Participants.
SECTION 8.06. AMENDMENTS AND WAIVERS.
Any provision of this Agreement, the Revolving Loan Note or
any other Loan Documents may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by the Borrower and the Bank.
SECTION 8.07. NO MARGIN STOCK COLLATERAL.
The Bank acknowledges that it in good faith is not, directly or indirectly (by
negative pledge or otherwise), relying upon any Margin Stock as collateral in
the extension or maintenance of the credit provided for in this Agreement.
SECTION 8.08. SUCCESSORS AND ASSIGNS.
(a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns; provided that the Borrower may not assign or otherwise transfer any of
its rights under this Agreement.
(b) The Bank may at any time sell to one or more Persons (each
a "Participant") participating interests in any Revolving Loan owing to the
Bank, its Revolving Loan Note or any other interest of the Bank hereunder. In
the event of any such sale by the Bank of a participating interest to a
Participant, the Bank's obligations under this Agreement shall remain unchanged,
the Bank shall remain solely responsible for the performance thereof, the Bank
shall remain the holder of its Revolving Loan Note for all purposes under this
Agreement, and the Borrower shall continue to deal solely and directly with the
Bank in connection with the Bank's rights and obligations under this Agreement.
In no event shall the Bank that sells a participation be obligated to the
Participant to take or refrain from taking any action hereunder except that the
Bank may agree that it will not (except as provided below), without the consent
of the Participant, agree to (i) the change of any date fixed for the payment of
principal of or interest on the Revolving Loans, (ii) the change of the amount
of any principal, interest or fees due on any date fixed for the payment thereof
with respect to the Revolving Loans, (iii) the change of the principal of the
Revolving Loans, (iv) any change in the rate at which either interest is payable
thereon or (if the Participant is entitled to any part thereof) fee is payable
hereunder from the rate at which the Participant is entitled to receive interest
or fee (as the case may be) in respect of such participation, (v) the release or
substitution of all or any substantial part of the collateral (if any) held as
security for the Revolving Loans, or (vi) the release of any Guarantee given to
support payment of the Revolving Loans. In the event the Bank sells a
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participating interest in the Revolving Loan, the Revolving Loan Note or other
interest under this Agreement, it shall, within 10 Domestic Business Days of
such sale, provide the Borrower with written notification stating that such sale
has occurred and identifying the Participant and the interest purchased by such
Participant. The Borrower agrees that each Participant shall be entitled to the
benefits of Section 7.03, subject to the provisions of Section 8.08(d), with
respect to its participation in Revolving Loans outstanding from time to time,
but without duplication of any amount payable to the Bank.
(c) Subject to the provisions of Section 8.09, the Borrower
authorizes the Bank to disclose to any Participant and any prospective
Participant any and all financial information in the Bank's possession
concerning the Borrower which has been delivered to the Bank by the Borrower
pursuant to this Agreement or which has been delivered to the Bank by the
Borrower in connection with the Bank's credit evaluation prior to entering into
this Agreement.
(d) No Participant shall be entitled to receive any greater
payment under Section 7.03 than the Bank would have been entitled to receive
with respect to the rights transferred, unless such transfer is made with the
Borrower's prior written consent or by reason of the provisions of Section 7.03
requiring the Bank to designate a different Lending Office under certain
circumstances or at a time when the circumstances giving rise to such greater
payment did not exist.
(e) Anything in this Section 8.08 to the contrary
notwithstanding, the Bank may assign and pledge all or any portion of the
Revolving Loans and/or obligations owing to it to any Federal Reserve Bank or
the United States Treasury 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, provided that any payment in respect of
such assigned Revolving Loans and/or obligations made by the Borrower to the
assigning and/or pledging Bank in accordance with the terms of this Agreement
shall satisfy the Borrower's obligations hereunder in respect of such assigned
Revolving Loans and/or obligations to the extent of such payment. No such
assignment shall release the Bank from its obligations hereunder.
SECTION 8.09. CONFIDENTIALITY.
The Bank agrees to exercise commercially reasonable efforts to
keep any information delivered or made available by the Borrower to it which is
clearly indicated to be confidential information, confidential from anyone other
than persons employed or retained by the Bank who are or are expected to become
engaged in evaluating, approving, structuring or administering the Revolving
Loans; provided that nothing herein shall prevent the Bank from disclosing such
information (i) upon the order of any court or administrative agency, (ii) upon
the request or demand of any regulatory agency or authority having jurisdiction
over such Bank, (iii) which has been publicly disclosed, (iv) to the extent
reasonably required in connection with any litigation to which the Bank or any
of its Affiliates may be a party, (v) to the extent reasonably required in
connection with the exercise of any remedy hereunder, (vi) to the Bank's
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legal counsel and independent auditors and (vii) to any actual or proposed
Participant of all or part of its rights hereunder which has agreed in writing
to be bound by the provisions of this Section 8.09; provided that should
disclosure of any such confidential information be required by virtue of clause
(i) of the immediately preceding sentence, to the extent permitted by law, the
Bank shall promptly notify the Borrower of same so as to allow the Borrower to
seek a protective order or to take any other appropriate action; provided,
further, that, the Bank shall not be required to delay compliance with any
directive to disclose any such information so as to allow the Borrower to effect
any such action.
SECTION 8.10. REPRESENTATION BY BANK.
The Bank hereby represents that it is a commercial lender or
financial institution which makes loans in the ordinary course of its business
and that it will make its Revolving Loans hereunder for its own account in the
ordinary course of such business; provided that, subject to Section 8.08, the
disposition of the Revolving Loan Note shall at all times be within its
exclusive control.
SECTION 8.11. CONSEQUENTIAL DAMAGES.
THE BANK SHALL NOT BE RESPONSIBLE OR LIABLE TO THE BORROWER OR
ANY OTHER PERSON OR ENTITY FOR ANY PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES
WHICH MAY BE ALLEGED AS A RESULT OF THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR
ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
SECTION 8.12. GEORGIA LAW.
This Agreement and the Revolving Loan Note shall be construed
in accordance with and governed by the law of the State of Georgia.
SECTION 8.13. SEVERABILITY.
In case any one or more of the provisions contained in this
Agreement, the Revolving Loan Note or any of the other Loan Documents should be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby and shall be enforced to the
greatest extent permitted by law.
SECTION 8.14. INTEREST.
In no event shall the amount of interest, and all charges,
amounts or fees contracted for, charged or collected pursuant to this Agreement,
the Revolving Loan Note or the other Loan Documents and deemed to be interest
under applicable law (collectively, "Interest") exceed the highest rate of
interest allowed by applicable law (the "Maximum Rate"), and in the event any
such payment is inadvertently received by the Bank, then the excess sum (the
"Excess") shall be credited as a payment of principal, unless the Borrower shall
notify the Bank
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in writing that it elects to have the Excess returned forthwith. It is the
express intent hereof that the Borrower not pay and the Bank 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. The right to
accelerate maturity of any of the Revolving Loans does not include the right to
accelerate any interest that has not otherwise accrued on the date of such
acceleration, and the Bank does not intend to collect any unearned interest in
the event of any such acceleration. All monies paid to the Bank hereunder or
under the Revolving Loan Note or the other Loan Documents, whether at maturity
or by prepayment, shall be subject to rebate of unearned interest as and to the
extent required by applicable law. By the execution of this Agreement, the
Borrower covenants, to the fullest extent permitted by law, that (i) the credit
or return of any Excess shall constitute the acceptance by the Borrower of such
Excess, and (ii) the Borrower shall not seek or pursue any other remedy, legal
or equitable, against the Bank, based in whole or in part upon contracting for
charging or receiving any Interest in excess of the Maximum Rate. For the
purpose of determining whether or not any Excess has been contracted for,
charged or received by the Bank, all interest at any time contracted for,
charged or received from the Borrower in connection with this Agreement, the
Revolving Loan Note or any of the other Loan Documents shall, to the extent
permitted by applicable law, be amortized, prorated, allocated and spread in
equal parts throughout the full term of the Revolving Loan Commitment. The
Borrower and the Bank shall, to the maximum extent permitted under applicable
law, (i) characterize any non-principal payment as an expense, fee or premium
rather than as Interest and (ii) exclude voluntary prepayments and the effects
thereof. The provisions of this Section shall be deemed to be incorporated into
the Revolving Loan Note and each of the other Loan Documents (whether or not any
provision of this Section is referred to therein). All such Loan Documents and
communications relating to any Interest owed by the Borrower and all figures set
forth therein shall, for the sole purpose of computing the extent of obligations
hereunder and under the Revolving Loan Note and the other Loan Documents be
automatically recomputed by the Borrower, and by any court considering the same,
to give effect to the adjustments or credits required by this Section.
SECTION 8.15. INTERPRETATION.
No provision of this Agreement or any of the other Loan
Documents shall be construed against or interpreted to the disadvantage of any
party hereto by any court or other governmental or judicial authority by reason
of such party having or being deemed to have structured or dictated such
provision.
SECTION 8.16. WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION.
The Borrower (a) and the Bank irrevocably waives, to the
fullest extent permitted by law, any and all right to trial by jury in any legal
proceeding arising out of this Agreement, any of the other Loan Documents, or
any of the transactions contemplated hereby or thereby, (b) submits to the
nonexclusive personal jurisdiction in the State of Georgia, the courts thereof
and the United States District Courts sitting therein, for the enforcement of
this Agreement, the Revolving Loan Note and the other Loan Documents, (c) waives
any and all personal rights under the law of any jurisdiction to object on any
basis (including, without limitation,
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inconvenience of forum) to jurisdiction or venue within the State of Georgia for
the purpose of litigation to enforce this Agreement, the Revolving Loan Note or
the other Loan Documents, and (d) agrees that service of process may be made
upon it in the manner prescribed in Section 8.01 for the giving of notice to the
Borrower. Nothing herein contained, however, shall prevent the Bank from
bringing any action or exercising any rights against any security and against
the Borrower personally, and against any assets of the Borrower, within any
other state or jurisdiction.
SECTION 8.17. COUNTERPARTS.
This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
SECTION 8.18. SOURCE OF FUNDS -- ERISA.
The Bank hereby represents to the Borrower that no part of the
funds to be used by the Bank to fund the Revolving Loans hereunder from time to
time constitutes (i) assets allocated to any separate account maintained by the
Bank in which any employee benefit plan (or its related trust) has any interest
nor (ii) any other assets of any employee benefit plan. As used in this Section,
the terms "employee benefit plan" and "separate account" shall have the
respective meanings assigned to such terms in Section 3 of ERISA.
SECTION 8.19. APPROVAL OF GUARANTY PROVISIONS
The Bank hereby approves the terms, conditions and provisions
of the Guaranty, and agree to be bound thereby, including, without limitation,
the provisions of Paragraph 10 thereof, providing for the sharing of "Guaranty
Proceeds" with holders of "Existing Senior Obligations" (as those terms are
defined therein) pursuant and subject to the terms of such Paragraph 10.
[Signatures are contained on the following pages.]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, under seal, by their respective authorized
officers as of the day and year first above written.
IRT PROPERTY COMPANY (SEAL)
By: /s/ James G. Levy
----------------------------------------
James G. Levy
Senior Vice President
IRT Property Company
200 Galleria Parkway, Suite 1400
Atlanta, Georgia 30339
Attention: James G. Levy
Telecopier number: 770-988-8773
Confirmation number: 770-955-4406
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WACHOVIA BANK, N.A.,
as the Bank (SEAL)
By: /s/ Cathy Casey
----------------------------------------
Title: SVP
Lending Office
Wachovia Bank, N.A.
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attention: Cathy Casey
Telecopier number: 404-332-4066
Confirmation number: 404-332-5649
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EXHIBIT A
REVOLVING LOAN NOTE
Atlanta, Georgia
November 1, 1999
For value received, IRT PROPERTY COMPANY, a Georgia
corporation (the "Borrower"), promises to pay to the order of WACHOVIA BANK,
N.A., a national banking association (the "Bank"), for the account of its
Lending Office, the principal sum of FIVE MILLION AND NO/100 DOLLARS
($5,000,000), or such lesser amount as shall equal the unpaid principal amount
of each Revolving Loan made by the Bank to the Borrower pursuant to the Credit
Agreement referred to below, on the dates and in the amounts provided in the
Credit Agreement. The Borrower promises to pay interest on the unpaid principal
amount of this Revolving Loan Note on the dates and at the rate or rates
provided for in the Credit Agreement. Interest on any overdue principal of and,
to the extent permitted by law, overdue interest on the principal amount hereof
shall bear interest at the Default Rate, as provided for in the Credit
Agreement. All such payments of principal and interest shall be made in lawful
money of the United States in Federal or other immediately available funds at
the office of the Bank, 191 Peachtree Street, N.E., Atlanta, Georgia 30303-1757,
or such other address as may be specified from time to time pursuant to the
Credit Agreement.
All Revolving Loans made by the Bank, the respective
maturities thereof, the interest rates from time to time applicable thereto, and
all repayments of the principal thereof shall be recorded by the Bank; provided
that the failure of the Bank to make any such recordation shall not affect the
obligations of the Borrower hereunder or under the Credit Agreement.
This Revolving Loan Note is the Revolving Loan Note referred
to in the Revolving Loan Credit Agreement dated as of November 1, 1999 between
the Borrower and Wachovia Bank, N.A. (as the same may be amended and modified
from time to time, the "Credit Agreement"). Terms defined in the Credit
Agreement are used herein with the same meanings. Reference is made to the
Credit Agreement for provisions for the optional and mandatory prepayment and
the repayment hereof and the acceleration of the maturity hereof, as well as the
obligation of the Borrower to pay all costs of collection, including reasonable
attorneys fees, in the event this Revolving Loan Note is collected by law or
through an attorney at law.
The Borrower hereby waives presentment, demand, protest,
notice of demand, protest and nonpayment and any other notice required by law
relative hereto, except to the extent as otherwise may be expressly provided for
in the Credit Agreement.
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IN WITNESS WHEREOF, the Borrower has caused this Revolving
Loan Note to be duly executed, under seal, by its duly authorized officer as of
the day and year first above written.
IRT PROPERTY COMPANY (SEAL)
By
---------------------------------------
James G. Levy
Senior Vice President
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EXHIBIT B
OPINION OF
COUNSEL FOR THE BORROWER AND THE GUARANTORS
[Dated as provided in Section 3.01 of the
Credit Agreement]
Wachovia Bank, N.A.,
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attn: Cathy Casey
Dear Sirs:
We have acted as counsel for IRT Property Company, a Georgia
corporation (the "Borrower") in connection with the Revolving Loan Credit
Agreement (the "Credit Agreement") dated as of November 1, 1999, between the
Borrower and Wachovia Bank, N.A., as Bank. We have also acted as counsel for IRT
Capital Corporation II, a Georgia corporation, IRT Capital Corporation II, a
Georgia corporation, IRT Partners L.P., a Georgia limited partnership, IRT
Management Company, a Georgia corporation and IRT Alabama, Inc., an Alabama
corporation (each individually a "Guarantor" and collectively, the
"Guarantors").Terms defined in the Credit Agreement and not defined herein are
used herein as therein defined.
In connection with this opinion, we have examined originals or
photostatic or certified copies of the following documents: (i) the Credit
Agreement; (ii) the Revolving Loan Note dated as of the date hereof; (iii) the
Guaranty Agreement; (iv) the Contribution Agreement; and (v) the FMA Agreement
(collectively, the "Credit Documents"). We have examined originals or copies,
certified or otherwise identified to our satisfaction, of such other documents,
corporate records, certificates of public officials and other instruments and
have conducted such other investigations of fact and law as we have deemed
necessary or advisable for purposes of this opinion.
In rendering this opinion, we have assumed (i) the genuineness
of all signatures of, and the authority of, all persons signing all agreements
and documents on behalf of the parties thereto other than the Borrower and the
Guarantors; (iii) the authenticity of all documents submitted to us as
originals; (iv) the conformity to authentic original documents of all documents
submitted to us as photostatic or certified copies; (v) the due authorization,
execution and delivery of all agreements and documents by all parties thereto
other than the Borrower and the
55
<PAGE> 61
Guarantors; (vi) the legal right and power of all such parties other than the
Borrower and the Guarantors under all applicable laws and regulations to enter
into, execute and deliver such agreements and documents; (vii) that such
agreements and documents and are the legal, valid and binding obligations of all
parties thereto (other than the Borrower and Guarantors) enforceable against
such parties in accordance with their terms.
This opinion letter is limited by, and is in accordance with,
the January 1, 1992 edition of the Interpretive Standards applicable to Legal
Opinions to Third Parties in Corporate Transactions adopted by the Legal Opinion
Committee of the Corporate and Banking Law Section of the State Bar of Georgia,
which Interpretative Standards are incorporated in this opinion letter by this
reference. Capitalized terms used in this opinion letter and the attachments
hereto and not otherwise defined herein shall have the meanings assigned to such
terms in the Interpretive Standards and/or the Credit Agreement.
As to factual matters forming a basis of our opinions,
whenever an opinion with respect to existence or absence of a fact or an opinion
which is based in whole or in part on the existence or absence of the fact is
qualified by the phrase "to our knowledge," or words to that effect, it is
intended to indicate that we have no actual knowledge that any such fact is
inaccurate, and further that any such statement is limited to the current
awareness of Ralph F. MacDonald, Mark Nance and Andrea Goodrich (the "Primary
Lawyer Group"), the attorneys involved in our representation of the Borrower and
Guarantors in connection with the matters described herein. In this connection,
we have relied, with your permission, upon the articles or certificate of
incorporation and bylaws of the Borrower and each Guarantor, upon certificates
of public officials, upon the representations and warranties contained in the
Credit Documents to the extent the same relate to matters of fact relevant to
the opinions expressed herein and an officer's certificate attached hereto as
Exhibit A. We have no reason to believe that such items are not true and correct
in all material respects.
The opinions set forth herein are limited to the laws of the
State of Georgia, applicable federal laws and, solely for purposes of the
opinions set forth in paragraphs 4 and 5(i) and (ii), the Alabama Business
Corporation Code.
Upon the basis of the foregoing, and subject to the
qualifications hereinafter set forth or incorporated herein, we are of the
opinion that:
1. The Borrower is a corporation, validly existing and in good
standing under the laws of Georgia and has all corporate powers required to
carry on its business as now conducted.
2. Each Georgia Guarantor (other than IRT Partners) is a
corporation, validly existing and in good standing under the laws of Georgia and
has all corporate powers required to carry on its business as now conducted.
3. IRT Partners is a limited partnership, validly existing and
in good standing under the laws of Georgia and has all powers required to carry
on its business as now conducted.
56
<PAGE> 62
4. IRT Alabama is a corporation, validly existing and in good
standing under the laws of Alabama and has all corporate powers required to
carry on its business as now conducted.
5. The execution, delivery and performance by the Borrower of
the Credit Agreement, the Revolving Loan Note and the FMA Agreement and of the
Guaranty by the Guarantors (i) are within the Borrower's and each Guarantor's
powers, (ii) have been duly authorized by all necessary corporate or partnership
action, as applicable, (iii) require no action by or in respect of, or filing
with, any governmental body, agency or official, (iv) do not contravene, or
constitute a default under, any provision of applicable law or regulation or of
the organizational documents of the Borrower or any Guarantor or any judgment,
injunction, order, decree or any Material Contract which to our knowledge is
binding upon the Borrower or any Guarantor and (v) to our knowledge, except as
provided in the Credit Agreement, do not result in the creation or imposition of
any Lien on any asset of the Borrower or any of its Subsidiaries. With your
permission we have assumed that the term "Material Contracts" used above
includes only those agreements set forth on Exhibit B hereto.
6. The Credit Agreement, the Revolving Loan Note, the FMA
Agreement and the Guaranty are enforceable.
7. Neither the Borrower nor any of its Subsidiaries is an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
8. Neither the Borrower nor any of its Subsidiaries is a
"holding company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company", as such terms are defined in the Public Utility Holding Company Act of
1935, as amended.
Based upon the limitations and qualifications set forth above
and incorporated herein, we confirm to you that, to our knowledge, there is no
action, suit or proceeding pending, or threatened, against or affecting the
Borrower or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official in which there is a reasonable possibility
of an adverse decision which could materially adversely affect the business,
consolidated financial position or consolidated results of operations of the
Borrower and its Consolidated Subsidiaries, considered as a whole, or which in
any manner questions the validity or enforceability of the Credit Agreement, any
Note or the Guaranty. The foregoing confirmation is based solely upon the
current awareness of the Primary Lawyer Group and the officer's certificate,
provided, however, that the determination of materiality is based solely on the
officer's certificate. Furthermore, we have made no examination of our files,
the files of the Borrower or its Subsidiaries or the plaintiff or defendant
indices of any federal, state or other court or any other tribunal to determine
the existence of any suits or proceedings pending or threatened against the
Borrower or its Subsidiaries.
We are qualified to practice in the State of Georgia and do
not purport to be experts on any laws other than the laws of the United States
and the State of Georgia and, except
57
<PAGE> 63
with respect to matters under the Alabama Business Corporation Act discussed in
paragraphs 4, 5(i) and 5(ii), this opinion is rendered only with respect to such
laws. We have made no independent investigation of the laws of any other
jurisdiction. This opinion is limited to the matters stated herein and no
opinion is implied or may be inferred beyond the matters expressly stated.
Opinions rendered herein are as of the date hereof, and we make no undertaking
and expressly disclaim any duty to supplement such opinions if, after the date
hereof, facts and circumstances come to our attention or changes in the law
occur which could affect such opinions.
This opinion is delivered to you in connection with the
transaction referenced above and may only be relied upon by you, any Participant
under the Credit Agreement, and Jones, Day, Reavis & Pogue without our prior
written consent.
Very truly yours,
ALSTON & BIRD LLP
By:
-------------------------
A Partner
58
<PAGE> 64
EXHIBIT A
OFFICER'S CERTIFICATE
(Attached)
59
<PAGE> 65
EXHIBIT B
MATERIAL CONTRACTS
60
<PAGE> 66
EXHIBIT C
OPINION OF
JONES, DAY, REAVIS & POGUE, SPECIAL COUNSEL
FOR THE BANK
[Dated as provided in Section 3.01 of the
Credit Agreement]
Wachovia Bank, N.A.,
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attn: Cathy Casey
Dear Sirs:
We have participated in the preparation of the Revolving Loan
Credit Agreement (the "Credit Agreement") dated as of November 1, 1999 by and
between IRT Property Company, a Georgia corporation (the "Borrower"), and
Wachovia Bank, N.A., as Bank (the "Bank"), and have acted as special counsel for
the Bank for the purpose of rendering this opinion pursuant to Section 3.01(d)
of the Credit Agreement. Terms defined in the Credit Agreement and not defined
herein are used herein as therein defined.
This opinion letter is limited by, and is in accordance with,
the January 1, 1992 edition of the Interpretive Standards applicable to Legal
Opinions to Third Parties in Corporate Transactions adopted by the Legal Opinion
Committee of the Corporate and Banking Law Section of the State Bar of Georgia
which Interpretive Standards are incorporated herein by this reference.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as we have deemed necessary or advisable
for purposes of this opinion.
Upon the basis of the foregoing, and assuming the due
authorization, execution and delivery of the Credit Agreement, the Revolving
Loan Note and the FMA Agreement by or on behalf of the Borrower, and of the
Guaranty by IRT Capital Corporation II, a Georgia corporation, IRT Partners
L.P., a Georgia limited partnership, IRT Management Company, a Georgia
corporation and IRT Alabama, Inc., an Alabama corporation (each individually a
"Guarantor" and collectively, the "Guarantors") we are of the opinion that:
61
<PAGE> 67
1. The Credit Agreement, the Revolving Loan Note constitute
valid and binding agreements of the Borrower and the Guaranty constitutes valid
and binding obligations of the Guarantors, in each case enforceable in
accordance with its terms except as: (i) the enforceability thereof may be
affected by bankruptcy, insolvency, reorganization, fraudulent conveyance,
voidable preference, moratorium or similar laws applicable to creditors' rights
or the collection of debtors' obligations generally; (ii) rights of acceleration
and the availability of equitable remedies may be limited by equitable
principles of general applicability; and (iii) the enforceability of certain of
the remedial, waiver and other provisions of the Credit Agreement, the Revolving
Loan Note and the FMA Agreement may be further limited by the laws of the State
of Georgia; provided that such additional laws do not, in our opinion,
substantially interfere with the practical realization of the benefits expressed
in the Credit Agreement, the Revolving Loan Note and the FMA Agreement, except
for the economic consequences of any procedural delay which may result from such
laws.
2. The obligations of the Borrower to the Bank under the
Credit Agreement (the "Bank Obligations") constitute "Existing Senior
Indebtedness", as defined in Section 2.8 of the Supplemental Indenture No. 3
dated as of September 9, 1998 executed by the Borrower, as the "Company", IRT
Partners L.P., as the "Guarantor" and SunTrust Bank, Atlanta, as the "Trustee",
supplementing the Indenture dated as of November 9, 1995, as amended, a form of
which has been filed with the Securities and Exchange Commission under the
Securities Act of 1933, as an exhibit to the Borrower's Registration Statement
on Form S-3 (Registration No. 33-63523), providing for the issuance from time to
time of senior debt securities, and in the event any "Guaranty Proceeds" (as
defined in such Section 2.8) are received thereunder, the Bank would be entitled
to receive an equal and ratable distribution thereof pursuant to such Section
2.8, based on the principal amount of the Bank Obligations then outstanding at
the time of such distribution.
In giving the foregoing opinion, we express no opinion as to
the effect (if any) of any law of any jurisdiction except the State of Georgia.
We express no opinion as to the effect of the compliance or noncompliance of the
Bank with any state or federal laws or regulations applicable to the Bank by
reason of the legal or regulatory status or the nature of the business of the
Bank.
This opinion is delivered to you in connection with the
transaction referenced above and may only be relied upon by you and any
Participant under the Credit Agreement without our prior written consent.
Very truly yours,
62
<PAGE> 68
EXHIBIT D
COMPLIANCE CERTIFICATE
Reference is made to the Revolving Loan Credit Agreement dated
as of November 1, 1999 (as modified and supplemented and in effect from time to
time, the "Credit Agreement") by and between IRT Property Company(1) and
Wachovia Bank, N.A., as Bank. Capitalized terms used herein shall have the
meanings ascribed thereto in the Credit Agreement; all amounts shown herein,
unless expressly set forth to the contrary, shall be without duplication.
Pursuant to Section 5.01(c) of the Credit Agreement,
_____________, the duly authorized __________ of the Borrower, hereby (i)
certifies to the Bank that the information contained in the Compliance Check
List attached hereto is true, accurate and complete as of _________, _____, and
that, to the best or our knowledge, no Default is in existence on and as of the
date hereof and (ii) restates and reaffirms that the representations and
warranties contained in Article IV of the Credit Agreement are true on and as of
the date hereof as though restated on and as of this date (except to the extent
any such representation or warranty is expressly made as of a prior date).
IRT PROPERTY COMPANY,
a Georgia corporation
By:
----------------------------
Its:
- -----------------------
(1) Change to IRT Partners L.P. after satisfaction of all Top Level
Reorganization Conditions.
63
<PAGE> 69
COMPLIANCE CHECK LIST
IRT PROPERTY COMPANY
-------------------------------
-----------------,-------
1. Consolidations, Mergers and Sales of Assets (Section 5.05)
The Borrower and the Parent will not, nor will they permit
any Subsidiary to, consolidate or merge with or into, or sell, lease or
otherwise transfer all or any substantial part of its assets to, any
other Person, or discontinue or eliminate any business line or segment,
provided that (a) the Top Level Reorganization may be consummated,
subject to satisfaction of the Top Level Reorganization Conditions, and
the Borrower may merge with another Person if (i) such Person was
organized under the laws of the United States of America or one of its
states, (ii) the Borrower is the corporation surviving such merger and
(iii) immediately after giving effect to such merger, no Default shall
have occurred and be continuing, (b) Subsidiaries of the Borrower/Parent
may merge with one another, and with the Borrower (c) Subsidiaries of the
Borrower/Parent may merge with any other Person, so long as (i) such
Person was organized under the laws of the United States of America or
one of its states (ii) such Person shall become a Subsidiary immediately
upon consummation of such merger (and if the merging Subsidiary was a
Guarantor and is not the corporation surviving such merger, such Person
shall comply with Section 5.27) and (iii) immediately after giving effect
to such merger, no Default shall have occurred and be continuing, and (d)
the foregoing limitation on the sale, lease or other transfer of assets
and on the discontinuation or elimination of a business line or segment
shall not prohibit, (A) sales, leases or transfers of assets between
Guarantors or between any Guarantor and the Borrower, or transfers
pursuant to the Top Level Reorganization, subject to satisfaction of the
Top Level Reorganization conditions, or (B) during any Fiscal Quarter, a
transfer of assets or the discontinuance or elimination of a business
line or segment (in a single transaction or in a series of related
transactions) unless the aggregate assets to be so transferred or
utilized in a business line or segment to be so discontinued, when
combined with all other assets transferred, and all other assets utilized
in all other business lines or segments discontinued, during such Fiscal
Quarter and the immediately preceding 3 Fiscal Quarters, either (x)
constituted more than 15% of Consolidated Total Assets at the end of the
most recent Fiscal Year immediately preceding such Fiscal Quarter, or (y)
contributed more than 15% of Consolidated Operating Profits during the 4
Fiscal Quarters immediately preceding such Fiscal Quarter.
<TABLE>
<S> <C> <C>
(a) Aggregate amount of assets sold during Fiscal
Quarter just ended $-----------
(b) Aggregate amount of assets sold during 3 prior
Fiscal Quarters $-----------
</TABLE>
64
<PAGE> 70
<TABLE>
<S> <C> <C>
(c) Sum of (a) and (b) $-----------
(d) Consolidated Total Assets $-----------
(e) 15% of (d) $-----------
Limitation: (c) may not exceed (e)
(f) aggregate amount of Consolidated Operating
Profit contributed by assets sold during Fiscal
Quarter just ended $-----------
(g) aggregate amount of Consolidated Operating
Profit contributed by assets sold during 3
prior Fiscal Quarters $-----------
(h) sum of (f) and (g) $-----------
(i) Total Consolidated Operating Profits during
Fiscal Quarter just ended and 3 prior Fiscal
Quarters $-----------
(j) 15% of (i) $-----------
Limitation: (h) may not exceed (j) -----------
</TABLE>
2. Restricted Payments (Section 5.15)(1)
The Borrower's/Parent's Restricted Payments in any calendar year
shall not exceed (i) as to purchases of Capital Stock in connection
with any Stock Buyback Plan, acquisition of shares in any 12 month
period in excess of 10% of all of the Borrower/Parent's Capital
Stock outstanding at the beginning of such period, and (ii) as to
other Restricted Payments, 95% of Funds From Operations for such
period.
- -----------------------
1 Include this paragraph 2 and Schedule 1 only with the first Compliance
Certificate furnished after the end of each Fiscal Year.
65
<PAGE> 71
<TABLE>
<S> <C> <C>
(a) Acquisitions of shares pursuant to a Stock
Buyback Plan during last 12 months $-----------
(b) Capital Stock of Borrower/Parent at the beginning
of such 12 month period $-----------
(c) 10% of (b) $-----------
(d) Limitation: (a) may not exceed (c)
(e) Other Restricted Payments for current calendar
year $-----------
(f) Funds From Operations for current calendar year
Schedule 1 $-----------
(g) 95% of (f) $-----------
Limitation: (e) may not exceed (g)
</TABLE>
66
<PAGE> 72
3. Investments (Section 5.16)
Neither the Borrower, the Parent nor any of its Subsidiaries shall
make Investments in any Person except (i) loans or advances to
employees not exceeding $10,000,000 in the aggregate principal
amount outstanding at any time, in each case made in the ordinary
course of business and consistent with practices existing on
December 31, 1998; (ii) deposits required by government agencies or
public utilities, (ii) Investments in direct obligations of the
United States Government maturing within one year, (iii)
Investments in certificates of deposit issued by a commercial bank
whose credit is satisfactory to the Bank, (iv) Investments in
commercial paper rated A1 or the equivalent thereof by S&P or P1 or
the equivalent thereof by Moody's and in either case maturing
within 6 months after the date of acquisition, (v) Investments in
tender bonds the payment of the principal of and interest on which
is fully supported by a letter of credit issued by a United States
bank whose long-term certificates of deposit are rated at least AA
or the equivalent thereof by S&P and Aa or the equivalent thereof
by Moody's, (vi) Investments existing on the Closing Date, (vii)
Investments in Guarantors (or in any Person which, upon the making
of such Investment, becomes a Guarantor pursuant to Section 5.27)
and (viii) other Investments which do not at any time exceed an
aggregate amount outstanding equal to (1) at any time during which
the Borrower's Debt Rating is both BBB or better by S&P and Baa2 or
better by Moody's 20% of Consolidated Total Assets, and (2) at any
other time, 15% of Consolidated Total Assets; provided, however,
immediately after giving effect to the making of any Investment, no
Default shall have occurred and be continuing.
<TABLE>
<S> <C> <C>
(a) Loans and advances to employees $----------
Limitation $10,000,000
(b) Other Investments not permitted by clauses (ii)
through (vii) $----------
(c) Consolidated Total Assets $----------
(d) [20%][15%] of (c) $----------
Limitation: (b) may not exceed (d)
</TABLE>
4. Additional Debt (Section 5.19)
Neither the Borrower, the Parent nor any Subsidiary will create,
incur, assume or suffer to exist any Debt except (i) Debt in
existence on the Closing Date; (ii) Debt of
67
<PAGE> 73
any Guarantor to the Borrower or to any other Guarantor, (iii)
other unsecured revolving credit in an aggregate outstanding
principal amount not at any time exceeding $15,000,000, (iv)
publicly held debt having a maturity later than the Termination
Date, and (v) other Debt which is privately held and which does not
constitute revolving credit (including Debt included in
Consolidated Total Secured Debt, so long as it is not revolving
credit, and subject to the provisions of Sections 5.17 and 5.21).
<TABLE>
<S> <C> <C>
(a) Unsecured revolving credit not permitted by
clauses (i) and (ii) $----------
Limitation: $15,000,000
</TABLE>
5. Ratio of Consolidated Total Liabilities to Consolidated Total Asset Value
(Section 5.20)
The ratio of Consolidated Total Liabilities to Consolidated Total
Asset Value shall at all times be equal to or less than 0.55 to 1.0
<TABLE>
<S> <C> <C>
(a) Consolidated Total Liabilities Schedule 2 $----------
(b) Consolidated Total Asset Value Schedule 3 $----------
(c) Actual ratio of (a) to (b) __ to 1.0
Maximum Ratio 0.55 to 1.0
</TABLE>
6. Ratio of Consolidated Total Secured Debt to Consolidated Total Asset
Value (Section 5.21)
The ratio of Consolidated Total Secured Debt to Consolidated Total
Asset Value shall at all times be equal to or less than 0.35 to
1.0.
<TABLE>
<S> <C> <C>
(a) Consolidated Total Secured Debt Schedule 4 $----------
(b) Consolidated Total Asset Value Schedule 3 $----------
(c) Actual ratio of (a) to (b) __ to 1.0
Maximum Ratio 0.35 to 1.0
</TABLE>
68
<PAGE> 74
7. Ratio of Consolidated EBITDA to Consolidated Interest Expense (Section 5.22)
The ratio of Consolidated EBITDA to Consolidated Interest Expense
actually incurred for the Fiscal Quarter just ended will not be
less than 2.0 to 1.0.
<TABLE>
<S> <C> <C>
(a) Consolidated EBITDA Schedule 5 $-----------
(b) Consolidated Interest Expense $-----------
(c) Ratio of (a) to (b) to 1.0 _____ to 1.0
Minimum Ratio 2.0 to 1.0
</TABLE>
8. Ratio of Consolidated Unencumbered Real Estate Assets to Consolidated
Unsecured Senior Debt (Section 5.23)
The ratio of Consolidated Unencumbered Real Estate Assets to
Consolidated Unsecured Senior Debt shall at all times be greater
than 1.65 to 1.00.
<TABLE>
<S> <C> <C>
(a) Net Operating Income from each Property not
subject to a Mortgage Schedule 6 $-----------
(b) (a) divided by 0.0975 $-----------
(c) 4 times (b) $-----------
(d) acquisition cost of improved Properties not
subject to a Mortgage owned by Borrower or any
Consolidated Entity less than three months, as
determined on the last day of the Fiscal Quarter
just ended; plus $-----------
(e) book value of all Construction in Progress not
subject to a Mortgage and Book Value of
unimproved land not subject to a Mortgage $-----------
(f) sum of (c), (d) and (e) $-----------
(g) Consolidated Unsecured Senior Debt Schedule 7 $-----------
(h) Actual ratio of (f) to (g) ___ to 1.0
Minimum Ratio 1.65 to 1.0
</TABLE>
69
<PAGE> 75
9. Ratio of Consolidated Unencumbered Net Operating Income to Consolidated
Unsecured Interest Expense (Section 5.24)
The ratio of Consolidated Unencumbered Net Operating Income to
Consolidated Unsecured Interest Expense shall at all times be
greater than 2.0 to 1.0.
<TABLE>
<S> <C> <C>
(a) Consolidated Unencumbered Net Operating Income
Schedule 6 $-----------
(b) Consolidated Unsecured Interest Expense $-----------
(c) Actual ratio of (a) to (b) ___ to 1.0
Minimum Ratio 2.0 to 1.0
</TABLE>
10. Ratio of Consolidated EBITDA to Consolidated Fixed Charges (Section 5.25)
The ratio of Consolidated EBITDA to Consolidated Fixed Charges, in
each case for the Fiscal Quarter just ended and the 3 immediately
preceding Fiscal Quarters, shall at all times exceed 1.5 to 1.00.
<TABLE>
<S> <C> <C>
(a) Consolidated EBITDA Schedule 5 $-----------
(b) Consolidated Fixed Charges Schedule 8 $-----------
(c) Ratio of (a) to (b) to 1.0 ___ to 1.0
Minimum Ratio 1.5 to 1.0
</TABLE>
70
<PAGE> 76
SCHEDULE 1
FUNDS FROM OPERATIONS
(for Fiscal Year just ended)(1)
<TABLE>
<S> <C>
GAAP Net income $-----------
plus depreciation and amortization of real estate assets $-----------
plus net loss/(gain) on real estate sales $-----------
plus loss/(gains) on extraordinary $-----------
Without duplication, Funds From Operations from
unconsolidated entities $-----------
FUNDS FROM OPERATIONS $-----------
</TABLE>
- ---------------------------
(1) The calculation is subject to change as required by NAREIT, subject to the
provisions of Section 1.02.
71
<PAGE> 77
SCHEDULE 2
CONSOLIDATED TOTAL LIABILITIES
<TABLE>
<S> <C>
Total Liabilities(1)
$-----------
Debt Guaranteed by Borrower or any
Guarantor $-----------
CONSOLIDATED TOTAL LIABILITIES (sum of (a) and (b)) $-----------
</TABLE>
- -------------------------
(1) Include liabilities on account of Dividends, whether paid or declared but
not yet paid.
72
<PAGE> 78
SCHEDULE 3
CONSOLIDATED TOTAL ASSET VALUE
<TABLE>
<S> <C> <C>
(a) Net Operating Income for the 3 month period ending on the
last day of the month just ended prior to the date of
determination, from each Property owned for three months or
longer(1) $----------
(b) divided by 0.0975 $----------
(c) 4 times (b) $----------
(d) book value of Construction in Progress and unimproved land $----------
(e) acquisition cost of improved Property owned by Borrower for
less than three months $----------
(f) sum of unrestricted balances on deposit with banks or other
financial institutions and all restricted cash held by a
Qualified Intermediary on behalf of the Borrower/Parent or
any Guarantor $----------
(g) for all non-Wholly Owned Subsidiaries, the book value of the
Ownership Percentage of such Subsidiary $----------
(h) book value of all other Consolidated Tangible Assets
$----------
CONSOLIDATED TOTAL ASSET VALUE (sum of (c) through (h)) $----------
</TABLE>
- ---------------------------------
(1) Exclude percentage rents received during such period, but including an
amortized value for percentage rents received during the current Fiscal Year.
73
<PAGE> 79
CONSOLIDATED TOTAL SECURED DEBT(1)
SCHEDULE 4
<TABLE>
<CAPTION>
INTEREST FINAL TOTAL
RATE(2) MATURITY
<S> <C> <C> <C>
MONEY BORROWED
$
---------------------------------------------- ------------- ------------------ --------------------
$
---------------------------------------------- ------------- ------------------ --------------------
$
---------------------------------------------- ------------- ------------------ --------------------
$
---------------------------------------------- ------------- ------------------ --------------------
$
---------------------------------------------- ------------- ------------------ --------------------
Total Money Borrowed $
--------------------
DEFERRED PURCHASE PRICE OF REAL PROPERTY
$
---------------------------------------------- ------------- ------------------ --------------------
$
---------------------------------------------- ------------- ------------------ --------------------
$
------------- ------------------ --------------------
----------------------------------------------
$
---------------------------------------------- ------------- ------------------ --------------------
Total Deferred Purchase Price $
--------------------
</TABLE>
<TABLE>
<CAPTION>
CAPITAL LEASES IN WHICH BORROWER IS THE TENANT
<S> <C>
$
---------------------------------------------------------------------------------------- --------------------
$
---------------------------------------------------------------------------------------- --------------------
Total Capital Leases
</TABLE>
<TABLE>
<CAPTION>
GUARANTEE OF DEBT OF PERSONS OTHER THAN BORROWER AND GUARANTOR
<S> <C> <C> <C>
---------------------------------------------- ------------- ------------------ --------------------
---------------------------------------------- ------------- ------------------ --------------------
---------------------------------------------- ------------- ------------------ --------------------
---------------------------------------------- ------------- ------------------ --------------------
---------------------------------------------- ------------- ------------------ --------------------
CONSOLIDATED TOTAL $
SECURED DEBT --------------------
</TABLE>
- ----------------------------
(1) Include only Debt secured by a Mortgage. The Borrower/Parent may substitute
its own internal spreadsheet for this Schedule, so long as it contains the
relevant information.
(2) If rate is fixed, insert contract rate. If rate is floating, state that.
74
<PAGE> 80
SCHEDULE 5
CONSOLIDATED EBITDA
<TABLE>
<S> <C>
_____ quarter _____
consolidated net income(1) $----------
less extraordinary gains ($----------)
plus extraordinary losses $----------
less gains on sales of assets ($----------)
plus losses on sales of assets $----------
plus losses from Debt forgiveness $----------
plus expenses re significant non-recurring events $----------
plus Consolidated Interest Expense $----------
plus taxes on income $----------
plus depreciation and amortization $----------
plus other non-cash charges $----------
Total $----------
Consolidated EBITDA from 3 immediately preceding
Fiscal Quarters, as reported in prior Compliance Certificates $----------
Total $----------
Consolidated EBITDA $
==========
</TABLE>
- ---------------------
(1) Exclude minority equity interests.
75
<PAGE> 81
SCHEDULE 6
NET OPERATING INCOME AND CONSOLIDATED UNENCUMBERED NET
OPERATING INCOME
Calculation of Net Operating Income:
(for Fiscal Quarter just ended)
_____ quarter _____
<TABLE>
<S> <C> <C>
(a) Property Revenues $-----------
(b) Property expenses (excluding depreciation, amortization and
debt service) $-----------
(c) Management fee (4% of gross rental income, excluding
percentage rents and less any management fees included in
(b)) $-----------
(d) 25% of annual capital reserve ($0.15 per square foot) $-----------
(e) NET OPERATING INCOME (sum of (a) less (b) less (c) less (d)) $-----------
</TABLE>
76
<PAGE> 82
Calculation of Consolidated Unencumbered Net Operating Income(1)
(for Fiscal Quarter just ended)
_____ quarter _____
<TABLE>
<S> <C> <C>
(a) Property Revenues $-----------
(b) Property expenses (excluding depreciation, amortization and
debt service) $-----------
(c) Management fee (4% of gross rental income, excluding
percentage rents and less any management fees included in
(b)) $-----------
(d) 25% of annual capital reserve ($0.15 per square foot) $-----------
(e) NET OPERATING INCOME (sum of (a) less (b) less (c) less (d)) $-----------
</TABLE>
- ---------------------
(1) Include only Properties not subject to a Mortgage.
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<PAGE> 83
SCHEDULE 7
CONSOLIDATED UNSECURED SENIOR DEBT(1)
<TABLE>
<CAPTION>
INTEREST FINAL
RATE(2) MATURITY TOTAL
------------- ------------------ --------------------
<S> <C> <C> <C>
MONEY BORROWED
$
---------------------------------------------- ------------- ------------------ --------------------
$
---------------------------------------------- ------------- ------------------ --------------------
$
---------------------------------------------- ------------- ------------------ --------------------
$
---------------------------------------------- ------------- ------------------ --------------------
$
---------------------------------------------- ------------- ------------------ --------------------
Total Money Borrowed $
--------------------
DEFERRED PURCHASE PRICE(3)
$
---------------------------------------------- ------------- ------------------ --------------------
$
---------------------------------------------- ------------- ------------------ --------------------
$
---------------------------------------------- ------------- ------------------ --------------------
$
---------------------------------------------- ------------- ------------------ --------------------
Total Deferred Purchase Price $
--------------------
CAPITAL LEASES IN WHICH BORROWER IS THE TENANT
$
---------------------------------------------------------------------------------------- --------------------
$
---------------------------------------------------------------------------------------- --------------------
Total Capital Leases
REDEEMABLE PREFERRED STOCK
$
--------------------
Total Redeemable Preferred Stock $
--------------------
LETTER OF CREDIT REIMBURSEMENT OBLIGATIONS
$
---------------------------------------------------------------------------------------- --------------------
$
---------------------------------------------------------------------------------------- --------------------
</TABLE>
- ----------------------------------
(1) Include only Debt not secured by a Mortgage and not subordinated to other
Consolidated Debt. The Borrower/Parent may substitute its own internal
spreadsheet for this Schedule, so long as it contains the relevant information.
(2) If rate is fixed, insert contract rate. If rate is floating, state that.
(3) Exclude trade accounts payable in the ordinary course of business.
78
<PAGE> 84
<TABLE>
<S> <C>
Total Letter of Credit
Reimbursement Obligations $
--------------------
DEBT OF OTHERS SECURED BY A LIEN
---------------------------------------------------------- $
-------------------
---------------------------------------------------------- $
-------------------
Total Debt of Others
Secured by a Lien $
--------------------
HEDGING ARRANGEMENTS
---------------------------------------------------------- $
-------------------
--------------------------------------------------------- $
-------------------
Total Hedging Arrangements $
-------------------
FORWARD CONTRACTS FOR PURCHASE OF
EQUITY SECURITIES
---------------------------------------------------------- $
-------------------
---------------------------------------------------------- $
===================
</TABLE>
<TABLE>
<CAPTION>
GUARANTEE OF DEBT OF PERSONS OTHER THAN BORROWER AND GUARANTOR
<S> <C> <C> <C>
---------------------------------------------- ------------- ------------------ --------------------
---------------------------------------------- ------------- ------------------ --------------------
---------------------------------------------- ------------- ------------------ --------------------
---------------------------------------------- ------------- ------------------ --------------------
---------------------------------------------- ------------- ------------------ --------------------
TOTAL CONSOLIDATED $
SENIOR DEBT --------------------
</TABLE>
79
<PAGE> 85
SCHEDULE 8
CONSOLIDATED FIXED CHARGES
<TABLE>
<S> <C>
_____ quarter _____
Consolidated Interest Expense $----------
plus Dividends paid or declared but not paid on preferred stock $----------
plus scheduled principal amortization paid(1) $----------
plus other payments on ground leases $----------
Total $----------
Consolidated Fixed Charges from 3 immediately preceding
Fiscal Quarters, as reported in prior Compliance Certificates $----------
Total $----------
Consolidated Fixed Charges $
===========
</TABLE>
- ---------------------
(1) Exclude principal payments under this Agreement or any other agreement
pertaining to revolving debt permitted by Section 5.19(iii) and any balloon,
bullet or similar payments on other Debt.
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<PAGE> 86
EXHIBIT E
IRT PROPERTY COMPANY
CLOSING CERTIFICATE
Reference is made to the Revolving Loan Credit Agreement (the
"Credit Agreement") dated as of November 1, 1999, between IRT Property Company
and Wachovia Bank, N.A., as Bank. Capitalized terms used herein have the
meanings ascribed thereto in the Credit Agreement.
Pursuant to Section 3.01(e) of the Credit Agreement, James G.
Levy, the duly authorized Senior Vice President of IRT Property Company hereby
certifies to the Bank that (i) no Default has occurred and is continuing as of
the date hereof, and (ii) the representations and warranties contained in
Article IV of the Credit Agreement are true on and as of the date hereof.
Certified as of November 1, 1999.
By:
---------------------------------
James G. Levy
Senior Vice President
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<PAGE> 87
EXHIBIT F
IRT PROPERTY COMPANY
[NOTE: A SIMILAR CERTIFICATE SHOULD BE PREPARED FOR EACH GUARANTOR AND WITH
RESPECT TO THE GUARANTY.]
SECRETARY'S CERTIFICATE
The undersigned, __________________________________,
______________________, Secretary of IRT Property Company, a Georgia
corporation (the "Borrower"), hereby certifies that [s]he has been duly
elected, qualified and is acting in such capacity and that, as such, [s]he is
familiar with the facts herein certified and is duly authorized to certify the
same, and hereby further certifies, in connection with the Revolving Loan
Credit Agreement dated as of November 1, 1999 between the Borrower and Wachovia
Bank, N.A. as Bank, that:
1. Attached hereto as Exhibit A is a complete and correct
copy of the Certificate of Incorporation of the Borrower as in full
force and effect on the date hereof as certified by the Secretary of
State of the State of ________________, the Borrower's state of
incorporation.
2. Attached hereto as Exhibit B is a complete and correct
copy of the Bylaws of the Borrower as in full force and effect on the
date hereof.
3. Attached hereto as Exhibit C is a complete and correct
copy of the resolutions duly adopted by the Board of Directors of the
Borrower on ____________ ___, 1999 approving, and authorizing the
execution and delivery of, the Credit Agreement, the Revolving Loan
Note, the FMA Agreement and the other Loan Documents (as such terms
are defined in the Credit Agreement) to which the Borrower is a party.
Such resolutions have not been repealed or amended and are in full
force and effect, and no other resolutions or consents have been
adopted by the Board of Directors of the Borrower in connection
therewith.
4. __________________, who is ______________________ of the
Borrower signed the Credit Agreement, the Revolving Loan Note, the FMA
Agreement and the other Loan Documents to which the Borrower is a
party, was duly elected, qualified and acting as such at the time
[s]he signed the Credit Agreement, the Revolving Loan Note, the FMA
Agreement and other Loan Documents to which the Borrower is a party,
and [his/her] signature appearing on the Credit Agreement, the
Revolving Loan Note, the FMA Agreement and the other Loan Documents to
which the Borrower is a party is [his/her] genuine signature.
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<PAGE> 88
IN WITNESS WHEREOF, the undersigned has hereunto set
[his/her] hand as of November 1, 1999.
-----------------------------
83
<PAGE> 89
EXHIBIT G
FORM OF GUARANTY AGREEMENT
THIS GUARANTY (this "Guaranty") is made as of November 1,
1999, by IRT Capital Corporation II, a Georgia corporation, IRT PARTNERS L.P.,
a Georgia limited partnership, IRT MANAGEMENT COMPANY, a Georgia corporation
and IRT ALABAMA, INC., an Alabama corporation (each individually a "Guarantor,"
and collectively, the "Guarantors," which terms shall include (x) any
subsidiary of IRT Property Company or, after the Top Level Reorganization, of
IRT Property Company as the Parent) which becomes a Guarantor pursuant to
Paragraph 25 hereof and Section 5.27 of the Credit Agreement referred to below
and (y) after the Top Level Reorganization, the Parent pursuant to Paragraph 23
hereof and Section 5.28 of the Credit Agreement) in favor of the Bank, under
the Credit Agreement referred to below;
W I T N E S S E T H :
WHEREAS, IRT Property Company, a Georgia corporation (the
"Borrower") and WACHOVIA BANK, N.A., as Bank (the "Bank"), have entered into a
certain Revolving Loan Credit Agreement dated as of November 1, 1999 (as it may
be amended or modified further from time to time, the "Credit Agreement"),
providing, subject to the terms and conditions thereof, for extensions of
credit to be made by the Bank to the Borrower for the benefit of the
Guarantors;
WHEREAS, it is required by Section 3.01(b) of the Credit
Agreement, that the Guarantors execute and deliver this Guaranty whereby the
Guarantors shall guarantee the payment when due of all principal, interest and
other amounts that shall be at any time payable by the Borrower under the
Credit Agreement, the Revolving Loan Note, the FMA Agreement and the other Loan
Documents (as they may be amended, modified or extended from time to time, the
"Guaranteed Agreements"); and
WHEREAS, in consideration of the financial and other support
that the Borrower has provided and (after the Top Level Reorganization, the
Parent will provide), and such financial and other support as the Borrower and
the Parent may in the future provide, to Guarantors, as well, as to the Parent,
the benefits which it receives from the financial accommodations which the
Borrower has received and will receive pursuant to the Credit Agreement,
whether directly or indirectly, and in order to induce the Bank to enter into
the Credit Agreement, the Guarantors are willing to guarantee the payment and
performance of all obligations under the Guaranteed Agreements, including all
principal, interest, fees, costs, and compensation and indemnification amounts
(collectively, the "Obligations"); and
WHEREAS, capitalized terms used herein and not otherwise
defined shall be used as defined in the Credit Agreement;
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<PAGE> 90
NOW, THEREFORE, in consideration of the above premises, Ten
Dollars ($10.00) in hand paid and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Guarantors hereby
unconditionally and jointly and severally guarantees to the Bank full and
prompt payment and performance when due whether at maturity, by acceleration or
otherwise, of all Obligations. Each of the Obligations shall rank pari passu
with each other Obligation. Upon failure by the Borrower to pay punctually any
such amount, each of the Guarantors agrees that it shall forthwith on demand
pay the amount not so paid at the place and in the manner specified in the
Credit Agreement, the Revolving Loan Note, the FMA Agreement or the relevant
Loan Document, as the case may be.
The Guarantors and (pursuant to Section 9.20 of the Credit
Agreement) the Bank hereby further agree that:
1. Representations and Warranties. The Guarantors incorporate herein
by reference as fully as if set forth herein all of the representations and
warranties pertaining to a Subsidiary contained in Article IV of the Credit
Agreement (which representations and warranties shall be deemed to have been
renewed by the Guarantors upon each Borrowing under the Credit Agreement.
2. Covenants. The Guarantors covenant that, so long as the Bank has
any Revolving Loan Commitment outstanding under the Credit Agreement or any
amount payable under the Credit Agreement or any Note shall remain unpaid, that
the Guarantors will (i) fully comply with those covenants applicable to the
Subsidiaries or Guarantors set forth in Article V.
3. Obligations Several. Regardless of whether any other Guarantor,
proposed guarantor or any other Person or Persons is, are or shall become in
any other way responsible to the Bank for or in respect of the Obligations or
any part thereof, and regardless of whether or not any Person or Persons now or
hereafter responsible to the Bank for the Obligations or any part thereof,
whether under this Guaranty or otherwise, shall cease to be so liable, each
Guarantor hereby declares and agrees that this Guaranty is and shall continue
to be a several obligation (as well as a joint one), shall be a continuing
guaranty and shall be operative and binding. Each Guarantor hereby agrees that
it will not exercise any rights which it may acquire by way of subrogation
under this Guaranty, by any payment made hereunder or otherwise, unless and
until all of the Obligations shall have been paid in full. If any amount shall
be paid to any Guarantor on account of such subrogation rights at any time when
all of the Obligations shall not have been paid in full, such amount shall be
held in trust for the benefit of the Bank and shall forthwith be paid to the
Bank to be credited and applied upon the Obligations, whether matured or
unmatured, in accordance with the terms of the Credit Agreement, but subject to
the provisions of Paragraph 10 hereof.
4. Guaranty Final. Upon the execution and delivery of this Guaranty to
the Bank, this Guaranty shall be deemed to be finally executed and delivered by
each Guarantor and shall not be subject to or affected by any promise or
condition affecting or limiting such Guarantor's liability, and no statement,
representation, agreement or promise on the part or the Bank, the
85
<PAGE> 91
Borrower, or either of them, or any officer, employee or agent thereof, unless
contained herein forms any part of this Guaranty or has induced the making
hereof or shall be deemed in any way to affect such Guarantor's liability
hereunder. The Guarantors' obligations hereunder shall remain in full force and
effect until all Obligations shall have been paid in full and the Revolving
Loan Commitment under the Credit Agreement shall have terminated or expired.
5. Amendment and Waiver. No alteration or waiver of this Guaranty or
of any of its terms, provisions or conditions shall be binding upon the parties
against whom enforcement is sought unless made in writing and signed by an
authorized officer of such party.
6. Dealings with Borrower. The Bank may, from time to time, without
exonerating or releasing any Guarantor in any way under this Guaranty, (i) take
such further or other security or securities for the Obligations or any part
thereof as the Bank may deem proper, consistent with the Credit Agreement, or
(ii) release, discharge, abandon or otherwise deal with or fail to deal with
any Guarantor or other guarantor or obligor of the Obligations or any security
or securities therefor or any part thereof now or hereafter held by the Bank,
or (iii) consistent with the Credit Agreement, amend, modify, extend,
accelerate or waive in any manner any of the provisions, terms, or conditions
of the Guaranteed Agreements, all as the Bank may consider expedient or
appropriate in their sole discretion. Without timing the generality of the
foregoing, or of Paragraph 7 hereof, it is understood that the Bank may,
without exonerating or releasing any Guarantor, give up, or modify or abstain
from perfecting or taking advantage of any security for the Obligations and
accept or make any compositions or arrangements, and realize upon any security
for the Obligations when, and in such manner, as the Bank may deem expedient,
consistent with the Credit Agreement, all without notice to any Guarantor.
7. Guaranty Unconditional. Each Guarantor acknowledges and agrees that
no change in the nature or terms of the Obligations or any of the Guaranteed
Agreements, or other agreements, instruments or contracts evidencing, related
to or attendant with the Obligations (including any novation), nor any
determination of lack of enforceability thereof, shall discharge all or any
part of the liabilities and obligations of such Guarantor pursuant to this
Guaranty; it being the purpose and intent of the Guarantors and the Bank that
the covenants, agreements and all liabilities and obligations of the Guarantors
hereunder are absolute, unconditional and irrevocable under any and all
circumstances. Without limiting the generality of the foregoing, each Guarantor
agrees that until each and every one of the covenants and agreements of this
Guaranty is fully performed, such Guarantor's undertakings hereunder shall not
be released, in whole or in part, by any action or thing which might, but for
this paragraph of this Guaranty, be deemed a legal or equitable discharge of a
Guarantor or surety or guarantor, or by reason of any waiver, omission of the
Bank, or its failure to proceed promptly or otherwise, or by reason of any
action taken or omitted by the Bank, whether or not such action or failure to
act varies or increases the risk of, or affects the rights or remedies of, such
Guarantor or by reason of any further dealings between the Borrower and the
Bank, or any other Guarantor or guarantor or surety, and each Guarantor hereby
expressly waives and surrenders any defense to its liability hereunder, or any
right of counterclaim or offset of any nature or description which it may have
or which may exist based upon, and shall be deemed to have consented to, any of
the foregoing acts, omissions, things, agreements or waivers.
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<PAGE> 92
8. Set-off. The Bank may, without demand or otherwise of any kind upon
or to any Guarantor, at any time or from time to time when any amount shall be
due and payable hereunder by the Guarantors, if the Borrower shall not have
timely paid its Obligations, set off and appropriate and apply any and all
deposits (general or special, time or demand, including, bot 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 Bank
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 Bank under the Credit
Agreement, the Revolving Loan Note, the FMA Agreement and any other Loan
Document, including, but not limited to, all claims of any nature or
description arising out of or connected with the Credit Agreement, the
Revolving Loan Note, the FMA Agreement or any other Loan Document, irrespective
of whether or not (a) the Bank shall have made any demand hereunder or (b) the
Bank shall have declared the principal of and interest on the Revolving Loans,
the Revolving Loan Note and other amounts due under the Credit Agreement or the
FMA Agreement to be due and payable and although said Obligations and
liabilities, or any them, shall be contingent or unmatured.
9. Bankruptcy. Each Guarantor agrees that upon the bankruptcy or
winding up or other distribution of assets of the Borrower or any Subsidiary of
the Borrower (other than such Guarantor) or of any other Guarantor or surety or
guarantor for the Obligations, the rights of the Bank against such Guarantor
shall not be affected or impaired by the omission of the Bank to prove its
claim, and the Bank may prove such claim as it sees fit and may refrain from
proving any claim and in their respective discretion it may value as it sees
fit or refrain from valuing any security held by the Bank without in any way
releasing, reducing or otherwise affecting the liability to the Bank of such
Guarantor. If acceleration of the time for payment of any amount payable by the
Borrower under the Credit Agreement, the Revolving Loan Note, the FMA Agreement
or any other Loan Document is stayed upon the insolvency, bankruptcy or
reorganization of the Borrower, all such amounts otherwise subject to
acceleration under the terms of the Credit Agreement, the Revolving Loan Note,
the FMA Agreement or any other Loan Document shall nonetheless be payable by
each Guarantor hereunder forthwith on demand by the Bank. If at any time any
payment of the principal of or interest on the Revolving Loan Note or any other
amount payable by the Borrower under the Credit Agreement, the FMA Agreement or
any other Loan Document is rescinded or must be otherwise restored or returned
upon the insolvency, bankruptcy or reorganization of the Borrower, any other
Guarantor or otherwise, the Guarantors' obligations hereunder with respect to
such payment shall be reinstated as though such payment had been due but not
made at such time.
10. Application of Payments. The Bank, pursuant to Section 9.20 of the
Credit Agreement, acknowledges and agrees that to the extent the Credit
Agreement and any of the Existing Senior Obligations (as defined below) are
then in default, any funds, payments, claims or distributions (the "Guaranty
Proceeds") actually received hereunder shall be made available for distribution
equally and ratably (based on the principal amounts then outstanding) among (a)
the holders of the Obligations and (b) the holders of the Existing Senior
Obligations. For purposes hereof, "Existing Senior Obligations" shall mean
indebtedness for money borrowed, owed or guaranteed in connection with any
public, unsecured and non-subordinated indebtedness for money borrowed of the
Borrower issued in offerings registered under the Securities Act of
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<PAGE> 93
1933 or in placements exempt from registration pursuant to Rule 144A or
Regulations thereunder or otherwise, which is outstanding on the Closing Date.
This Paragraph 10 shall not apply to any payments, funds, claims or
distributions received by the Bank directly or indirectly from the Borrower or
any other Person other than from any of the Guarantors hereunder. Each Guarantor
acknowledges and agrees with the Bank as follows:
(a) To the extent any Guaranty Proceeds are distributed to
the holders of the Existing Senior Obligations, the Obligations shall not be
deemed reduced by any such distribution, and the Guarantors will continue to
make payments pursuant to this Guaranty until such time as the Obligations have
been paid in full after taking into effect any distributions of Guaranty
Proceeds to the holders of Existing Senior Obligations;
(b) Nothing contained herein shall be deemed to limit, modify
or alter the rights of the Bank or be deemed to subordinate the Obligations to
the Existing Senior Obligations, nor give to any holder of Existing Senior
Obligations any rights or subrogation;
(c) Nothing contained herein shall be deemed for the benefit
of any holders of Existing Senior Obligations nor shall anything be construed
to impose on the Bank any fiduciary duties, obligations or responsibilities to
the holders of the Existing Senior Obligations; and
(d) This Guaranty is for the sole benefit of the Bank and its
successors and assigns, and any amounts received by the Bank from whatsoever
source and applied toward the payment of the Obligations shall be supplied in
such order of application as is set forth in the Credit Agreement.
11. Waivers by Guarantor. Each Guarantor hereby expressly waives: (a)
notice of acceptance of this Guaranty, (b) notice of the existence or creation
of all or any of the Obligations, (c) presentment, demand, notice of dishonor,
protest, and all other notices whatsoever, (d) all diligence in collection or
protection of or realization upon the Obligations or any part thereof, any
obligation hereunder, or any security for any of the foregoing and (e) all
rights of subrogation, indemnification, contribution and reimbursement against
the Borrower, all rights to enforce any remedy the Bank may have against the
Borrower and any benefit of, or right to participate in, any collateral or
security now or hereinafter held by the Bank in respect of the Obligations,
even upon payment in full of the Obligations. Any money received by any
Guarantor in violation of this Paragraph shall be held in trust by such
Guarantor for the benefit of the Bank. If a claim is ever made upon the Bank
for the repayment or recovery of any amount or amounts received by any of them
in payment of any of the Obligations and such Person repays all or part of such
amount by reason of (a) any judgment, decree, or order of any court or
administrative body having jurisdiction over such Person or any of its
property, or (b) any good faith settlement or compromise of any such claim
effected by such Person with any such claimant, including the Borrower, then in
such event such Guarantor agrees that any such judgment, decree, order,
settlement, or compromise shall be binding upon such Guarantor, notwithstanding
any revocation hereof or the cancellation of any promissory note or other
instrument evidencing any of the Obligations, and such Guarantor shall be and
remain obligated
88
<PAGE> 94
to such Person hereunder for the amount so repaid or recovered to the same
extent as if such amount had never originally been received by such Person.
12. Remedies Cumulative. No delay by the Bank in the exercise of any
right or remedy shall operate as a waiver thereof, and no single or partial
exercise by the Bank of any right or remedy shall preclude other or further
exercise thereof or the exercise of any other right or remedy. No action by the
Bank permitted hereunder shall in any way impair or affect this Guaranty. For
the purpose of this Guaranty, the Obligations shall include, without
limitation, all Obligations of the Borrower to the Bank notwithstanding any
right or power of any third party, individually or in the name of the Borrower
or any other Person, to assert any claim or defense as to the invalidity or
unenforceability of any such Obligation, and no such claim or defense shall
impair or affect the obligations of any Guarantor hereunder.
13. Successors and Assigns. This Guaranty shall be binding upon the
Guarantor, its successors and assigns and inure to the benefit of the
successors and assigns of the Bank. Each Guarantor agrees that it shall not
assign its rights or obligations under this Guaranty without the consent of the
Bank, nor shall such Guarantor amend this Guaranty, without the consent of the
Bank.
14. Miscellaneous. This is a Guaranty of payment and not of
collection. In the event of a demand upon any Guarantor under this Guaranty,
such Guarantor shall be held and bound to the Bank directly as debtor in
respect of the payment of the amounts hereby guaranteed. All reasonable costs
and expenses, including attorneys' fees and expenses, incurred by the Bank in
obtaining performance of or collecting payments due under this Guaranty shall
be deemed part of the Obligations guaranteed hereby. Any notice or demand which
the Bank may wish to give shall be served upon the Guarantors in the fashion
prescribed for notices in Section 9.01 of the Credit Agreement in care of the
Borrower at the address for the Borrower set forth in or otherwise provided
pursuant to Section 9.01 of the Credit Agreement, and the notice so sent shall
be deemed to be served as set forth in Section 9.01 of the Credit Agreement.
The provisions of this Guaranty are for the benefit of the Bank and may not be
relied upon or enforced by any other Person without the express written consent
of the Bank.
15. Revolving Loans Benefit Guarantors. Each Guarantor expressly
represents and acknowledges that any financial accommodations by the Bank to
the Borrower, including without limitation the extension of the Revolving
Loans, are and will be of direct interest, benefit and advantage to such
Guarantor.
16. Solvency. Each Guarantor expressly represents and warrants that as
of the date hereof and after giving effect to the transactions contemplated by
the Loan Documents (including the Contribution Agreement) (i) the capital of
such Guarantor will not be unreasonably small to conduct its business; (ii)
such Guarantor will not have incurred debts, or have intended to incur debts,
beyond its ability to pay such debts as they mature; and (iii) the present fair
salable value of the assets of such Guarantor is greater than the amount that
will be required to pay its probable liabilities (including debts) as they
become absolute and matured. For purposes of this Paragraph 16, "debt" means
any liability on a claim, and "claim" means (a)
89
<PAGE> 95
the right to payment, whether or not such right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, undisputed,
legal, equitable, secured or unsecured, or (b) the right to an equitable remedy
for breach of performance if such breach gives rise to a right to payment,
whether or not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured, unmatured, undisputed secured or unsecured.
17. Visits and Inspections. Each Guarantor covenants and agrees that
so long as any amount is owing on account of Obligations or otherwise pursuant
to this Guaranty, such Guarantor shall permit representatives of the Bank to
visit and inspect properties of such Guarantor during normal business hours
after reasonable notice, inspect such Guarantor's books and records and discuss
with the principal officers of such Guarantor its businesses, assets,
liabilities, financial positions, results of operations and business prospects.
18. Governing Law. This Guaranty shall be construed in accordance with
and governed by the internal laws of the State of Georgia applicable to
contracts made and to be performed in the State of Georgia.
19. Jurisdiction and Venue. If any action or proceeding shall be
brought by the Bank in order to enforce any right or remedy under this
Guaranty, each Guarantor hereby consents to the jurisdiction of any state or
federal court of competent jurisdiction sitting within the area comprising the
Northern District of Georgia on the date of this Guaranty. Each Guarantor
hereby agrees that service of the summons and complaint and all other process
which may be served in any such suit, action or proceeding may be effected by
mailing or transmitting by telecopier a copy of such process to the offices of
the Borrower, as set forth in or otherwise provided pursuant to Section 9.01 of
the Credit Agreement, and that personal service of process shall not be
required. Nothing herein shall be construed to prohibit service of process by
any other method permitted by law, or the bringing of any suit, action or
proceeding in any other jurisdiction. Each Guarantor agrees that final judgment
in such suit, action or proceeding shall be conclusive and may be enforced in
any other jurisdiction by suit on the judgment or in any other manner provided
by applicable law.
20. Waiver of Jury Trial. Each Guarantor waives, to the fullest extent
permitted by law, any right to a trial by jury in any proceeding arising out of
this Guaranty.
21. Time of the Essence. Time is of the essence with regard to the
Guarantor's performance of its obligations hereunder.
22. Taxes. All payments required to be made by the Guarantors
hereunder shall be made without setoff or counterclaim and free and clear of
and without deduction or withholding for or on account of, any present or
future taxes, levies, imposts, duties or other charges of whatsoever nature
imposed by any government or any political or taxing authority as required
pursuant to Section 2.13(c) of the Credit Agreement.
23. Additional Guarantors; Release of Guarantors. Section 5.27 of the
Credit Agreement provides that Significant Subsidiaries must become Guarantors
by, among other things, executing and delivering to the Bank a counterpart of
this Guaranty. Any Subsidiary which
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<PAGE> 96
executes and delivers to the Bank a counterpart of this Guaranty shall be a
Guarantor for all purposes hereunder. In addition, in the event of a Top Level
Reorganization, the Parent must become a Guarantor (and IRT Partners L.P. shall
be released as a Guarantor and shall become the Borrower under the Credit
Agreement), in order to satisfy the Top Level Reorganization Conditions. Under
certain circumstances described in the last sentence of Section 5.05 of the
Credit Agreement, Guarantors may obtain from the Bank a written release from
this Guaranty pursuant to the provisions of such sentence, and upon obtaining
such written release, any such Subsidiary shall no longer be a Guarantor
hereunder. Each other Guarantor consents and agrees to any such release and
agrees that no such release shall affect its obligations hereunder.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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<PAGE> 97
IN WITNESS WHEREOF, the parties hereto have caused this Guaranty to be executed
by their duly authorized officers as of the date first above written.
IRT CAPITAL CORPORATION II (SEAL)
By:
--------------------------------------
Thomas H. McAuley
President
IRT PARTNERS L.P. (SEAL)
By: IRT Property Company, general
partner
By:
---------------------------------
James G. Levy
Senior Vice President
IRT MANAGEMENT COMPANY (SEAL)
By:
--------------------------------------
James G. Levy
Treasurer
IRT ALABAMA, INC. (SEAL)
By:
--------------------------------------
James G. Levy
Treasurer
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<PAGE> 98
EXHIBIT H
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (this "Agreement") is entered into as of
November 1, 1999 by and between IRT PROPERTY COMPANY, a Georgia corporation
(the "Principal", which term shall include IRT Partners L.P., after the Top
Level Reorganization), IRT Capital Corporation II, a Georgia corporation, IRT
PARTNERS L.P., a Georgia limited partnership, IRT MANAGEMENT COMPANY, a Georgia
corporation, and IRT ALABAMA, INC., an Alabama corporation (collectively, the
"Guarantors" and, together with any subsidiary of the Principal or the Parent
which becomes a Guarantor pursuant to the last paragraph hereof, Paragraph 23
of the Guaranty referred to below and Section 5.27 of the Credit Agreement
referred to below, and together with the Parent, from and after the Top Level
Reorganization pursuant to Section 5.28 of the Credit Agreement). The
Principal and each of the Guarantors are sometimes hereinafter referred to
individually as a "Contributing Party" and collectively as the "Contributing
Parties."
W I T N E S S E T H:
WHEREAS, pursuant to that certain Credit Agreement, dated as of even
date herewith, between the Principal and Wachovia Bank, N.A., as Bank (such
agreement, as the same may from time to time be amended, modified, restated or
extended, being hereinafter referred to as the "Credit Agreement"; capitalized
terms used herein shall have the meanings ascribed thereto in the Credit
Agreement), the Bank has agreed to extend financial accommodations to the
Principal;
WHEREAS, as a condition, among others, to the willingness of the Bank
to enter into the Credit Agreement, it has required that the Guarantors and
each Significant Subsidiary execute and deliver that certain Guaranty, dated as
of even date herewith (such agreement, as the same may from time to time be
amended, modified, restated or extended, being hereinafter referred to as the
"Guaranty"), pursuant to which, among other things, the Guarantors have jointly
and severally agreed to guarantee the "Guaranteed Obligations" (as defined in
the Guaranty); and
WHEREAS, each of the Guarantors will derive direct or indirect
economic benefit from the effectiveness and existence of the Credit Agreement;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, and to induce each Guarantor to enter into the Guaranty,
it is agreed as follows:
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<PAGE> 99
To the extent that any Guarantor shall, under the Guaranty, make a
payment (a "Guarantor Payment") of a portion of the Guaranteed Obligations,
then, without limiting its rights of subrogation against the Principal, such
Guarantor shall be entitled to contribution and indemnification from, and be
reimbursed by, each of the other Contributing Parties in an amount, for each
such Contributing Party, equal to a fraction of such Guarantor Payment, the
numerator of which fraction is such Contributing Party's Allocable Amount and
the denominator of which is the sum of the Allocable Amounts of all of the
Contributing Parties.
As of any date of determination, the "Allocable Amount" of each
Contributing Party shall be equal to the maximum amount of liability which
could be asserted against such Contributing Party hereunder with respect to the
applicable Guarantor Payment without (i) rendering such Contributing Party
"insolvent" within the meaning of Section 101(31) of the Federal Bankruptcy
Code (the "Bankruptcy Code") or Section 2 of either the Uniform Fraudulent
Transfer Act (the "UFTA") or the Uniform Fraudulent Conveyance Act (the
"UFCA"), (ii) leaving such Contributing Party with unreasonably small capital,
within the meaning of Section 548 of the Bankruptcy Code or Section 4 of the
UFTA or Section 5 of the UFCA, or (iii) leaving such Contributing Party unable
to pay its debts as they become due within the meaning of Section 548 of the
Bankruptcy Code or Section 4 of the UFTA or Section 6 of the UFCA.
This Agreement is intended only to define the relative rights of the
Contributing Parties, and nothing set forth in this Agreement is intended to or
shall impair the obligations of the Guarantors, jointly and severally, to pay
any amounts, as and when the same shall become due and payable in accordance
with the terms of the Guaranty.
The parties hereto acknowledge that the rights of contribution and
indemnification hereunder shall constitute assets in favor of each Guarantor to
which such contribution and indemnification is owing.
This Agreement shall become effective upon its execution by each of
the Contributing Parties and shall continue in full force and effect and may
not be terminated or otherwise revoked by any Contributing Party until all of
the Guaranteed Obligations shall have been indefeasibly paid in full (in lawful
money of the United States of America) and discharged and the Credit Agreement
and financing arrangements evidenced and governed by the Credit Agreement shall
have been terminated. Each Contributing Party agrees that if, notwithstanding
the foregoing, such Contributing Party shall have any right under applicable
law to terminate or revoke this Agreement, and such Contributing Party shall
attempt to exercise such right, then such termination or revocation shall not
be effective until a written notice of such revocation or termination,
specifically referring hereto and signed by such Contributing Party, is
actually received by each of the other Contributing Parties and by the Bank at
its notice address set forth in the Credit Agreement. Such notice shall not
affect the right or power of any Contributing Party to enforce rights arising
prior to receipt of such written notice by each of the other Contributing
Parties and the Bank. If the Bank grants additional loans to the Principal or
takes other action giving rise to additional Guaranteed Obligations after any
Contributing Party has exercised any right to terminate or revoke this
Agreement but before the Bank receives such written notice, the rights of each
other Contributing Party to contribution and indemnification
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<PAGE> 100
hereunder in connection with any Guarantor Payments made with respect to such
loans or Guaranteed Obligations shall be the same as if such termination or
revocation had not occurred.
Section 5.27 of the Credit Agreement provides that Significant
Subsidiaries must become Guarantors, and Subsidiaries which are not Significant
Subsidiaries may elect to become Guarantors, by, among other things, executing
and delivering to the Bank a counterpart of the Guaranty and of this
Contribution Agreement. Section 5.28 provides that, in the event of a Top Level
Reorganization, the Parent must become a Guarantor in order to satisfy the Top
Level Reorganization Conditions (and IRT Partners L.P. shall be released as a
Guarantor and shall become the Borrower under the Credit Agreement, but shall
remain a party hereto as the "Principal"). Any Subsidiary which executes and
delivers to the Bank a counterpart of the Guaranty and of this Contribution
Agreement shall be a Guarantor for all purposes hereunder. Under certain
circumstances described in the last sentence of Section 5.05 of the Credit
Agreement, Subsidiaries may obtain from the Bank a written release from the
Guaranty pursuant to the provisions of such sentence, and upon obtaining such
written release, any such Subsidiary shall no longer be a Guarantor or
Contributing Party hereunder, and such release shall automatically and without
further action constitute a release by each other Contributing Party of all
obligations of such Subsidiary hereunder. Each other Guarantor consents and
agrees to any such releases and agrees that no such release shall affect its
obligations hereunder, except as to the Subsidiary so released.
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<PAGE> 101
IN WITNESS WHEREOF, each Contributing Party has executed and delivered
this Agreement, under seal, as of the date first above written.
IRT PROPERTY COMPANY (SEAL)
By:
-----------------------------------------------
James G. Levy
Senior Vice President
IRT CAPITAL CORPORATION II (SEAL)
By:
-----------------------------------------------
Thomas H. McAuley
President
IRT PARTNERS L.P. (SEAL)
By: IRT Property Company, general partner
By:
------------------------------------------
James G. Levy
Senior Vice President
IRT MANAGEMENT COMPANY (SEAL)
By:
-----------------------------------------------
James G. Levy
Treasurer
IRT ALABAMA, INC. (SEAL)
By:
-----------------------------------------------
James G. Levy
Treasurer
96
<PAGE> 102
EXHIBIT I
FORM OF JOINDER AGREEMENT
[Date]
Wachovia Bank, N.A.
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attention: Cathy Casey
Telecopier number: 404-332-4066
Confirmation number: 404-332-5649
Re: Revolving Loan Credit Agreement dated as of
November 1, 1999 among IRT Property Company, as the Borrower, and
Wachovia Bank, N.A., as the Bank (as the same may be amended and
modified from time to time, the "Credit Agreement"). Terms defined in
the Credit Agreement are used herein with the same meanings.
Gentlemen:
IRT Partners L.P., (the "Replacement Borrower") is accomplishing the
Top Level Reorganization, as described in Section 5.28 of the Credit Agreement.
In order to satisfy the Top Level Reorganization Conditions, set forth therein,
the Replacement Borrower must become the Borrower and, among other things,
assume all of the obligations of the Borrower pursuant to the Credit Agreement,
the Revolving Loan Note, the FMA Agreement and the other Loan Documents (other
than the Guaranty) and execute a new Revolving Loan Note.
For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Replacement Borrower and the Bank (by
executing the acceptance at the end thereof) hereby, effective upon
consummation of the Top Level Reorganization and satisfaction of the Top Level
Reorganization Conditions, agree that (i) the Replacement Borrower shall have
all of the rights of the Borrower, and hereby assumes and agrees to discharge
all of the duties, obligations, and covenants (and from and after such time
makes the representations and warranties) of the Borrower, under the Credit
Agreement, the Revolving Loan Note, the FMA Agreement and the other Loan
Documents (other than the Guaranty), as fully as if it were the original
Borrower thereunder and (ii) shall be the Borrower for all purposes under the
Credit Agreement, the Revolving Loan Note, the FMA Agreement and the other Loan
Documents (other than the Guaranty). Contemporaneously herewith, the
Replacement Borrower is executing and delivering a new Revolving Loan Note, as
contemplated in Section 5.28 of the Credit Agreement.
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<PAGE> 103
IRT PARTNERS L.P. (SEAL)
By:
-----------------------------------------------
Title
ACCEPTED AND AGREED TO:
WACHOVIA BANK, N.A., as Bank
By:
----------------------------------
Title:
-----------------------------------------------
98
<PAGE> 104
EXHIBIT J
WACHOVIA
FINANCIAL MANAGEMENT ACCOUNT
STANDALONE COMMERCIAL LOAN ACCESS AGREEMENT
This Agreement is entered into by and between the undersigned IRT
Property Company ("Customer") and Wachovia Bank, N.A. ("Wachovia").
SECTION 1. DEFINITIONS.
(i) "Advance" means funds which are loaned to Customer by
Wachovia pursuant to the Commercial Loan established with Wachovia by
Customer.
(ii) "Business Day" means any Monday through Friday on which
Wachovia is open to the public for business, or on which Wachovia's
Federal Reserve Bank is operating.
(iii) "Checking Account" means the check account of Customer
specified below.
(iv) "Collected Balance" means, with respect to any Business
Day, the amount of collected funds that are on deposit in the Checking
Account as determined by Wachovia for that day.
(v) "Credit Limit" means the amount of credit available to
the customer under the Commercial Loan.
(vi) "Commercial Loan" is that credit facility described in
the Commercial Loan Agreement.
(vii) "Commercial Loan Agreement" is the Revolving Credit
Agreement specified below and any subsequent extensions or renewals.
(viii) "Governing Jurisdiction" means the State of Georgia.
(ix) "Loan Balance" means, on any date, the aggregate
outstanding principal amount of Advances.
(x) "Loan Increment" means $1,000 or such other amount as
may be established by Wachovia from time to time by written notice to
Customer.
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<PAGE> 105
(xi) "Target Balance" means $0 or such other amount as may
be agreed to in writing by Customer and Wachovia which is maintained
by Customer in the Checking Account.
SECTION 2. ADVANCES. Wachovia agrees to make Advances to Customer in
accordance with the terms and conditions of this Agreement and the Commercial
Loan Agreement (which may be requested by telephone, as provided in Section
2.01 of the Commercial Loan Agreement) up to a loan balance equal to the Credit
Limit for the Commercial Loan. If Wachovia determines that the Collected
Balance in Customer's Checking Account is less than the Target Balance,
Wachovia will make an Advance into the Checking Account in the minimum amount
(rounded upward to the nearest Loan Increment) sufficient to increase that
Business Day's Collected Balance to not less than the Target Balance. During
the time that this Agreement is in effect, Customer's only means of access to
the Commercial Loan will be the transfers and withdrawals authorized by this
Agreement.
SECTION 3. PAYMENTS OF PRINCIPAL AND INTEREST. The principal amount of
all Advances and all accrued interest thereon shall be due and payable in
accordance with the Commercial Loan Agreement. Without limitation of the
foregoing, Customer hereby authorizes and directs Wachovia to effect periodic
payments of principal and interest on Advances, without notice to Customer, as
follows:
(i) If on any Business Day on which an Advance is
outstanding Wachovia determines that the Collected Balance in
Customer's Checking Account is in excess of the Target Balance,
Wachovia will debit the Checking Account and reduce the Loan Balance
in an amount equal to the lesser of such excess (the "Excess Balance")
or the Loan Balance (such amount in either case to be rounded down to
the nearest Loan Increment, unless the Loan Balance is less than the
Loan Increment and equal to or less than the Excess Balance) as of the
time of Wachovia's balance determination; and
(ii) Unless otherwise agreed, on the tenth calendar day (or,
if not a Business Day, then on the next Business Day immediately
following such tenth calendar day) of each calendar month, Wachovia
will debit the Checking Account and pay interest on the Advances in an
amount equal to any and all interest on Advances that has accrued
through the last day of the previous calendar month but has not yet
paid. The Bank's practice is to send to the Borrower statements for
interest on the last Business Day of each calendar month.
On any Business Day on which payments of principal or
interest on Advances are to be made pursuant to this paragraph, such
payments will be debited from Customer's Checking Account prior to the
payment of any checks or other third party items drawn on or payable
from the Checking Account.
SECTION 4. MAINTENANCE OF CHECKING ACCOUNT. Customer hereby agrees to
establish, or agrees that it has already established, the Checking Account. The
Checking Account is a non-interest bearing account and is subject to the terms
of this Agreement
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<PAGE> 106
and (except to the extent modified by the express terms of this Agreement) to
the standard terms and conditions governing commercial checking accounts at
Wachovia, a copy of which has been provided to Customer. Customer authorizes
Wachovia to debit and credit the Checking Account from time to time in
accordance with the terms of this Agreement.
SECTION 5. FEES AND CHARGES; CERTAIN AGREEMENTS BY CUSTOMER.
(i) Customer agrees to pay to Wachovia such fees and
charges as are agreed upon from time to time between Wachovia and
Customer in connection with this Agreement and the Checking Account.
(ii) Customer hereby appoints Wachovia as its agent, with
full power of attorney, for the purpose of withdrawing or otherwise
transferring funds from the Checking Account pursuant to this
Agreement and for the purpose of performing any and all acts
reasonably necessary or incidental thereto. Wachovia will have no
duties or obligations as such agent other than as expressly set forth
in this Agreement, and Wachovia, will have no liability to Customer
for its acts or omissions as such agent other than for actual damages
resulting from its gross negligence or willful misconduct.
(iii) Customer agrees that it will provide to Wachovia any
information reasonably requested in connection with this Agreement
including, without limitation, any certification required by the
Internal Revenue Service.
SECTION 6. STATEMENTS. Wachovia will provide statements to Customer
not less frequently than monthly showing all advances and repayments of
Advances made hereunder on each day during the statement period. Except as set
forth in the preceding sentence, frequency and contents of such statements will
be determined by Wachovia in its sole discretion, and Customer hereby waives
its right to receive other or more frequent statements or notices.
SECTION 7. AMENDMENT; RIDERS; TERMINATION.
(i) This Agreement may be amended by mutual written
agreement. The terms and conditions contained in any rider to this
Agreement that has been signed by Customer and accepted by Wachovia
shall be incorporated by reference in this Agreement.
(ii) This Agreement may be terminated by either party upon
not less than 30 days' prior written notice to the other party.
Notwithstanding any such termination, Customer shall remain obligated
to repay the Advances and any interest accrued thereon in accordance
with the Commercial Loan Agreement. Upon termination of this
Agreement, Customer's access to the Commercial Loan will no longer be
available and the Commercial Loan Agreement shall terminate.
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<PAGE> 107
SECTION 8. MISCELLANEOUS.
(i) This Agreement shall be governed by the law of the
Governing Jurisdiction.
(ii) Unless otherwise specified in this Agreement or the
Commercial Loan Agreement, all notices and other communications given
hereunder to Wachovia or Customer. must be in writing and will be
effective when actually received. Notices to Wachovia may be sent to
Wachovia at the address set forth below or to such other address as
hereafter may be specified by Wachovia in a notice to Customer.
Notices to Customer may be sent to the address indicated below or at
the address of Customer last reflected in the records of Wachovia.
(iii) By signing below, Customer acknowledges having received
a completed copy of this Agreement.
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<PAGE> 108
EXHIBIT K
BORROWING BASE CERTIFICATE
Reference is made to the Revolving Loan Credit Agreement dated as of
November 1, 1999 (as modified and supplemented and in effect from time to time,
the "Credit Agreement") between IRT Property Company(1) and Wachovia Bank, N.A.,
as Bank. Capitalized terms used herein shall have the meanings ascribed thereto
in the Credit Agreement.
Pursuant to Section 5.01(k) of the Credit Agreement, ______________,
the duly authorized __________________ of the Borrower, hereby certifies to the
Bank that the calculation of the Borrowing Base contained in this Borrowing
Base Certificate is true, accurate and complete in all material respects as of
__________, ______ and that, as to the Non-Wholly Owned Eligible Property, the
Borrower and/or the Guarantors control the operation and management of, and
have the controlling interest in, such Property, which is [75%], as of the
dated hereof.
The calculation of the Borrowing Base is as follows:
<TABLE>
<S> <C> <C>
(a) Net Operating Income(2) for the 3 month period ending
on the last day of the Fiscal Quarter just ended prior
to the date of determination, from each Eligible
Unencumbered Stabilized Property(3) $
------------------
(b) (a) divided by 0.0975 $
------------------
(c) 4 times (b) $
------------------
(d) 0.60 times (c) $
------------------
(e) book value of Construction in Progress on all Eligible
Properties $
------------------
(f) 0.50 times (e) $
------------------
(g) lesser of (f) and $20,000,000 $
------------------
(h) acquisition cost of Eligible Unencumbered Stabilized
Property not owned for the entire 3 month period $
------------------
</TABLE>
- -----------------------------
(1) Change to IRT Partners L.P. after satisfaction of all Top Level
Reorganization Conditions
(2) For the Non-Wholly Owned Eligible Property, include only the Non-Wholly
Owned Eligible Property Percentage thereof
(3) Excluded percentage rents received during such 3-month period, but include
an amortized value for percentage rents received during the current Fiscal
Year.
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<PAGE> 109
<TABLE>
<S> <C> <C>
(i) 0.60 times (h) $
------------------
BORROWING BASE: sum of (d), plus (g), plus (i) $
------------------
</TABLE>
IRT PROPERTY COMPANY(1)
By:
--------------------------------------------
[CHAIRMAN] [VICE CHAIRMAN]
[PRESIDENT] [TREASURER]
- -----------------------------
(1) Change to IRT Partners L.P. after satisfaction of all Top Level
Reorganization Conditions
104
<PAGE> 110
Accepted and agreed as of ______________, ____.
IRT PROPERTY COMPANY (SEAL)
By:
----------------------------------------
James G. Levy
Senior Vice President
WACHOVIA BANK, N.A. (SEAL)
By:
----------------------------------------
Name:
Title:
LENDING OFFICE:
Wachovia Bank, N.A.
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
WACHOVIA CHECKING ACCOUNT NO.:
-------------------------------------------
REVOLVING CREDIT AGREEMENT: $5,000,000 Revolving Loan Credit Agreement
between Wachovia and Customer dated as of
November 1, 1999, as amended or supplemented
from time to time.
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<PAGE> 111
SCHEDULE 4.08
SUBSIDIARIES
<TABLE>
<CAPTION>
JURISDICTION OF OWNERSHIP
--------------- ---------
ARTICLE IX. NAME ORGANIZATION
------------
<S> <C> <C>
IRT Management Company Georgia IRT Property Company owns 100%
of the equity interests
IRT Alabama, Inc. Alabama IRT Property Company owns 100%
of the equity interests
IRT Partners L.P. Georgia IRT Property Company owns a 1%
general partnership interest
IRT Management Company owns a
92% limited partnership interest
Outside investors collectively own
a 7% limited partnership interest
VW Mall, Inc. Georgia IRT Property Company owns 100%
of the equity interests
IRT Capital Corporation II Georgia IRT Property Company owns 1% of
the voting common stock and 96%
of the non-voting common stock
Other investors own 99% of the
voting common stock and 4% of
the non-voting common stock
IRT Capital Corporation Georgia IRT Property Company owns 1% of the voting
common stock and 96% of the non-voting
common stock
Other investors own 99% of the
voting common stock and 4% of
the non-voting common stock
</TABLE>
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<PAGE> 112
Schedule 4.14
ENVIRONMENTAL MATTERS
The Borrower is disclosing the following for informational purposes
but does not believe any of the following could reasonably be expected to cause
a Material Adverse Effect:
1. Bay Pointe Cleaners
Bay Pointe Plaza - St. Petersburg, Florida
Per letter from the Florida Department of Environmental Protection
("FDEP"), this dry cleaning establishment is eligible, and has been
ranked, for state-funded remediation.
2. One Hour Martinizing
Bluebonnet Village - Baton Rouge, Louisiana
Louisiana Department of Environmental Quality ("LDEQ") is requiring
re-sampling of four (4) monitoring wells. Re-sampling scheduled for
10/01/99. The sampling conducted in 1995 showed that contamination
appeared to be isolated in the area directly behind the cleaners and
some remediation has been conducted.
3. Rub-A-Dub-Dub Dry Cleaners
Charlotte Square - Port Charlotte, Florida
Per letter dated 4/29/99 from the FDEP, a field investigation was
performed and the results showing contamination were forwarded to the
FDEP South District Hazardous Waste Program for review.
4. Mac's Dry Cleaners
Hoffner Plaza - Orlando, Florida
This former tenant was listed as being eligible for state-funded
cleanup per letter dated 6/16/97.
5. Kean's The Cleaners
Millervillage - Baton Rouge, Louisiana
This dry cleaner is listed as an RCRA small quantity hazardous waste
generator.
6. Gilbre Cleaners
Pinhook Plaza - Lafayette, Louisiana
This dry cleaner is listed as an RCRA small quantity hazardous waste
generator.
7. DryClean USA
Riverside Square - Coral Springs, Florida
FDEP given permission to enter the property to conduct soil and
groundwater sampling on 9/27/99.
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<PAGE> 113
8. Kean's The Cleaners
Sherwood South - Baton Rouge, Louisiana
This dry cleaner is listed as an RCRA small quantity hazardous waste
generator.
9. 4101 I-85 South Industrial Property
Charlotte, North Carolina
Remediation related to historical operations in progress under North
Carolina oversight. The remediation is currently expected to be
completed by year-end 1999.
10. Kash `N Karry
Venice Plaza - Venice, Florida
This tenant formerly operated UST's on the property and has undertaken
and is responsible for all related corrective action.
108
